How are European countries dealing with energy bills crisis?

Countries across Europe have taken a variety of measures to help families cope with skyrocketing energy prices

Millions of households across the UK are currently struggling to afford sky-high energy bills, soaring fuel prices and even essentials like these Cost of Living Crisis keeps turning.

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Countries across Europe have taken a variety of measures to help with the rising cost of living

As the UK government – currently in the midst of a transition to a new prime minister – comes under pressure to do more to help households, particularly vulnerable ones, Mazic News has examined how other countries have reacted – and how the UK’s support is faring so far.

United Kingdom

In May, then-Chancellor Rishi Sunak unveiled a £15 billion support package to help people struggling through the cost of living crisis.

He said at the time he had eased public purses because of the “urgent emergency” that high inflation was causing to people across the UK.

This package included a one-off £400 rebate on energy bills, which will be paid to all UK households in October.

You don’t have to do anything to receive these payments as they are automatically applied by your energy supplier.

The government has also promised:

  • A payment of £650 to support low-income households, which will support more than eight million households that are paid benefits
  • A payment of £300 to pensioner householdswhich are paid in November and December
  • Paying £150 to people on disability pensions, in addition to the usual social benefits

A further £500m will also be given to local authorities in England under the existing Budget Support Fund – the deadline of which has been extended to March 2023.

The Netherlands

Like Britain, the Netherlands relies heavily on gas to generate electricity and heat homes. Before the war in Ukraine, the country imported up to 15% of its gas from Russia.

One of the most important measures taken by the Dutch government was the lifting of the cap on energy production from coal-fired power plants, which is expected to save 2 billion cubic meters of gas consumption per year.

This will mean the country’s environmental plans will take a hit, but Dutch energy minister Rob Jetten has claimed the Netherlands will still meet its 2030 climate targets.

Dutch Energy Minister Rob Jetten said the Netherlands would still meet its 2030 climate targets

At a press conference in The Hague, he added: “With these measures, less money is going into Putin’s war chest.”

The government has also announced an additional €3.2 billion package of measures (which came into force on 1 January 2022 and will run for a year) which includes:

  • Cut energy taxes to save households an average of €400 (£332) a year
  • Tariff reduction on petrol and diesel by 21%
  • 150 million euros to improve the insulation of houses
  • €500 million to compensate small businesses in the form of lower energy taxes
  • a one-off energy allowance of €800 for vulnerable households

France

In France, too, citizens receive a one-off payment to help with energy bills – but at just €100, this is significantly lower than in the UK.

But the French government is instead trying to solve the problem at source by forcing state-owned energy company EDF to limit electricity price increases to 4% for a full year – instead of the 45% predicted.

The move is expected to cost EDF €8.4 billion.

The final electricity consumption tax levied in France was also reduced from €22.50 per megawatt hour to just €1 per megawatt hour for all households.

Spain

The Spanish government was one of the first in Europe to tackle soaring energy bills last year, when it agreed in September 2021 to remove taxes from household energy bills by May 2022.

Instead, the money was paid by enforcing a windfall tax on utilities willing to take advantage of rising energy market prices.

More recently, the European Union has allowed Spain (and Portugal) to use billions of euros in state aid to ease the burden of soaring electricity bills.

The aid, worth €8.4 billion – €6.3 billion for Spain and €2.1 billion for Portugal – is intended to help cover electricity generators’ fuel costs.

This means that Spain has capped gas prices for households across the country.

Outside of energy bills, Spain has announced free rail travel from September until the end of the year to help citizens deal with the cost of living crisis.

The rail discounts of 100% apply to journeys with multi-journey tickets cercanías (local transport) and media distanceor medium-distance (less than 300 km) – primarily aimed at season ticket holders who have to commute to work.

Portugal

As already mentioned, Portugal received the same subsidy as Spain from the EU.

Due to the monetary subsidy, the average electricity price drops significantly to around 130 euros per megawatt hour on an annual average. In comparison, it was 210 euros in the first quarter of 2022.

The reduction benefits all consumers without exception and is valid for one year.

Prime Minister António Costa said Portugal and Spain had “come a long way… to protect businesses and families from the price spike”.

Germany

In Germany, the government has reduced energy costs by lowering the cost of supporting renewable energy projects.

That means the country has temporarily delayed the Green Deal and will reopen some coal plants to curb its heavy reliance on Russian gas.

Germany will reopen coal-fired power plants to curb its reliance on Russian gas

In addition, the federal government has decided on two aid packages totaling 30 billion euros to help its citizens with rising energy prices this year. This contains:

  • €300 as a one-time discount on the energy bill for all taxpayers
  • €100 per child to families receiving child benefit
  • €200 one-time payment to beneficiaries
  • €270 top-up for housing benefit recipients

Italy

Italian households have historically paid some of the highest energy bills in Europe, so the country was expecting one of the steepest increases in the wake of the global gas crisis.

To counteract this, the government has pledged a €14 billion fuel subsidy and an investment plan to keep energy bills under control and support families.

Employees who earn EUR 35,000 or less a year also receive a bonus of EUR 200.

In addition, the country has announced that it will tax companies that benefit from higher energy prices.