Wholesale gas prices jump 12% even as EU unveils 'extraordinary' plan to cut electricity consumption

Irish business experts welcomed the Commission's proposal plan to raise €142bn for member states to help fund subsidies. 

The price of wholesale gas jumped even as the European Commission unveiled what it said were "extraordinary" proposals to cut electricity consumption by 10% this winter and to raise €142bn by imposing a cap on revenues on energy producers.   

The price of European gas for delivery over the winter months climbed 12% this afternoon, suggesting that further significant price pressures were building for households and businesses in the coming months, Irish experts said.  

The commission proposes member states cut electricity consumption by 10% through next March, with a focus on curtailing demand during peak hours when demand for gas is at its highest level to generate electricity.  

Irish business experts welcomed the Commission's proposal plan to raise €142bn for member states to help fund subsidies. 

The commission estimated it could raise €117bn from power producers, such as windfarms and nuclear generators, which have tapped exceptional levels of revenues during the crisis, and a further €25bn from oil, gas, and coal companies, it said.   

Duncan Graham, managing director of Retail Excellence which represents 2,000 retail businesses, said it needs some sort of guarantee in the budget for energy bills. Curtailing opening hours during Christmas would be difficult, he said.                

John Whelan, a business consultant, said the proposal to raise €142bn from generators and utilities, if approved, would be "a significant and useful policy change". 

However, measures to reduce consumption will need to be implemented on a country-by-country basis and could entail controls on big users of gas, Mr Whelan said. Such controls "will be more problematic", he said.                

The EU Commission said its proposals didn't preclude member states from taking further measures. 

France which has so far led the way in Europe in subsiding households and businesses from the huge increases in their energy bills, said on Wednesday it would extend a cap on energy prices.           

The cost of gas for delivery in December climbed almost 12% to €232 per megawatt hour. The price was only slightly lower for March.

"Energy prices are expected to remain high due to uncertainty in the market spurred by the risk of further disruptions of Russian gas supplies to the EU," the Commission said.