Brussels, Oct 1 (IANS): Energy Ministers of the European Union (EU) member states have reached a political agreement at their extraordinary Council meeting held here on a series of emergency measures to mitigate the current high prices of electricity.
"Member states will flatten the curve of electricity demand during peak hours, which will have a direct positive effect on prices," Xinhua news agency quoted the session's chair, the Czech Republic's Minister of Industry and Trade Jozef Sikela, as saying on Friday.
"Member states will redistribute surplus profits from the energy sector to those who are struggling to pay their bills."
These measures "will provide the member states a tool to shield consumers from high electricity prices", European Commissioner for Energy Kadri Simson commented.
The reduction of demand for electricity during the winter is the first of these emergency measures.
"The Council agreed to a voluntary overall reduction target of 10 per cent of gross electricity consumption and a mandatory reduction target of 5 per cent in peak hours," a statement from the Council of the EU said.
Revenues for so-called inframarginal producers will be capped at 180 euros ($176) per megawatt hour (MWh). Inframarginals are technologies used to produce electricity at low cost, such as renewables, nuclear and lignite.
These electricity producers are benefiting from the current high price of electricity. Their surplus profits will be redirected "towards supporting and protecting final electricity customers", said the EU Council statement.
The fossil fuel sector will also contribute to this financial relief with a solidarity levy taken from their taxable profit. This comes on top of already applicable taxes.
The solidarity levy will be applied to companies "active in the crude petroleum, natural gas, coal and refinery sectors", adds the statement.
The measures, which are temporary and extraordinary in nature, will apply from December 1, 2022, to December 31, 2023.
The energy consumption reduction targets will apply until March 31, 2023.
The mandatory cap on market revenues will apply until June 30, 2023.
The member states also introduced specific exemptions for Cyprus and Malta which should be adopted in early October.
The Energy Ministers also discussed other potential measures, and they expect the European Commission to present further proposals for next week's informal meeting of European leaders in Prague.