On Tuesday 22 November, the government announced that it will implement Council Regulation (EU) 2022/1854 to address windfall gains in the energy sector. This will include a cap on all market revenues of non-gas electricity generators, with excess revenues to be collected and used to support electricity consumers.
The cap on market revenues will apply to non-gas electricity generators with a capacity of 1MW and introduce a cap of €120 per MWh for wind and solar, a cap of at least €180 per MWh for oil-fired and coal-fired generation, and a cap of €180 per MWh on other non-gas generation. As per EU direction, the cap will apply from December 2022 to June 2023. The government will also introduce the outlined temporary solidarity contribution to companies active in fossil fuel production and refining through 2022 and 2023.
Under the measure, taxable profits which are more than 20% above the baseline will be subject to the temporary solidarity contribution at a rate of 75%. The government expects to collect proceeds from the cap on market revenues in 2023 and proceeds from the temporary solidarity contribution in 2023 and 2024.