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The European Commission is looking into options to cap energy prices and cut electricity demand as part of its upcoming proposals to tackle soaring energy costs, a senior European Commission official said on Thursday. Russia has slashed gas deliveries to Europe since Moscow invaded Ukraine, which has sent gas prices rocketing to record-high levels and left countries scrambling to buy non-Russian gas volumes and shield consumers from soaring bills.
“There is work on emergency measures on electricity prices. There might be also something on demand reduction for electricity,” Mechthild Woersdoerfer, Deputy Director General of the Commission’s energy department, told a meeting of European Parliament’s energy committee.
European Commission chief Ursula von der Leyen will outline the Commission’s ideas on capping energy prices in a speech on September 14, Woersdoerfer said.
That will come a few days after European Union countries’ energy ministers hold an emergency meeting on September 9 to discuss their response to a surge in energy prices that is hammering Europe’s industry and hiking household bills for the coming winter.
Brussels is also looking into taxing windfall profits companies make from soaring energy prices, Woersdoerfer said.
EU countries are responsible for their national taxes, and the Commission said in May that governments can tax companies’ profits from high gas prices and use the proceeds to offset higher electricity bills.
Italy has already introduced an energy windfall levy.
Any EU-wide tax would need approval from all 27 member countries, a high bar for approval.
Some country leaders are demanding more EU action to rein in costs. Italy, Belgium and the Czech Republic are among those seeking a bloc-wide gas price cap, while France and Greece want Europe to decouple the price of electricity from the surging price of gas.
The Commission is also looking into an overhaul of the EU electricity market design.
Woersdoerfer said those reforms would be a longer-term measure, and Brussels would come up with “concrete options” for the changes after Ms von der Leyen’s speech.
In Strasbourg, the European Parliament was forced to scrap construction and renovation plans worth more than €6.7million (£5.8million) to pay for energy bills.
With the purchase of gas rising by 500 percent and the price of electricity rising exponentially, the Eurometropolis of Strasbourg has no choice but to accelerate its policy of energy sobriety and the development of renewable energy. And this, all the more so as these budgetary increases will have to be revised upwards this winter, warned the president of the eurometropolis, Pia Imbs, this Wednesday during a press conference on the energy emergency.
In concrete terms, the energy bill for the 2022 plan, which was already €3.2million (£2.7million), has just risen to €17.4million (£15million).
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Even though “this had been anticipated in July,” said Strasbourg mayor Jeanne Barseghian, “we had counted on the doubling of the price of gas. But, after a few weeks, these forecasts were already obsolete because we are now at six times more. We have to keep updating our scenarios.”
“Between absorbing the energy crisis, the increase in the index point and inflation, it is a significant drop in the resources of the community,” worries the elected representative Syamak Agha Babaei, in charge of the budget and finances of the city and the Eurometropolis. “If we were to continue to operate as we do today, if habits were not to change, hypothetically, we would have to find 240 million euros in the next four years for the city of Strasbourg.”
The two local authorities, which have placed the climate emergency at the forefront of their work since the first day of their mandate, intend to move up a gear. “The course we set for ourselves is the right one, like a sportsman preparing for the race,” said Strasbourg mayor Jeanne Barseghian. “We were already committed. Now we’ll have to sprint.”
Several levers are possible and will be put in place this autumn, even if they still need to be discussed in detail. The main area of consideration is sobriety in energy consumption: starting up the heating as late as possible in the season, limiting the average temperature in administrative buildings to 19°C, and even 15°C in workshops. Schools, except for nurseries, will also have to be limited to 19°C.
Other measures include the partial or even complete closure of certain energy-consuming buildings, depending on the number of visitors or the use made of them: starting with the town hall offices at Place Broglie, but also, and this has yet to be specified, the swimming pools, skating rinks, media libraries, etc.
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It has also been confirmed that the city’s museums will be closed two days a week.
The use of teleworking, the reduction of public lighting, the possible banning of illuminated signs. All public policies are being analysed and all options are on the table, says the executive. However, according to Syamak Agha Babaei, the wage bill will not be touched to make savings, just like social measures, the social shield for families. The elected representative prefers to speak of an adaptation of the local public service. It is in this sense that Jeanne Barseghian also announced that there will be, for example, no increase in the price of school canteens in 2022 and that the additional cost, of several hundred thousand euros, will be covered by the city.
Finally, the events policy will be impacted in order to limit expenses and visibility. Thus, it has been announced that the car-free day, entitled Rues Libérées, will be cancelled this year. But don’t panic: “We won’t touch the Christmas market, it will still take place! Even if we will work on its energy sobriety, its eco-responsibility, notably on the question of illuminations. There is room for manoeuvre there.”
Additional reporting by Maria Ortega
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