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ENERGY

10 ways EU countries aim to cut energy bills and avoid blackouts this winter

The European Union and individual national governments around Europe are taking a raft of steps to try to limit the impact of the energy crisis this winter. Here's a look at the stand-out measures.

10 ways EU countries aim to cut energy bills and avoid blackouts this winter
EU and countries are taking steps to reduce energy bills and avoid blackouts this winter. Photo by John-Mark Smith on Unsplash

The European Commission has presented plans to tax extra profits of energy companies and reduce power consumption to cut electricity and gas prices that have skyrocketed following Russia’s invasion of Ukraine.

EU sanctions on Russia – to which Moscow has responded by cutting gas supplies – have dramatically increased energy prices, placing European households and businesses under financial strain.

At an emergency meeting last Friday, EU energy ministers asked the European Commission to flesh out initial proposals to reduce energy consumption and tax extra profits by energy companies, in order to support the most vulnerable people across the EU.

This week’s proposals will have to be endorsed by EU ministers at another meeting on September 30th.

Meanwhile, national governments have also been taking action – both to cut their energy usage to avoid blackouts and to help households deal with rising costs through caps on energy bills and more general financial aid.

Here’s what is being planned this winter;

1) Taxes on energy companies’ excess profits 

The Commission has proposed a temporary ‘solidarity contribution’ on excess profits made by companies in the oil, gas and coal sectors.

Because of gas price increases “these companies are making revenues they never accounted for, they never even dreamed of,” European Commission Ursula von der Leyen said, speaking at the European Parliament.

“In these times it is wrong to receive extraordinary record profits benefiting from war and on the back of consumers,” she argued.

National governments would therefore collect 33 percent on 2022 profits, above a 20 percent increase on the average profits made in the previous three years. The Commission is also proposing to cap temporarily the revenues of companies in the renewables, nuclear and lignite sector, which have lower costs and have also been making “exceptional” earnings because energy prices are tied to the gas price.

The Commission has proposed to set the revenue cap at €180 per megawatt hour, an amount that would not hit investments, with the extra collected by national governments.

These windfall taxes are expected to generate €140 billion, which should be redirected to energy consumers, “in particular vulnerable households, hard-hit companies and energy-intensive industries,” the Commission said.

2) Energy rationing

Under the Commission proposal, EU countries will have to reduce electricity use by at least 5 percent at peak times, when prices are the highest.

Each country will have to identify peak hours and determine ways to cut consumption. The Commission also proposes that EU countries reduce overall electricity demand by at least 10 percent until March 31st 2023.

3) Reform of the electricity market 

Ursula von der Leyen also promised a “deep and comprehensive” reform of the electricity market, which would allow for the first time below-cost regulated electricity prices to help consumers and small businesses, with possible compensation for producers.

The Commission also wants to decouple the prices of gas and electricity and the temporary introduction of state aid to help energy utilities hit by the volatility of the market.

4) Diversification of energy sources

Earlier in the year, the EU had already adopted the ‘REPowerEU’ plan which seeks to reduce energy consumption by 15 percent and accelerate investments in renewable energy. The Commission announced on Wednesday the creation of a new bank to promote investments in hydrogen.

5) Gas storage

EU countries had also agreed to fill gas storage sites ahead of winter, securing supplies from countries such as the US, Norway, Algeria and Azerbaijan.

The Commission says the bloc’s gas reserves have hit 84 percent of capacity ahead of the October deadline and EU imports of Russian gas are down to 9 percent from 40 percent in March.

Meanwhile, many national governments have also taken their own measures to deal with the crisis.

6) Cap on energy prices 

Countries such as Austria, France, Denmark and Spain have capped gas and electricity prices and France intends to fully nationalise power company EDF (which is already 83 percent state-owned) to force it to take the hit.

At the EU level, energy ministers have so far failed to agree a temporary cap on the gas price, opposed mainly by Germany and the Commission because it could put at risk supplies from other countries. A cap on Russian gas only, on the other hand, would penalise EU countries that are more dependent on Moscow.

7) Bilateral agreements 

In a show of solidarity, France and Germany have agreed to support each other should they struggle with supplies this winter. French President Emmanuel Macron said France could deliver gas to Germany and Germany could contribute electricity to the French grid during peak hours.

8) Cash payouts

Countries such as Austria, Denmark, France, Germany, Italy and Sweden have already started to support households with cash payouts to the most exposed to the crisis, including low-income families, pensioners and students.

9) Tax relief and social security support 

Several countries, including Austria, France, Italy, have reduced or paused taxes and levies on gas and electricity to help cut bills.

In order to help people deal with inflation and rising household bills, there is also a wide variety of financial aid – Austria also de-taxed employee bonuses up to €3,000; Germany reduced social security contributions for people with a monthly income below €2,000 and increased child allowances; France, Italy and Sweden raised benefits; Spain increased the amount of scholarships, grants and subsidies for students.

9) Campaigns to reduce energy consumption

Most countries are also trying to reduce energy consumption in public buildings and in the home. Austria aims to cut energy consumption by 11 percent and with the campaign “Mission 11” hopes to convince people to turn down the heating by two degrees, switch off devices and take a shower instead of a bath. A similar campaign was organised in Denmark over summer.

In France the aim to to lower the country’s total energy usage by 10 percent – the full energy-saving plan has not yet been finalised but among the measures already in place are – lowering the temperature in public swimming pools by one degree, to 25C; heating in public buildings will be limited to 19C while air-con cannot be lower than 26C; cities including Paris and Lille will stop lighting up public buildings at night (the Eiffel Tower will go dark at 11.45pm instead of 1am).

