Ms Catharina Sikow-Magny:

We certainly agree that the revenues collected by means of either of the measures should go back to help those who are suffering as a result of the high prices, be it households or certain companies, in particular SMEs and vulnerable households.

On the question of the solidarity contribution and its application to the sectors we have mentioned in the law, namely the fossil sectors, we have proposed a law which is addressing the problem at the root these high prices stem from within the energy sector. They stem from fossils, particularly gas, which then also had impact on coal and oil and subsequently on electricity. Given the exceptional situation the measure is addressing, we did not propose and have not considered expanding it to other sectors like pharma and the ones the Deputy mentioned. We have to keep in mind that this is a solidarity contribution in a very exceptional situation that is coming from the energy sector and from the fossil fuel part of that sector, stemming also from the Russian war in Ukraine. If a member state wants to apply a different taxation policy, taxation being a national competence, it is obviously something that a member state may wish to consider in line with the general rules that may be applicable there.

On the question of the level of the excess profit and the figure of 75%, this is not an exact science in determining the excess revenues that those companies received. That is why we also have the different rules on the average of the past five years, how we propose to take into account possible losses during those years. This is not an exact science in the sense that we would go into every detail and every year of a company's books. The figure of 75% also gives the benefit of the doubt to the companies that we are not over-recovering the extra profits they made during 2022 or 2023.

On the electricity markets, renewables and nuclear, our market is based very much on the short-term markets, day-ahead market and intraday markets. It has actually worked quite well during the crisis and worked even better before the crisis. Here I would want to give some examples. The high prices do not only reflect production costs, although production costs obviously were very high for gas-produced electricity. The high prices also reflect scarcity in the market. In the course of 2022, we lost a big part of our gas supply, a large proportion of which is used for electricity production, creating significant scarcity. In addition, half of French nuclear reactors were in maintenance and were not producing as usual. The year was extremely dry in the Iberian peninsula and in the very north, so the hydro power that normally one can rely on was not coming on-stream, meaning we had significant scarcities in the electricity sector as well. Yet the market worked. There was electricity everywhere in the EU despite these difficulties. France, which in the past has been one of the important exporting countries, became an importing country. Had the high prices not been there as an indicator that France needed to import electricity, we could have had a situation of not having electricity all the time as we had this winter. The market has worked well in providing electricity to where it is needed from where it is produced. However, and this is something we have taken up in the electricity market design proposal that was tabled a month ago, this short-term market, the day-ahead and intraday markets, needs to be complemented by longer-term price signals. This is where we have also looked at member state practices. Member states in the Nordic markets, for instance, have 80% even in some of them in long-term markets where electricity is sold ahead for three years or even longer on a stable price.

This is what we have proposed in the electricity market design, to bring these long-term price signals to the whole EU, through these public private purchase agreements between private operators. So for those that produce and those that consume electricity, a Government backed contract for difference but also determining a strike price and if the market price goes above it, then that would be returned to consumers. There would also be a better possibility to protect one's price through hedging. We also propose to have these hedging markets, which today are liquid only in the Nordic market and in Germany. We also propose to make these Europe wide so that companies can have their price protected whether they sell or buy electricity, and not only companies but households through their suppliers.

We would say that the market has worked well. It has ensured a secure supply and the best prices even if they were very high in a situation of extreme scarcity like last winter. Indeed, we need to create a long-term price signal. In addition, there are measures whereby we also require member states to better protect consumers by, for instance, making sure that consumers can have access to longer-term fixed-price contracts not only dynamic contracts. That would mean consumers would have a choice according to their consumption and risk perception. In every member state there shall also be a supplier of last resort in case suppliers leave the market. Again, in a crisis situation, member states would be allowed to regulate retail prices, if prices become extremely high and consumers cannot afford to pay.

On the Deputy's questions on the losses and capital expenditure, I will need to come back to her separately as I will need to dig into the details. I apologise for that.