Energy bills have been rising for households across Europe as prices have been driven up by worries about gas and oil supplies after Russia's invasion of Ukraine. Individual countries, and the European Union (EU), have announced support schemes for consumers.
In 2021, the EU imported 40% of its gas from Russia - so many of its member states are exposed to high energy prices. In response, the EU is introducing:
· A "solidarity levy" - a windfall tax - on excess profits made by oil, gas, coal and refinery companies in 2022.
· A cap on the revenues of electricity companies which produce energy from wind, solar and nuclear. These revenues have risen as the price of electricity from these sources is linked to soaring gas prices - the cap is expected to raise €140 billion (£121bn).
· A mandatory reduction of electricity consumption in peak hours by 5% across the EU, until March 2023.
· A voluntary reduction of 10% of overall electricity consumption - individual countries will decide how to do this.
German households were facing a rise in gas bills of around 62% this year, according to Reuters. The German government has announced a relief package worth €200bn (£175bn).
It includes a cap on gas prices for consumers and businesses, which is expected to last until March 2024. Other measures include one-off payments to the most vulnerable and tax breaks for energy-intensive businesses.
Germany is also trying to cut energy consumption by:
· Heating public buildings to a maximum of 19C, with exceptions for places like hospitals
· Turning off hot water for washing hands in public buildings
· Lighting limits for buildings, monuments and advertising
In January, the French government forced the state-owned energy provider, Électricité de France (EDF), to cap price rises at 4% for a year, at a cost of €8.4bn (£7bn). It says it will cap rises in gas and electricity at 15% for 2023, as part of a €45bn (£39bn) scheme to support households and businesses.
France had already announced a one-off €100 (£84) payment last year to 5.8 million households receiving energy vouchers. The government plans to reduce energy consumption by 10%. Its measures, which are voluntary, include:
· A cap on indoor temperatures at 19C
· Starting heating two weeks later this autumn, and ending it two weeks earlier than usual
· Cutting the temperature of public sports facilities by 2C and of water in public swimming pools by 1C
· Paying civil servants an extra €2.88 per day to work from home, if this allows government buildings to close
· Speed limits on ski lifts and producing less artificial snow
Italy has announced a €14bn (£12bn) plan to allow families to keep their fuel bills at around 2021 levels.
The measures include a €200 (£169) one-off payment to people earning €35,000 (£29,600) a year or less, and a 20% tax credit for all energy-intensive companies experiencing a 30% rise in prices. To help pay for this, taxes are being raised on energy companies. Overall, Italy is expecting to spend about €49.5bn (£42bn).
The Italian government is also trying to reduce gas consumption by:
· Asking people to turn central heating down by 1C and turn it off for an extra hour every day
· Limiting heating in public buildings, with exceptions for hospitals, nurseries and some industries
The Dutch government is planning to cap electricity and gas prices for households from 1 November. The prices will revert to January 2022 levels up to a certain level. Any extra use will be charged at market rates.
VAT on energy bills and tax on petrol and diesel have been cut and low income households are getting a €1,300 energy (£1,141) allowance this year to help with energy bills.
The Dutch government is also introducing:
· a higher minimum wage
· lower income tax
· higher benefits and allowances (such as child benefit, student grants and tax credits)
It is expecting to spend €15.5bn (£13.5bn) on these measures.
The Dutch government is also advising households and business on measures to cut consumption, including turning down heating by 1C. Spain has cut VAT on energy bills and reduced tax on electricity.
To pay for this, it introduced a windfall tax on energy companies, which aims to raise €3bn (£2.5bn). Spain and Portugal have introduced a price cap for gas - which will last for one year and aims to halve gas bills for 40% of customers in the two countries.
There is also a one-off payment of €200 euros for people in Spain who earn less than €14,000 a year and are not already receiving benefits. Spain's measures are expected to cost about €27bn (£23bn).
The government has an energy-saving plan which includes limiting air conditioning in public buildings and shops in the summer and keeping heating to 19C in the winter. It wants shops to close their doors when the heating is on and says they should switch off lights after 22:00.
Poland has announced plans for an energy price support package for households, worth 26.8bn zlotys (£4.8bn). It incudes freezing energy prices for 2023 at this year's level, with a limit of 2,000 kWh per year for most households.
There will be higher thresholds for households with people with disabilities and for families with three or more children. The government has abolished VAT on food, gas and fertilizer and reduced it on petrol, diesel and energy bills. It is also sending money directly to seven million households.
There is also a new mandatory 10% electricity saving for national and local government public administrations. Households that reduce electricity use by 10% in 2023 compared with 2022, will be rewarded with an additional discount.
Norway has set a maximum price that households should pay for their energy - anything over this, the government will pay 80% of the bill. A new package of loans and subsidies for businesses was announced in September. This will cover companies that spend more than 3% of revenue on power costs.
The government has also proposed new taxes on onshore wind and hydropower energy, to redistribute some of the huge increase in profits over the past year. The UK government has brought in a cap on the price of a unit of energy, which will mean the typical household bill for gas and electricity will be £2,500 over a year.
This still represents an increase on previous bills but protecting households from further price rises could cost the government up to £150bn over the next two years. This figure also includes support for businesses for 6 months.
The previous government introduced an energy bill discount of £400 for every household. Households on means-tested benefits also get a one-off payment of £650, while pensioner households receive an extra winter fuel payment of £300. There's also a one-off disability cost-of-living payment of £150.
The government has also brought in a windfall tax on UK oil and gas firms' profits, expected to raise £5bn a year. In contrast with other European countries, there has been no UK government public information campaign on how to save energy.
Some have wondered how long governments can carry on protecting consumers. If high inflation carries on into 2023 or beyond, governments might struggle to protect households.
Simone Tagliapietra, a Senior Fellow at Bruegel who has collected data on government measures to protect consumers, says: "Such heavy subsidisation is unsustainable from a public-finance perspective and damaging from geopolitical and energy-security perspectives - not to mention for the environment."
Others are fearing what could happen if Europe is unable to find alternatives to Russian oil and gas.
