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Which countries are doing the most to tackle energy bills? Which countries are doing the most to tackle energy bills?
(17 days later)
A power plant in Tuscany, northern ItalyA power plant in Tuscany, northern Italy
Energy bills have been rising for households across Europe in recent months. The price increases are being driven by rising energy demands and worries about gas and oil supplies in the wake of Russia's invasion of Ukraine.Energy bills have been rising for households across Europe in recent months. The price increases are being driven by rising energy demands and worries about gas and oil supplies in the wake of Russia's invasion of Ukraine.
Individual countries, and the European Union (EU), have announced support - worth many billions of pounds - to help people struggling to meet their energy costs. Individual countries, and the European Union (EU), have announced support schemes, worth many billions of pounds.
Here's what they're doing:Here's what they're doing:
The EUThe EU
In 2021, the EU imported 40% of its gas from Russia - so many of its member states are exposed to high energy prices.In 2021, the EU imported 40% of its gas from Russia - so many of its member states are exposed to high energy prices.
European Commission president Ursula von der Leyen has proposed a cap on the revenues of electricity companies which produce energy from wind, solar and nuclear sources. European Commission President Ursula von der Leyen has proposed:
She said they were benefiting from "excess revenues" and estimated the cap would raise €140 billion (£121bn) to help shield consumers from high bills. A cap on the revenues of electricity companies which produce energy from wind, solar and nuclear sources. 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).
She is also planning a windfall tax on the profits of oil, gas and coal companies. A "solidarity levy" - or windfall tax - on excess profits made by oil, gas, coal and refinery companies in 2022.
The plans will go ahead if EU member states approve them but it is not clear yet how quickly this could be done. She also proposed a mandatory reduction of electricity consumption in peak hours by 5% across the EU, until March 2023
The EU also wants to target energy demand with a call to cut electricity consumption at peak hours by at least 5%. It has also agreed a cut to gas consumption of 15% by March 2023. This is voluntary - at the moment - and member states will have to decide how to do this. The plans were approved by EU energy ministers on 30 September and will apply from 1 December 2022.
GermanyGermany
German households pay more for electricity than any other country in the EU and 4.2 million German households will see their gas bills rise by an average of 62% in 2022 according to Reuters. On 29 September, the German government unveiled plans for a relief package worth €200bn (£175bn).
Germany is the largest net-importer of Russian fossil fuel. German households had been facing a rise in gas bills of around 62% this year, according to Reuters.
In September, the German government announced a €65bn (£56.2bn) package of measures, including one-off payments to the most vulnerable and tax breaks to energy-intensive businesses. The package, which includes a cap on gas prices for consumers and businesses, is expected to last until March 2024.
The government had already brought in subsidies for low-income households, cuts to petrol and diesel taxes, a one-off €300 (£253) pay-out, extra child support payments and public transport discounts. Germany had already announced a €65bn (£56.2bn) package of measures, including one-off payments to the most vulnerable and tax breaks to energy-intensive businesses.
It is also trying to cut energy demand by:It is also trying to cut energy demand by:
dimming street lightsdimming street lights
turning off fountainsturning off fountains
lowering the temperature in public swimming pools.lowering the temperature in public swimming pools.
Turning off fountains is one way Germany is trying to reduce its energy demand.Turning off fountains is one way Germany is trying to reduce its energy demand.
FranceFrance
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).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).
France had already announced a one-off €100 (£84) payment last year to 5.8 million households receiving energy vouchers. Since then, it has also reduced taxes on electricity. It says it will cap rises in gas and electricity at 15% for 2023, as part of a €45bn (£39bn) to support households and businesses.
According to Bruegel, a Brussels-based think tank, France is expected to spend €45bn (£38bn) to support people through the cost of living crisis. France had already announced a one-off €100 (£84) payment last year to 5.8 million households receiving energy vouchers.
In March dozens of French taxi drivers protest against a hike in fuel prices.In March dozens of French taxi drivers protest against a hike in fuel prices.
ItalyItaly
Italy has announced a €14bn (£12bn) plan to allow families to keep their fuel bills at around 2021 levels. It also wants to invest more in renewable energy. 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.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 for energy companies.To help pay for this, taxes are being raised for energy companies.
