EU proposes emergency electricity measures to curb soaring energy bills

Measure in Brief

The Commission proposes an emergency intervention in the electricity market as a Council Regulation based on Article 122, including an obligation for Member States to cut electricity consumption by at least 5% during selected peak price hours and to aim for an overall 10% demand reduction until 31 March 2023. It also proposes a temporary inframarginal revenue cap set at €180/MWh with revenues above the cap collected by Member States for consumers, a temporary solidarity contribution on excess profits in oil, gas, coal and refinery sectors above a 20% profit increase, and expanded possibilities for regulated below-cost prices covering households and small and medium-sized enterprises.

Who Is Affected

The measures target Member States, electricity consumers and market operators, lower-cost electricity producers such as renewables, nuclear and lignite, and companies in oil, gas, coal and refinery sectors, with revenues redirected to vulnerable households, hard-hit firms and energy-intensive industries. Member States that trade electricity are encouraged to agree bilateral revenue-sharing arrangements where net imports reach at least 100%.

What Comes Next

The proposals are tabled for adoption as an emergency Council Regulation, Member States are asked to implement demand reductions and may conclude bilateral sharing agreements by 1 December 2022, and the demand reduction aim runs until 31 March 2023.