Electricity charges: what are other countries doing to ease the pain?

Electricity charges: what are other countries doing to ease the pain?

8th Feb 2022

Mixture of price caps, tax cuts and cash offsets across different European countries

Surging energy prices over the past year have prompted many European Union governments, and now Britain, to step in with measures to ease the burden on homes and businesses.

Moves include subsidies for low-income families, tax cuts, windfall levies on power companies and suspending costly aid for renewables.

Austria

Austriasays it will spend €1.7 billion on easing the impact of surging power prices on families. The measures announced last week include suspending an eco tax introduced six years ago that adds about €33 a year to bills.

The government is also pledging to hand €300 back to those out of work. Electricity prices there are up 12.4 per cent on last year.

Belgium

Belgium said earlier this month that it will cut value added tax on electricity as part of a package to shield consumers from rising energy prices. It is also giving all households a €100 relief on electricity bills, and extending its social price rate.

Britain

Britain’s price cap will rise by 54 per cent from April 1st, the regulator Ofgem announced on Thursday in its six-monthly review of prices. To limit the impact the government launched a package of measures including a £200 (€238.28) discount on electricity bills for all households to be repaid over five years, and a £150 rebate on council tax bills for about 80 per cent of households in England.

Bulgaria

Bulgaria’s parliament voted in December to freeze power and heating prices for households until the end of March in a move seen as allowing time for the new coalition government to come up with a plan to shield households from surging energy costs.

Czech Republic

The Czech parliament’s lower chamber has approved a government bill easing conditions for social benefits connected to housing, which is intended to help those hardest-hit by the energy price surge.

Denmark

Denmark has vowed to help low-income families through the crisis, but the government has not proposed any firm measures beyond earmarking €13.5 million for local councils to top up some welfare payments.

Electricity prices there have doubled for many people.

France

Franceis limiting electricity price rises due to kick in next month to 4 per cent and will return €100 to almost six million lower-income families.

Meanwhile, the government there is forcing the mostly state-owned energy giant ÉDF – Électricité de France– to supply cheap nuclear-generated electricity to rivals, a move the company warns will cost it €8 billion this year.

Nuclear power generates about 70 per cent of French electricity needs, giving it some of Europe’s cheapest energy prices and allowing the country to export power to its neighbours.

France’s government also regulates gas prices. It claims that gas charges would have risen 45 per cent, instead of 12 per cent, if it had not stepped in.

Germany

Germany has promised to help poorer households cope with the crisis, but has not proposed any firm measures yet. About a third of its electricity comes from burning coal, which the government wants to phase out.

The government is considering scrapping a surcharge on bills meant to support renewable electricity businesses. The levy means households shoulder a third of Germany’s total electricity bill while using just 25 per cent of the available power.

Italy

Italy’s government has spent more than €8 billion since last July on efforts to curb soaring energy bills, including €1.7 billion announced recently. The country also announced a clawback of high profits earned by wind and solar power generators from electricity prices that have risen more than 20 per cent in a year. The state plans to return cash to consumers hit by soaring prices. Renewable-energy lobby groups oppose the move.

VAT on gas has been cut by five percentage points.

The government has also temporarily suspended what it calls “system charges”, such as renewable energy subsidies and the cost of decommissioning nuclear fuel and plant, which between them are reported to account for about 20 per cent of average housing energy bills.

Netherlands

The Netherlands has cut energy taxes for its eight million households.

Norway

Norway subsidised household electricity bills in December, paying 55 per cent of the portion of power bills above a certain rate, which it has increased to 80 per cent for January-March.

Poland

Poland has announced tax cuts on energy, petrol and basic food items, as well as cash handouts for households.

Spain

Spain has cut taxes – including VAT and a special electricity tax which will be assessed at 0.5 per cent rather than 5.1 per cent – to ease the burden on families and it has capped gas prices. Electricity prices have risen 40 per cent there. Spain’s government is also considering a windfall tax on power companies from which it aims to raise €2.6 billion that it will return directly to consumers.

It is also using up to €900 million from carbon emission permit auctions to help cut bills, and is extending to 10 months its ban on cutting off customers for non-payment.

Sweden

Sweden has set aside about €600 million to compensate families worst hit by rising power prices.