26 June 2025

Fossil Gas Freeloaders: Beyond Fossil Fuels exposes the utilities benefiting from European “capacity market” subsidies

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Analysis by Beyond Fossil Fuels reveals the energy companies that have received the highest value of European “capacity market” contracts for gas power plants, owned either directly or via subsidiary companies. Collectively, contracts provided to ten companies since 2015 will add €21.4 billion to energy bills across just five European countries. 

Controversial Czech fossil fuel giant EP Group, parent company of the toxic utility, EPH, tops the league table with contracts worth over €4 billion. It is followed by Polish companies Orlen Group and PGE, who together have received contracts worth well over €5 billion. German companies RWE and Uniper – who are behind the push for 20 GW of new gas plant subsidies in Germany – are also among the top ten companies in receipt of gas plant capacity market allocations, mainly rewarded via the British capacity market. Meanwhile, Italian gas giants Enel and A2A have together received around €4 billion in contracts, contributing to a dash for gas that sees Italy planning to add 10.75 GW of new gas plants across the country.

 

EP Group is seeking to greenwash its image with its shareholders by restructuring its business to mask its continued fossil fuel investments. Yet behind the scenes, it continues to significantly benefit from subsidies for fossil gas plants via European energy capacity markets. 

Our analysis shows that EP Group has been allocated €1 in every €11 awarded to fossil gas plants under capacity market contracts across Europe. And while energy bill payers are covering the costs of these gas plant subsidies, the parent companies behind those plants are reporting soaring profits, with their top executives personally cashing in. EP Group boss Daniel Kretinsky has an estimated net value of nearly €8.7 billion. In 2024 alone, the company reported earnings of EUR 2.6 billion.

European capacity markets have provided contracts to almost 200 gas-fired power plants, including around 30 GW of new-build gas plants. Contracts for these new-build plants stretch into the 2040s, including in countries committed to decarbonising their power systems by 2035 or earlier.

High dependence on gas for power keeps European households and businesses exposed to volatile global gas markets. The more that gas is burnt for power, the more it “sets the price” of electricity. Using capacity markets to fund fossil gas plants is therefore a double-blow for energy bill payers who have already had billions added to their bills to fund fossil plants that would otherwise be uneconomic to run.

Belgium, France*, Great Britain, Ireland, Italy and Poland currently operate capacity markets. Together, €90 billion has been allocated under their schemes since the continent’s first capacity market auction took place in the UK in 2015. A report commissioned by Beyond Fossil Fuels found that nearly €53 billion has been awarded to fossil fuel plants through European capacity markets across the period.

We need to get off the fossil fuel energy price rollercoaster. The only way to do this is to kick gas out of the market, and scale up renewables and complementary technologies, like power grids and energy storage. 

 

Beyond Fossil Fuels calls on governments to:

  • Rapidly scale-up investments in fossil free, clean flexibility, making changes to existing capacity markets, and introducing new support markets and incentives to underpin a renewables-based power system. Schemes should be designed to always favour clean flexibility over fossil fuels. These technologies include interconnectors, battery storage and demand-side flexibility schemes.
  • Set out a strategy for a 2035 fossil-free, renewables-based power system, which includes a fossil gas exit plan. This should include consideration of whether a strategic reserve is better suited to limit the market power of gas, removing gas plants from the wholesale market. 
  • End reliance on hydrogen and carbon capture and storage (CCS) in the power sector, acknowledging risks of fossil fuel lock-in, high costs and likely delays, and factoring these challenges into decisions made about funding different technologies.

 

*France’s capacity market allocations are not included in the Fossil Gas Freeloaders league table as nearly 70% of the data for gas plants below 100MW is unavailable.