France, Greece propose energy measures

Belgium, (Brussels Morning Newspaper) France and Greece have proposed measures aimed at reining in rising energy prices.

France wants to introduce a bloc-wide price cap on natural gas used in power plants to curb rising cost of energy, according to Reuters reporting on Tuesday.

Greece proposed the founding of an EU fund to help companies and households deal with rising energy prices, noting that the fund would be partly financed by levies on power producers.

Kostas Skrekas, Greek Minister of the Environment and Energy, proposed to the EC a levy of 10 euro per MWh on natural gas used in power plants.

He noted that annual revenue will stand at roughly 9 billion euro, which the EU can use to get a loan of approximately 80 billion from the European Investment Bank (EIB) to launch the fund.

Skrekas pointed out that the fund would help companies find alternative supplies as well as support small and medium-sized enterprises (SMEs) and households.

He added that the fund could also back investments in green fuels, energy efficiency and natural gas infrastructure.

France’s proposal

France noted in a paper shared among its EU counterparts that Portugal and Spain already implemented the proposed price cap in June.

It pointed out that price of electricity in the EU is set by power plants that fill the demand curve, largely gas-fired plants, and stressed that bringing down their costs could rein in rising prices.

The paper notes that EU member states would have to compensate such power plants for gaps between the price cap and their running costs.

“A price cap mechanism for gas used to produce electricity is currently the most effective and the least expensive measure to reduce electricity prices in Europe,” the paper says and calls on the European Commission to propose it later this week.

The EC is to propose a plan later today and set out options for the bloc to rein in soaring prices. EU officials noted that the Commission will analyse the paper.France added that a price cap on wholesale markets, rather than just for power plants, is also an option, as is a price cap on Russian gas imported via pipelines.