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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 Italy | A 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 schemes, worth many billions of pounds. | |
Here's what they're doing: | Here's what they're doing: |
The EU | The 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. 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 "solidarity levy" - or windfall tax - on excess profits made by oil, gas, coal and refinery companies in 2022. | |
She also proposed a mandatory reduction of electricity consumption in peak hours by 5% across the EU, until March 2023 | |
The plans were approved by EU energy ministers on 30 September and will apply from 1 December 2022. | |
Germany | Germany |
On 29 September, the German government unveiled plans for a relief package worth €200bn (£175bn). | |
German households had been facing a rise in gas bills of around 62% this year, according to Reuters. | |
The package, which includes a cap on gas prices for consumers and businesses, is expected to last until March 2024. | |
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 lights | dimming street lights |
turning off fountains | turning 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. |
France | France |
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). |
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. | |
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. |
Italy | Italy |
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. | |
Netherlands | Netherlands |
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 wage | a higher minimum wage |
lower income tax | lower 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. |
Spain | Spain |
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). |
Poland | Poland |
It 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. | |
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. | |
UK | UK |
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. | |
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. | |
How does the energy price cap work? | |
What is the windfall tax on oil and gas companies? | |
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 IFS | The overall figure for UK was updated to take account of analysis by the IFS |
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