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EU countries mull emergency solution to soaring energy bills

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EU countries mull emergency solution to soaring energy bills

Points of discussion include a price cap on Russian gas, a windfall levy on non-gas power plants, and a bloc-wide cut in electricity demand.

Last month, rocketing European gas prices hit 12 times their level at the beginning of 2021.
Last month, rocketing European gas prices hit 12 times their level at the beginning of 2021.
(Reuters)

European Union countries’
energy ministers have meet to search for solutions from a
long list of possible measures to shield citizens from sky-high
energy prices as winter approaches.

The basis for the talks on Friday is a set of proposals made by
European Commission President Ursula von der Leyen.

Among the proposals are
a price cap on Russian gas, a windfall levy on non-gas power
plants, a bloc-wide cut in electricity demand, and emergency
credit lines for power firms facing soaring collateral
requirements.

EU diplomats said countries appeared broadly supportive of
measures to provide liquidity for companies, and some had also
backed curbing power demand.

Other proposals were more divisive. The price cap on Russian
gas has so far failed to win support among a majority of
countries, with some questioning how it would help curb prices
given the low gas volumes Moscow is now sending to Europe.

READ MORE: Energy price hikes could ignite ‘civil unrest’ across Europe this winter


Supply cuts from Moscow

“Our intention first and foremost is to bring prices down.
A cap on only Russian gas won’t bring prices down,” Belgium’s
Energy Minister Tinne Van der Straeten said.

The Baltic states are among those backing the idea, arguing
that a price cap would still deprive Moscow of revenue to fund
military activities in Ukraine.

President Vladimir Putin said on Wednesday that Russia will
stop supplying gas to Europe if it imposes a price cap. Support
for the policy is scarce among central and eastern European
states unwilling to lose the dwindling supplies they still
receive.

Russian gas pipeline deliveries via the three main routes to
Europe have fallen by almost 90 percent in the last 12 months,
Refinitiv data show. Moscow has blamed supply cuts on technical
issues caused by Western sanctions over its offensive in Ukraine.

EU countries are not expected to approve any policies on
Friday, but rather give a signal to Brussels about which options
have enough support to be turned into final proposals.

Emergency
EU laws are usually passed by a majority of countries, although
some may require unanimous approval.

An idea to claw back revenues from non-gas power generators
and spend the cash on cutting consumer bills has also stirred
resistance in some capitals.

The EU proposal would cap at $199.86 (200 euros) per megawatt hour the price non-gas generators are paid for their power, and apply to wind, nuclear and coal generators, according to a draft.

European power prices are typically set by gas plants,
and the cap would aim to reduce the cost of electricity produced
by plants that are not exposed to rocketing European gas prices
– which last month hit 12 times their level at the beginning of
2021.

READ MORE: Russia made $158B in energy exports since Ukraine conflict


Source: Reuters


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