A top European Union official unveiled Wednesday a plan to cap the revenues of electricity producing companies that are making extraordinary profits due to the war in Ukraine and climate change, saying the proposal could raise $140 billion to help people hit by spiralling energy prices.

“In our social market economy, profits are OK, they are good. But in these times it is wrong to receive extraordinary record revenues and profits benefitting from war and on the back of consumers. In these times, profits must be shared and channelled to those who need it the most,” European Commission President Ursula von der Leyen said.

The war in Ukraine has sent energy prices throughout Europe soaring upwards.

In Malta, citizens haven’t noticed a change in their electricity bills, and this is thanks to the government subsidising these costs. But make no mistake, we are paying these high prices. The money being used to subsidise these costs is being paid through taxpayers’ funds, your funds.

In addition, we don’t really know for how long the government could keep up these subsidies. Thus the Commission’s plan could help all of us.

The current situation is devastating European economies and taking its toll on the purchasing power of the people.

Energy prices are also having a ripple effect on other costs, such as the cost to manufacture products, which in turn leads to rising prices. This is being felt by consumers here in Malta.

Capping prices will not draw down use, so the European Commission also wants people to consume less, particularly during peak hours. The commission's goal is to reduce electricity consumption in the bloc by at least 5% during peak use hours.

There are a number of points that need to be made. First of all, reducing our electricity consumption is not easy, but in the end would be good for the environment. Just imagine if all the people in the EU achieve that goal.

Secondly, Europe should focus far more on renewable energy.

Indeed Malta, as a small EU state, can push the renewables industry to produce a far greater share of renewable energy than we currently have. We are lucky enough to have so very many sunny days throughout the year.

Other sources of renewable energy could also be explored. Moving in such a direction would also reduce our dependence on the importation of energy or gas needed to transform into energy, which would make us less dependent on international markets.

Thirdly, renewable energy is just better for the environment, and any move towards protecting our environment for future generations is a good one.