Brussels is working on price cap electricity generated by non-gas power producers as part of efforts to quell the EU’s energy crisis.
In a draft of proposals seen by the Financial Times, a limit of €200MWh was mooted according to the newspaper.
The current spot price for electricity in Germany, the regional benchmark, is above €450 a MWh, it said.
The European Commission is to propose that member states cap the price of electricity from producers such as wind farms, nuclear and coal plants, all of which are set by the high price of gas, according to the newspaper.
Its president Ursula von der Leyen said in a statement that low carbon energy sources are making unexpected revenues, which do not reflect their production costs.
She added that it was now time for consumers to benefit from the low costs of low carbon energy sources, like renewables by re-channelling these unexpected profits to support vulnerable people and companies to adapt.
The Financial Times reported that the commission said the cap would mimic “the market outcomes that could be expected were global supply chains functioning normally and not subject to the weaponisation of energy through gas supply disruptions”.
The commission document also said the cap should be high enough so as not to discourage future investment in non-gas producing technologies, according to the article.
The document also suggests a mandatory target of reducing electricity consumption by 5% during peak pricing hours – something that commission president Ursula von der Leyen put forward in prepared remarks seen by the FT on Tuesday.
The newspaper said the commission’s paper warned that the incentives used must be “cost-effective”.
The proposals are to be discussed by diplomats from the EU’s 27 member states on Wednesday ahead of an emergency meeting of energy ministers on Friday, according to the report.
Second, we will propose a cap on revenues of companies producing electricity with low costs.