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EU targets 5% peak electricity demand cut to tackle soaring prices and energy crisis

Under proposals to prevent a winter energy crisis, the European Union will have to reduce electricity usage by 5% during peak hours.

Politico and Reuters have seen the draft EU plan. It includes windfall taxes for energy companies and is intended to reduce soaring energy prices that can also fuel inflation.

According to the 27-nation group, Moscow was accused of weaponizing gas by cutting supplies as a response to the sanctions imposed by the bloc and its allies at the start of the war in Ukraine.

Ursula von der Leyen, president of the European Commission, stated Wednesday that “never before has this parliament debated the State of our Union while war raging in Europe.”


EU countries have already committed to reducing gas consumption by 15%. Gas storage is currently 84% full, which exceeds the EU’s prewinter filling goal.

Analysts warn that Europe will need to reduce its gas consumption over winter in order to prevent storage facilities from running dry.

A windfall levy is one of the measures that will help to reduce the inflationary impact. It is designed to recover what the European Commission called “unexpected profits” from Europe’s non-gas-fueled power plants. This was linked to the soaring oil prices and Russian supply cuts.

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Ms von der Leyen stated that these companies are making revenue they had never imagined.

She added that it is wrong to get extraordinary revenues and profits from war, and on the backs of our consumers.

“Profits should be shared and channelled to the most in need.”

Continue reading: Russia abandons plans to reopen major pipeline

Drought has’severe consequences’ on EU energy production

Antony Froggatt, Chatham House’s deputy director for environment, said that the UK’s targets and taxes were “significant departures”.

He stated that there was “little mention” of the importance demand side measures in Prime Minister Liz Truss’s speech last week. She promised PS100bn plus emergency bailout to households to help them with their energy bills. Ms. Truss is against a new windfall tax on energy producers.

Brussels claimed that its windfall tax plans would increase EUR140bn in profits from energy companies to offset the impact of record-breaking energy prices this winter. Sky News’ Mr Froggatt said that the cash will likely attract “significant support” from member states for the policy.

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Russia shuts gas pipeline to Europe

According to Reuters, oil, gas, coal, and refining companies would have to contribute a solidarity contribution of 33% to their taxable surplus profits starting in fiscal year 2022.

The cap on wind and solar farms and nuclear power plants’ revenue for producing electricity would be 180 euros (PS156). Governments would then recoup any cash they don’t need and recycle it to support their customers.

As governments work out the details, they could change the draft before it is published.

Ms von der Leyen spoke at the end the continent’s hottest ever summer, emphasizing how “the climate crisis heavily weighing on our bill,” with heatwaves increasing electricity demand and closing down hydropower and nuclear plants.

Although she didn’t make any major announcements on climate policy, the EC president pledged EUR3 billion (PS2.6 bnn) to establish a European Hydrogen Bank that would help “[build] a future market for hydrogen”.

She called for greater adaptation to the increasing droughts and fires and promised to double the firefighting capacity in the next year.


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