(Bloomberg) -- Greece has laid out proposals to reduce the influence of surging natural gas costs on electricity prices.

Benchmark European gas prices have soared fivefold in the past year, pushing up the cost of power and prompting governments across Europe to look at reforming so-called marginal pricing. That’s where the most expensive megawatt needed to meet demand, currently from natural gas, sets the power cost for all generation.

Under Greece’s plan, electricity produced from renewables, hydro and nuclear will be separated into one pot while gas and other fossil fuels will be priced separately. The proposal will mean lower revenue for clean power, reflecting a lower cost of production, the government said in a document seen by Bloomberg News.

“This could ensure roughly 50% of lower electricity prices, given that on-demand sources (such as natural gas) have only a one-third share of the electricity mix, a share that will continue to decline as the energy transition accelerates,” the government said.

The government needs to find ways to help cut energy bills for consumers, and reducing the influence of gas on power charges would help. 

The first pot will supply about two-thirds of demand at a lower cost, while the second will provide the rest, reducing the overall price of electricity. The average cost of power production is as much as 60% lower than the market price, the government said.

The Greek paper was shared with member states ahead of a meeting of the European Union’s energy ministers, who are looking to agree on emergency gas plans and will also discuss the future of the bloc’s energy supplies.

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The UK is considering a similar proposal as it looks to reform its electricity market. Spain and Portugal have introduced a cap on gas prices to try and limit costs for consumers.

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