EU imports gas from Norway, measures prepared regarding energy price hikes

(Patria) - European Commission President Ursula von der Leyen today announced measures aimed at mitigating the consequences of rising energy prices.

She presented the Union's plan for reducing electricity consumption, capping the price of electricity produced from renewable energy sources, a solidarity mechanism to be financed by the high profits of fossil fuel companies, and a support program for public enterprises.

Von der Leyen noted that electricity prices are, as she stated, astronomically high and that the market is significantly unstable. She pointed out the possibility of setting a final price for Russian gas imports, which could lead Russia to halt supplies of this energy source.

"We must lower the revenues with which Russian President Vladimir Putin finances the terrible war against Ukraine," she stated.

According to her, nine percent of gas is now imported from Russia to the EU, while before the war, 40 percent of the total imported gas volume was imported. She indicated that Norway has now become the main exporter of this energy source to the Union.

She emphasized that the possibility of capping prices for all imported gas is being considered, except for liquefied natural gas (LNG), which is considered a key alternative to Russian gas. However, it is unlikely that this measure will be used in the foreseeable future.

"LNG is scarce and can be redirected to different regions. We want to remain competitive for LNG suppliers, but also to ensure that prices are not high, but decent," stated von der Leyen.

As reported by Euronews, the mentioned measures reflect an effort to balance market intervention with ensuring secure energy supplies.

The proposal for electricity savings is to limit its use during times when gas is most significant for its production and consumption prices are higher. As the President of the European Commission stated, this requires a smart reduction in electricity demand. The EU previously established a plan to reduce gas consumption by 15 percent by next spring.

Another proposal is to cap the excess revenues of those who produce electricity from renewable energy sources, nuclear energy, and coal, and have lower production costs. Von der Leyen cited as the reason for this that inframarginal generators, as these electricity producers are also called, "never dreamed of such revenues, which they cannot reinvest so quickly."

She stated that it is time for citizens and consumers to also benefit from the low costs of electricity produced from low-carbon energy sources. This measure could also apply to fossil fuel companies.

EU ministers will discuss measures to mitigate the consequences of rising energy prices on September 9. It is expected that the most significant disagreement will be over whether to cap the price of Russian gas imports. Hungary announced last week that it will sign an agreement with the Russian energy company Gazprom for the supply of an additional 5.8 million cubic meters of gas per day.

However, if consensus is reached, the measures could be applied under emergency procedures. Among the previously rejected proposals is subsidizing the price of gas, as it was considered that this would encourage the consumption of this energy source and further increase energy dependence on Russia, Euronews reports.