London Daily

Focus on the big picture.
Sunday, Sep 13, 2026

Soaring energy costs trigger radical market shake-up in Brussels

Soaring energy costs trigger radical market shake-up in Brussels

Von der Leyen wants to rip up electricity markets and raise cash from power firms to help consumers.

Energy companies will be hit with a cap on profits to raise €140 billion to help struggling consumers with rocketing bills, under plans for a sweeping overhaul of EU power markets that are “no longer fit for purpose,” Ursula von der Leyen said on Wednesday.

In an annual State of the Union speech dominated by the war in Ukraine — the European Commission president even wore an outfit to match the country’s blue and yellow flag — von der Leyen promised “comprehensive reform” of the bloc’s electricity market, and a new task force to examine how to cap the price of gas.

Those are calls the EU leader has made before, but there’s a growing sense that keeping energy prices down is key to the EU’s long-term ability to continue supporting Ukraine in its existential fight with Russia.

Von der Leyen also suggested rewriting the European Union’s founding treaties to shake up the way the bloc’s leaders make decisions, an idea bound to cause arguments, especially in countries like Poland, where the effort will be seen as a Brussels bid to impose rules on the nationalist government.

Von der Leyen’s blueprint is designed to help the EU weather the storm of rocketing inflation, runaway power prices and a war on its borders that she said is putting the future of democracy at risk.

“We will be tested — tested by those who want to exploit any kind of division between us,” von der Leyen told members of the European Parliament in Strasbourg. The bloc is facing not just a security threat from Russia’s invasion of Ukraine, but a broader war, she said.

“It is a war on our energy. It is a war on our economy. It’s a war on our values. It’s a war on our future,” she said. “It is about autocracy against democracy and I stand here with the conviction that with the necessary courage and with the necessary solidarity Putin will fail and Ukraine and Europe will prevail.”

The wide-ranging annual address is a chance for the Commission president to set out her legislative and political priorities for the year ahead. This time, there was one big preoccupation: how to respond to the crisis triggered by Russia’s invasion of Ukraine.

First, von der Leyen offered deeper economic support for Ukraine itself. While she stopped short of major new pledges on funding supplies of weapons or hitting Russia with more sanctions, she said she would work to open up the EU’s single market to give Ukraine “seamless access.”

“Today, I am going to Kyiv to discuss all this with President Zelenskyy,” she said, as the Ukrainian leader’s wife Olena Zelenska listened as a guest of honor in the Parliament chamber.

The most urgent part of von der Leyen’s address focused on the energy crisis now gripping the EU. The electricity market is “not fit for purpose anymore,” she said.

Von der Leyen said the bloc must decouple gas prices from the cost of electricity — currently, the EU’s pricing structure ties all power costs to the price of gas, a move meant to encourage more sustainable energy use.

Ukraine’s first lady Olena Zelenska listened as a guest of honor in the Parliament chamber


But after the war threw the energy market into disarray, countries like Spain started calling for the EU to decouple the link between gas and electricity pricing. Until this summer, though, the idea was given short shrift from Brussels.

“Consumers should reap the benefits of lower-cost renewables,” she said.

A levy on soaring profits for utilities generating power from low-cost sources and from fossil fuel companies will raise €140 billion to help families across the bloc who face impossibly high bills, she said.

“In these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers,” she said.

The EU will continue cutting its reliance on Russian energy by relying on gas suppliers like Norway and the U.S. and beefing up its gas storage.

“Russia keeps on actively manipulating our energy market … This market is not functioning anymore,” she said.

Von der Leyen’s speech also included:

— A relief package for small family businesses, including rewriting late payment rules so firms don’t go bust because invoices have not been paid

— Backing for French President Emmanuel Macron’s plan for a European “Political Community”

— A Critical Raw Materials Act, to help the bloc develop an industry for minerals used in electric vehicle batteries, for example

— Plans to deepen ties with “like-minded partners,” especially aspiring EU members Ukraine, Moldova and Georgia

— A pledge to fight for democracy, taking on internal EU threats to rule of law standards. A new Defense of Democracy Act will be published

— A call for a new European Convention, a gathering that would mark a step toward changing the bloc’s founding treaties to overhaul decision-making.