Overall, Italy is expecting to spend about €49.5bn (£42bn).Overall, Italy is expecting to spend about €49.5bn (£42bn).
Giorgia Meloni, who is poised to be the next prime minister, says she wants to protect industry and agriculture from risings costs, but hasn't given any more details of further support.
NetherlandsNetherlands
VAT on energy bills and tax on petrol and diesel have been cut by the government.VAT on energy bills and tax on petrol and diesel have been cut by the government.
Low income households are getting a €1,300 energy (£1,141) allowance this year to help with energy bills.Low income households are getting a €1,300 energy (£1,141) allowance this year to help with energy bills.
The 2023 budget, which will be announced on 20 September, is expected to include another €1,300 for poorer households as well as:The 2023 budget, which will be announced on 20 September, is expected to include another €1,300 for poorer households as well as:
a higher minimum wagea higher minimum wage
lower income taxlower income tax
higher benefits and allowances (such as child benefit, student grants and tax credits)higher benefits and allowances (such as child benefit, student grants and tax credits)
The Netherlands is expecting to spend €16 billion on these measures.The Netherlands is expecting to spend €16 billion on these measures.
SpainSpain
It has cut VAT on energy bills and reduced tax on electricity. 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).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 has been backed by the European Commission.Spain and Portugal have introduced a price cap for gas - which has been backed by the European Commission.
The cap will last for one year and aims to halve gas bills for 40% of customers in the two countries.The cap 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.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).Spain's measures are expected to cost about €27bn (£23bn).
Norway
In Norway, the government has set a maximum price that households should pay for their energy - anything over this and the government will pay 80% of the bill.
This measure, along with other support, will cost around 40.6bn Norwegian Krone (£3.6bn).
PolandPoland
As part of an "anti-inflation shield", the Polish government has announced a plan to cut VAT on food, gas and fertilizer to 0%. It has announced plans for an energy price support package for households, worth 26.8bn zlotys (£4.8bn).
There have already been cuts to VAT on petrol, diesel and energy bills. It incudes freezing energy prices for 2023 at this year's level, with a limit of 2,000 kWh per year for most households.
In July, Poland's government approved an allowance of €630 (£557) to households that use coal for heating, as prices climbed to a record high. There will be higher thresholds for households with people with disabilities and for families with three or more children.
It is also sending money directly to seven million households, with some eligible for as much as €306 (£258) per year. The government has abolished VAT on food, gas and fertilizer and reduced it on petrol, diesel and energy bills.
Poland is expected to spend €8bn (£6bn) on support measures overall. It is also sending money directly to seven million households.
Norway
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.
UKUK
On 8 September, the government announced it would limit energy bill rises for all households for two years. The 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.
A typical household energy bill will be capped at £2,500 annually until 2024. 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.
The scheme could cost up to £150bn. How does the energy price cap work?
The previous government introduced an energy bill discount of £400 for every household. Households on means-tested benefits will also get a one-off payment of £650, while pensioner households will receive an extra winter fuel payment of £300. There will also be a one-off disability cost-of-living payment of £150. What is the windfall tax on oil and gas companies?
These payments will be partly funded by a 25% windfall tax on oil and gas firms' profits, expected to raise £5bn. 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.
Are these plans sustainable?Are these plans sustainable?
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.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.
"Such heavy subsidisation is unsustainable from a public-finance perspective and damaging from geopolitical and energy-security perspectives - not to mention for the environment," says Simone Tagliapietra, a Senior Fellow at Bruegel who has collected data on government measures to protect consumers."Such heavy subsidisation is unsustainable from a public-finance perspective and damaging from geopolitical and energy-security perspectives - not to mention for the environment," says Simone Tagliapietra, a Senior Fellow at Bruegel who has collected data on government measures to protect consumers.
Others fear what could happen if Europe is unable to find alternatives to Russian oil and gas.Others fear what could happen if Europe is unable to find alternatives to Russian oil and gas.
"The most difficult moment should be the autumn and winter ahead," says Ilaria Conti, head of gas at the Florence School of Regulation."The most difficult moment should be the autumn and winter ahead," says Ilaria Conti, head of gas at the Florence School of Regulation.
The overall figure for UK was updated to take account of analysis by the IFSThe overall figure for UK was updated to take account of analysis by the IFS
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