Slovakia wants excess profits of electricity producers redistributed

Electricity producers’ profits should be redistributed among consumers, while investments in low-carbon technologies need to be increased, the new Economy Minister Denisa Saková said in a joint statement on EU electricity market reform with French Energy Transition Minister Agnès Pannier-Runacher.

With the joint statement, France and Slovakia aim to ensure EU electricity reform is adopted “in the coming weeks”.

“Thanks to the reform we want to implement, each state will be able to redistribute the income of a part of electricity producers among consumers in case of high prices, thus avoiding situations of ‘excessive profits’ of producers,” Saková said.

Under the EU reform as it currently stands, the aim is to adapt the increasing share of renewables-based electricity, encourage investment in green sources and protect consumers from price spikes like those that followed Russia’s invasion of Ukraine.

While electricity prices for consumers recently soared, resulting in huge profit margins for companies – partly because of the way the EU’s electricity market is currently set up – the European Parliament’s energy committee (ITRE) agreed in July to scrap a proposal that would have taxed windfall profits in the event of a future energy price crisis in the EU bloc.

The chief negotiator for the EU legislation, MEP Nicolas Gonzalez Casares, initially proposed a pre-planned price cap that would have had electricity pay up if electricity prices exceeded a certain threshold – money countries could then spend to alleviate high energy bills.

“I think it’s more predictable, and it would give more stability to the market. But not all political groups saw it the same way,” Casares said after the negotiations.

Energy producers have strongly opposed the different EU-level proposals for reform, arguing that such measures would scare off investors when huge investment is needed in low-carbon power generation.

(Barbara Zmušková, Irena Jenčová | Euractiv.sk)