EU plans revenue clawback from non-gas power plants, document shows

BRUSSELS, Sept 7 (Reuters) - The European Commission wants to claw back revenue from electricity generators that do not run on gas, aiming to use the cash to cushion consumers from soaring bills as they head into winter, a draft document seen by Reuters said.

The plan is part of emergency measures being drafted by Brussels to reduce gas and electricity costs that have surged as a result of Russia cutting gas flows to Europe since the invasion of Ukraine. read more

A draft of the Commission proposals seen by Reuters also outlined a target for countries to cut electricity use by 10%.

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The document, which could change before it is formally proposed, said the EU would apply a revenue cap of 200 euros per megawatt hour on producers whose power generation is not gas-fuelled.

European utilities stocks rallied on the news, with analysts viewing a 200 euro cap as a better than expected outcome for an industry that could provide relief to customers without discouraging investment.

Shares in Verbund (VERB.VI), RWE (RWEG.DE), Engie (ENGIE.PA) and EDP Renovaveis (EDPR.LS) rose by between 4% and 13%, the strongest day for the sector index (.SX6P) since early July.

Wind and solar farms, biomass plants, nuclear power plants and coal generators would be among those affected.

The price cap would be applied and the excess revenues recovered after power transactions are settled, so the measure would not directly affect prices in Europe's exchange-traded electricity market, the document said.

The proposed cap would be far below the current power price in wholesale markets.

German Thursday (day-ahead) delivery baseload power was down 8.2% at 435 euros per megawatt hour (MWh) at 1230 GMT on Wednesday.

European power prices are typically set by gas plants, but the cap would aim to reduce the cost of electricity produced by non-gas plants that have lower running costs because they are not exposed to surging prices.

The aim is to free up cash for governments seeking to shield consumers and industry from surging energy bills. EU countries have already spent 280 billion euros ($276.95 billion) in the past year on such measures, think-tank Bruegel said.

EU energy ministers meet on Friday to discuss the proposals.

The draft also outlined a target for EU countries to reduce electricity demand by 10% a month, compared with the average for the same month over 2017-2021, and a further 5% cut during periods of peak prices.

EU Commission president Ursula von der Leyen said on Wednesday the Commission would also propose a cap on the price Europe pays Russia for gas. That measure was not included in the draft document. read more

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Reporting by Kate Abnett, Marine Strauss; additional reporting by Danilo Masoni in Milan; Editing by Jane Merriman and David Goodman

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