Spain has also set a limit of 27C for air-con in public buildings and shops and a heating limit of 19C with shops switching off window lights at 10pm.

10) Public transport 

For summer, until the end of August, Germany allowed citizens to travel for a month on all buses, trams, metros and regional trains with a €9 ticket.

The extension of the programme, at a higher price, is currently in discussion. Spain introduced free travel on commuter trains for frequent users between September 1st and December 31st, with discounts available for other trains.

These measures were meant to reduce both transport costs and fuel consumption. Other measures by Germany, France, Italy, Spain and Sweden focused on cost reduction cutting taxes on petrol and compensating motorists. Sweden extended incentives for the purchase of electric vehicles to cut dependence on imported fossil fuels.

Italy planned to fund measures with a 10 percent windfall tax on energy companies.

Member comments

  1. Why Sweden extended incentives for the purchase of electric vehicles and not to purchase E85 vehicles? Electric cars consumption is much more than air con or public pools or shops light…

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ENERGY

EXPLAINED: When should I turn on my heating in Denmark this year?

Energy costs in Denmark are set to reach sky-high levels this winter, which will leave many people wondering when they should start heating their homes and by how much. Here's what you need to bear in mind.

EXPLAINED: When should I turn on my heating in Denmark this year?

What’s happening?

As a result of supply stoppages for cheap Russian gas, on top of inflation; energy prices in Denmark have been at record levels for months.

Due to the situation, the Danish government has sent money to some homes impacted by high gas prices and parliament is discussing other measures for households. Public buildings are set to see thermostats turned down and outside illumination switched off.

As the temperature starts to drop throughout the country, the heating season is getting underway and many people are wondering about the best way to heat their homes, and if they have to follow any rules. 

READ ALSO: How much will Danish energy bills go up this winter?

Does it make a difference what type of accommodation I live in?

The right time to start heating up your home depends on several factors including your own personal preference, the weather, whether you live in rented accommodation or own your home, and on the heating system in your property.

How does the heating system work in Danish homes?

Around 65 percent of homes in Denmark use district heating. This system distributes hot water from heating plants to houses and apartments through underground water pipes. The system is designed to be able to heat a room to 20 degrees when there’s an outdoor temperature of 12 degrees.

This is known as fyringssæson meaning “heating season”, which usually runs from the 1st October to April 30th and is calculated when the outside daily average temperature drops to 12 degrees Celsius and below for at least three consecutive days, and ends in the spring when it reaches 10 degrees or above for at least 3 consecutive days.

Does my landlord control my heating?

A lot of rented accommodation will use fyringssæson and under Danish tenancy laws, landlords are required to supply adequate heating and hot water at all times. A daytime temperature of at least 21 degrees, sometimes 22-25 degrees, is generally recommended in all rooms via the heating system.

However due to energy costs this year, the government has announced that the temperature in public buildings will be set to 19 degrees, unless there are special circumstances requiring it to be higher. Hospitals, care homes and preschool care are exempted. The temperature in public buildings is usually set between 21 and 23 degrees.

The government has also recommended that people reduce their own heating at home by 1 to 2 degrees.

READ ALSO: How people in Denmark are changing their energy use to keep bills down

How can I keep track of my heating bill?

Earlier this year, the Danish Parliament made a rule that heating companies are obliged to provide information on energy consumption which is sent to consumers seven times a year during the heating season, where you can see how much heat is used. 

It is worth keeping an eye on energy prices and asking the property owner whether the heating system is optimally adjusted.

How can I use the radiators effectively?

“It’s a common a mistake that people sit in one heated room and leave other rooms with the radiator turned off and the door closed,” Michael Nielsen, product manager with Danish cleantech engineering company Danfoss, told The Local.

“But it’s actually more important to use all radiators at same time to heat the whole house and maybe set them a little lower. You will save energy and get more comfort this way,” he said.

Nielsen also recommends not going below a temperature of 14 degrees inside the home.

“Such a low temperature may lead to unpleasant conditions such as condensation on surfaces and mould on the walls and carpet,” Nielsen said.

Setting your radiator to the right temperature will help it work more efficiently. “In Denmark this is usually 21 to 22 degrees but the public advice is to lower this by 1 to 2 degrees this winter, to save on energy costs,” Nielsen added.

Another important thing is to check your thermostat is working and change it if it’s more than 15 years old.

“You can save around 8 percent of energy consumption on each radiator by installing a new thermostat,” Nielsen told The Local.

READ ALSO: ‘Semi off-grid’: Readers’ tips for coping with expensive energy bills in Denmark

How else can I save on heating costs?

There are plenty of ways you can help to keep your heating costs down, the most simple of which are keeping doors and windows insulated with draft excluders, and regularly airing out rooms.

“We recommend airing your house twice a day by opening the windows and turning down the thermostat.
 
“At other times it is better not to turn the heating off completely as it may take more energy to heat up the room again. Instead you should reduce the temperature by 3 to 4 degrees at night,” Nielsen said.

The Danish Energy Agency also recommends the following:

  • Check your house or apartment for any cracks where heat could be escaping.
  • Check your radiators are working efficiently and don’t put furniture right in front of them.
  • Check your windows and doors are keeping heat in or whether they need upgrading.
  • Check the insulation in the outer walls, attic, roof, floors and pipes.
  • Check your heating system is running as efficiently as possible.
 
 
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