Newsletter

Related Articles

0:00
0:00
Close
Tesco Alerts Police After Scammers Use Its Branding in AI-Generated Fraud
Lindy Cameron Appointed First Female Permanent Under-Secretary at UK Foreign Office
UK Government to Rewrite Student Loan Guidance After Mis-Selling Criticism
Welsh First Minister Warns Andy Burnham Government to Respect Devolution
Trump’s Falkland Islands Remarks Trigger New Diplomatic Tension With Britain
Reform UK Receives Record £72 Million Donation From Cryptocurrency Billionaires
UK Bans Imports From Israeli West Bank Settlements and Sanctions Supporting Institutions
Bayeux Tapestry Draws Large Crowds at British Museum
Cuts to International Aid Raise Concerns Over Fragile Overseas Health Systems
UK Airlines and Logistics Operators Adjust Capacity as Fuel Costs Rise
UK Mortgage Arrears Edge Lower in Second Quarter
UK Government Advances New Devolution Offers for English Councils
UK Parliament Begins Debate on NHS Governance and Single Patient Record Reforms
Andy Burnham Launches Number 10 North Devolution Initiative
UK Parliament Rejects Assisted Dying Bill for Terminally Ill Adults
UK Bans Goods From Israeli Settlements in the Occupied West Bank
UK Economy Grows 0.4% in July as Technology Services Strengthen
Metropolitan Police Continue Investigation Into Reform UK Political Financing
Chinese Crypto Entrepreneur Leon Li Identified as Seller of £190 Million London Mansion
Trades Union Congress Proposes Social Energy Tariff Funded by Higher Bank Surcharge
British Chambers of Commerce Calls for State Pension Triple Lock to Be Scrapped
Anthropic Says Claude Helped Disrupt Biological Weapons and Cyber Espionage Threats
UK Imposes Sanctions Over Israeli Settlements and West Bank Violence
UK Reimposes Sectoral Sanctions on Iran’s Aviation, Shipping and Energy Networks
UK Economy Grows 0.4% in July as AI and Programming Services Lift Activity
UK House of Commons Rejects Assisted Dying Bill by 286 Votes to 270
UK Reviews Nationwide Emergency Alert Tests After Systems Meet Reliability Targets
UK Seeks Faster Rail Links Across Northern Industrial Corridors
British Business Bank Allocates £150 Million for High-Growth Companies in Northern England
BBC Warns Staff Strikes Are Possible Amid Pay Dispute and £500 Million Savings Drive
UK Backs Short Extension of UN Sudan Sanctions Regime
Prime Minister Andy Burnham Defends Early Prison Release Reforms and Growth Strategy
Reform UK Faces Scrutiny Over Alleged Effort to Circumvent Foreign Donation Rules
UK Analysts Warn Tax Rises or Spending Cuts May Be Needed to Preserve Fiscal Headroom
Jaguar Land Rover Plans Up to 4,000 Job Cuts in £1.7 Billion Cost-Saving Drive
UK Chancellor Warns of Difficult October Budget as Borrowing Costs Rise
UK Declares Israeli Occupation of West Bank Unlawful and Expands Sanctions
UK House of Commons Rejects Assisted Dying Bill for England and Wales
English Councils to Gain Power to Introduce Tourist Taxes by 2028
Kemi Badenoch Reshuffles Conservative Shadow Cabinet
Firefighters Make Progress Containing Major Wildfires in South Wales
John Lewis Partnership Reports £124 Million Loss
Study Says UK AI Data Centres Will Create Only a Quarter of Forecast Jobs
UK Government Considers Higher Industrial Water Prices Amid Supply Pressures
Andy Burnham Holds First Call With Donald Trump as UK Prime Minister
NHS Records Busiest Summer on Record as Heatwaves Drive Hospital Admissions
Home Secretary Orders Police Crackdown on Far-Right Anti-Migrant Vigilantes
UK Supreme Court Rules Northern Ireland Religious Education Curriculum Breaches Human Rights Standards
Markets Price in Four Bank of England Rate Rises by Next Summer
House of Commons Prepares Free Vote on Assisted Dying Bill
×