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EU lawmakers drop call for cap on power plants' windfall revenues

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece here in Reuters or enjoy below

🗞️ Driving the news: The European Parliament's energy committee has decided to abandon a proposal to cap power plants' windfall revenues if another energy price crisis arises, a move that the energy industry vehemently opposed
• The aim is to expand renewable energy and safeguard consumers from price spikes like those seen after Russia's invasion of Ukraine last year

🔭 The context: the European Parliament's lead negotiator, previously proposed the cap to raise funds that countries could use to shield their citizens from high bills during price spikes
• However, industry groups were against the cap, arguing it would deter investors when actually significant investments are needed in low-carbon energy generation

🌎 Why does it matter for the planet: The decision made will have far-reaching implications for the renewable energy sector, consumer protection, and the broader strategy of the EU's energy transition

⏭️ What's next: EU lawmakers and nations are negotiating electricity market reforms, aiming to finalize before next year's Parliament elections
Key disputes, including whether countries can subsidize current power plants and use the revenue for domestic industries, have impeded consensus on negotiation positions

💬 One quote: "I think that's more predictable and it would give more stability to the market. But not all political groups saw it the same way." (Nicolas Gonzalez Casares, European Parliament's lead negotiator)

📈 One stat: Despite significant falls from record highs of above 700 euros/MWh last August, average prices are still more than double their 2019 levels, according to the International Energy Agency

Click for more news covering the latest on energy transition

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