European Commission President Ursula von der Leyen said the EU will reform the electricity market.
Von der Leyen said in her speech that the market was designed on the principle of merit order and not fit for purpose.
She said that consumers should get the benefits of low-cost renewable energy.
Von der Leyen said that the benchmark used in the gas market, TTF, had not adapted to the changes in the gas industry.
She said the commission would work on developing a more representative benchmark for trading that reflects this change, as well as easing the pressures on energy suppliers by amending rules on collaterals.
An energy crisis of both supply and pricing in Europe came to a head earlier this month.
EU energy ministers met Friday to discuss a five point plan which includes a price cap on Russian gas, a windfall tax on fossil fuel companies, a limit on revenues of renewable and nuclear companies, and emergency credit lines for power companies
After the plan was announced, Putin threatened to shut off energy supplies to Europe.
Von der Leyen said that while profits were not necessarily a bad thing, it was wrong to receive record revenues and profits benefiting from war and on the back of our consumers.
Profits must be shared and directed to those who need them the most.
Millions of households and businesses in the European Union are struggling with price rises and fear for the future.
She said that 140 billion euros would be split between member states for energy bill support.
Von der Leyen said that the bloc needs to end its dependence on Russian gas, with imports from the country already falling from 9% to 40%.
She said that they have agreed to join storage and are overshooting their targets.
She said that this wouldn't be enough. The United States, Norway, Algeria and others are reliable suppliers and we have to invest more in them.
Olena Zelenska, the first lady of Ukraine, was given a standing ovation by the parliamentarians in Strasbourg.
Zelenska wanted to personally thank von der Leyen for her contribution toUkraine becoming a candidate for EU membership
Von der Leyen, who wore the Ukrainian flag colors of yellow and blue while delivering the speech, made a number of statements on the war.
She said that the war was an attack on Europe's economy, energy, values and future and that much is at stake.
I stand here with the conviction that with the necessary courage and solidarity Putin will fail and that Europe will prevail.
Courage has a name, and that name isUkraine. The face of Ukrainian men and women who are standing up to Russia is the face of courage.
Thousands of kilometers of Russian-occupied land have been reclaimed by the Ukrainians in the last few days. Russia bombarded the region on Saturday.
Von der Leyen said that sanctions against Russia were here to stay and that it was time for resolve.
Three quarters of Russia's banking sector had been cut off from international markets, nearly 1,000 international companies had left the country, and its "industry is in tatters."
She will travel to Kyiv Wednesday to discuss this with the Ukrainian President.
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