EU countries want option to claw back coal plants’ revenues: Draft

BRUSSELS: Coal power plants could be subject to the European Union’s plan to cap energy producers’ revenues to raise cash to bring down soaring energy bills, a draft document seen by Reuters shows.

The European Commission last week proposed a package of emergency measures to curb energy prices, including windfall profit levies on energy firms for governments to recycle into cushioning businesses and citizens from sky-high energy bills this winter.

Diplomats from EU countries are negotiating the proposals and trying to find deals that all will be willing to approve at a Sep 30 meeting of EU energy ministers.

A draft of the countries’ latest negotiating document, seen by Reuters, would allow countries to subject coal plants to a planned EU cap on power generators’ revenues.

“Member States may allow the regulatory authority to maintain or set a specific cap on the market revenues obtained from the sale of electricity produced from hard coal,” said the draft, which could still change before the Sep 30 meeting.

The Commission had proposed a €180 (US$179.64) per megawatt hour cap on revenue earned by power generators with the cheapest running costs – including wind, solar and nuclear plants – since those plants can earn the largest profit margins from soaring power prices.

Coal plants were left out because the Commission said their running costs were above 180eur/MWh, so the revenue cap could make them uneconomical.

But EU countries plan to get around that by capping coal plants’ revenue at a higher level if their running costs are above 180eur/MWh, according to the document drafted by the Czech Republic, which holds the EU’s rotating presidency.

Countries could also impose a higher revenue cap on other plants with higher running costs, to ensure they can keep running and recover a “reasonable profit margin”, it said.

EU member states are also considering a proposed EU windfall profit levy on fossil fuel companies.

Countries like Italy that already have a windfall profit tax on energy firms should be able to keep their national measures instead of applying the EU one – so long as it generates proceeds at least equal to those expected from the EU scheme, the draft document said.