BRUSSELS, (Reuters) – The European Union’s executive plans to raise more than 140 billion euros ($140 billion) to soften the blow to consumers from soaring energy prices by skimming off revenues from low-cost electricity generators and making fossil fuel firms share windfall profits.
The European Commission published the proposals on Wednesday as the 27-member European Union grapples with an energy crisis fuelled by Russia’s invasion of Ukraine.
Governments across Europe have already ploughed hundreds of billions of euros into tax cuts, handouts and subsidies to tackle a crisis that is driving up inflation, forcing industries to shut production and hiking bills ahead of winter.
“In these times, profits must be shared and channelled to those who need it most,” European Commission President Ursula von der Leyen told the EU Parliament in Strasbourg, adding that the plans should raise more than 140 billion euros for member states to rechannel into helping businesses and retail consumers.
EU countries will have to negotiate the Commission’s proposals and agree on final laws.
The plan did not include an earlier idea to cap Russian gas prices. EU countries are divided over whether broader gas price caps would help or harm efforts to secure winter supplies.
With gas price caps off the table, at least for now, some diplomats were optimistic that deals could be struck at a meeting of EU energy ministers on Sept. 30.
Von der Leyen said the Commis-sion was “discussing” price caps and had launched talks with Norway on lowering gas prices.
The Commission proposals would skim off excess revenues from wind and solar farms and nuclear plants, by imposing a cap of 180 euros ($180) per megawatt hour (MWh) on the revenue they receive for generating electricity.
That would cap generators’ revenues at less than half of current market prices. Germany’s front-year electricity price was trading at just below 500 euros/MWh on Wednesday.