The European Commission proposes to limit the profits of renewable energy and nuclear power generation enterprises and impose a tax on the “windfall income” of oil and gas companies. The EU hopes to collect 140 billion euros (140 billion US dollars) by using the “unexpected profits” of some energy enterprises to help households and enterprises pay “dazzling” gas and electricity bills.

Recently, the profits of power producers using wind, solar and nuclear energy have surged, because their electricity prices are linked to the wholesale prices of natural gas. After the conflict between Russia and Ukraine broke out, the wholesale price of natural gas soared to a record high in March. At present, this price is 550% higher than the same period last year. After the outbreak of the Russian Ukrainian conflict, Europe imposed sanctions on Russia’s oil and coal exports, leading Moscow to reduce the supply of natural gas in response to the sanctions.

As countries reopened from the epidemic blockade, the prices of natural gas and oil began to rise last year due to the surge in global energy demand. Especially in late February this year, the conflict between Russia and Ukraine broke out, which led to an “energy impasse” between Europe and Russia, leading to soaring energy prices.

The European Commission said in a statement that the EU could impose a ceiling of 180 euros (US $180) per megawatt hour (MWh) on electricity generated by enterprises using renewable energy. At present, the benchmark wholesale natural gas price in Europe is 212 euros (US $212) per MWh. It is understood that the EU’s proposal is part of a “package of measures” to help the region survive this winter’s energy crisis. At that time, energy demand will usually surge due to the temperature drop. The “package plan” includes the “crisis contribution” of oil, gas and coal producers (these producers have also made huge profits recently), as well as the “mandatory target” of countries to reduce power consumption during peak hours.

The statement of the European Commission pointed out that EU member states should levy additional taxes on any profits exceeding 20% of the average income in the past three years, but the statement did not specify the tax rate. “They must pay a fair share,” said Von Delain. It is “not enough” to rely on the billions of dollars that governments have promised to support consumers.

Source: Energy development