The government will be empowered to skim windfall profits from energy companies to subsidize household and business bills under plans agreed by EU ministers in Brussels yesterday.
Funding plans to help prevent power companies from going bankrupt were also approved in principle by EU energy ministers meeting in an emergency session yesterday.
But EU ministers could not agree on a Russian gas price cap – opting instead for a price cap on all gas imports, which many Brussels officials say is unworkable.
They also waived mandatory plans to conserve scarce gas and electricity. Environment Minister Eamon Ryan said conservation measures are likely to be voluntary and guided by price incentives.
The European Commission, which guides policy, has been tasked with drawing up detailed plans to skim excess profits and help fund electricity supply companies.
Those Commission plans could be ready by next Tuesday and energy ministers are likely to return to Brussels later this month to endorse these and other elements of a revised strategy.
Under the EU’s bargain plan, governments will be empowered to “skimme” excess revenue from wind, nuclear and coal-fired power stations that can currently sell their electricity at record prices determined by the cost of gas. This money would be used to reduce consumers’ energy bills.
Fossil energy companies should also pay a “solidarity contribution” – a summary of the meeting said.
Putin expected to divide us – he failed
“It makes sense to take some of that excess profit and recycle it back into households,” Ryan said.
He disputed some negative assessments of yesterday’s meeting, saying the measures agreed were helpful to Ireland’s number one priority to protect households and businesses from excessive gas and electricity bills.
“You can’t cushion the blow head-on. But these measures agreed by the EU, together with other measures to be taken by the Irish government, will help,” Mr Ryan said.
The environment minister said the final details of the energy saving plans would be presented by the Commission. “I don’t believe it will be done on a mandatory basis. I think what will be used is what our own regulator has suggested – you put ‘market signals’ in to help make that happen,” Ryan said.
The Green Party leader added that the ‘market signals’ were cheaper prices at off-peak hours and higher tariffs at peak times when the most expensive and/dirtiest energy sources were used to meet demand. demand peaks.
EU ministers also backed the Commission’s proposal to offer emergency funds to electricity companies facing increasing requirements for guarantees, and tasked the Commission with designing such measures. “Everyone is in a hurry to find a solution,” Swedish Energy Minister Khashayar Farmanbar said.
Czech Industry Minister Jozef Sikela, who chaired the meeting, said unity had been maintained. “Putin expected to divide us – he failed,” Mr Sikela said.
Vladimir Putin had warned that Moscow would cut off all supplies to Europe if a price cap was applied to Russian gas. Some countries that still receive Russian gas have said they are unwilling to risk losing that supply.
“If price restrictions were to be imposed exclusively on Russian gas, this would obviously lead to an immediate cut off of Russian gas supply,” Hungarian Foreign Minister Peter Szijjarto said.
Others worry that a general cap on gas prices in the EU would mean supplies going elsewhere.