According to the International Energy Agency, current market conditions could lead to excessive profits of up to 200 billion euros per EU from electricity generation using natural gas, coal, nuclear power, hydroelectric power and other renewable sources in 2022.
EU leaders are expected to give member states the green light to temporarily tax some energy companies’ extraordinary profits from rising gas and electricity prices, according to a draft decision cited by Bloomberg.
In addition, it is assumed that agreements will be reached on joint supplies of natural gas, liquefied fraction (Υγραέριο LPG-Φυσικό αέριο CNG-LNG) and hydrogen in anticipation of next winter. The decisions of the summit will take into account the proposal of the EU, which presents solutions to the problems that Europe must face (due to high gas and electricity prices), as well as gas shortages ahead of the next winter season.
According to cathimerini.gr, the commission provides member states with a tool to temporarily tax the so-called “soaring profits” in the wholesale market to support households and businesses in large volumes. The Commission’s proposal allows Member States to set ceiling and retail prices, and provides for compensation to suppliers.
The commission’s plan was unveiled ahead of a two-day summit that began today, Thursday, at which a proposal to temporarily tax “soaring profits” is expected to be adopted. According to the International Energy Agency, current market conditions could lead to an excessive profit of up to 200 billion euros in the EU from electricity generation using natural gas, coal, nuclear power, hydroelectricity and other renewable sources in 2022.
For Greece, this decision paves the way for emergency tax for electricity generated by hydroelectric power plants and lignite plants, the operating costs of which are much lower than the price formed on the wholesale market by expensive production of natural gas (in certain periods, the variable cost of the relevant units deviates significantly from the wholesale price of electricity).
Super profits from RES (renewable energy sources) create a surplus of ELAPE, which is already being used to finance subsidies. Quantitative data on the profitability of each production unit per hour and per day RAE sends daily to the Ministry of the Environment and Energy and in Megaro Maximu from March 1st.
The summit’s draft decision provides that the “task group” will take up negotiations on gas supplies for all states as a whole, and not for each EU country separately.
Joint gas supply
Regarding the uninterrupted supply of the European market with natural gas, in view of the intention to stop the use of Russian gas and oil, the commission proposes joint supplies of natural gas, liquefied CNG-LNG and hydrogen. The European Union becomes stronger when countries act together, summit leaders say.
“We will have to work together to use our bargaining power and bargain with suppliers,” the statement said. It is proposed to create a “task force” to negotiate centralized gas supplies for all Member States, as well as to coordinate the effective use of the European gas infrastructure, in particular CNG-LNG terminals and storage facilities.
The storage, according to the commission, supplies 25%-30% of the gas consumed in the winter and provides a reserve in case of supply disruptions. Now they intend to fill up to 80%.
In addition, the EU proposes to establish a certification system for operators of gas storage systems that excludes any individual or legal entity that could jeopardize the energy security of the EU. The proposal involves Gazprom, which operates storage facilities in Germany and other EU countries.
The Commission also offers government assistance to companies hit by sanctions against Russia and to companies hit by high gas and electricity prices.