As households continue to feel the sting of eye-watering energy costs in Britain, how are other nations in Europe helping to reduce citizens’ energy consumption and costs?
Britain is forecast to have one of the highest rates of inflation in the developed world. According to the Organisation for Economic Co-operation and Development (OCED) economic group, the UK will have an average inflation rate of almost 7 percent in 2023 – the highest in the G7.
Labour’s shadow financial secretary James Murray described the figure as “a mark of government failure.”
As families continue to be hit hard by inflation, energy bills are still at a record high in Britain, despite the wholesale price of energy dropping from almost £6 a therm (unit of heat) in August 2022 to less than £1 today. The energy price cap has fallen to £2,074 a year, but the average household will still be forced to pay almost double the rate for energy bills than before costs started to rise steeply.
While households will see a modest fall in bills from July, those who have struggled to pay their bills over the winter, won’t feel much relief as government top-ups that amounted to £400 from October to March, have ended. The move to reduce the energy price cap is forecast to trigger a revival of supplier switching to more competitive fixed deals. However, consumers have been told not to expect a “deluge of cut-price offers.”
Government statistics from earlier this year show that 3.26 million people in England were living in fuel poverty in 2022. Charities however have warned that this figure is grossly underestimated. National Energy Action (NEA) has calculated that in February, 6.7 million people were living in fuel poverty.
As households continue to feel the sting of eye-watering energy costs in Britain, we take a look at what different European countries are doing to help cut homeowners’ energy bills.
Norway
In September last year, amid spiking energy prices, the Norwegian government said it would reallocate up to 10 billion Norwegian crowns in revenue from state-owned power grid firm Statnett to prevent a rise in household and corporate fees. The government said it would save ordinary households some 3,000 crowns a year.
Norway has subsidised household electricity bills since December 2021, covering 90 percent of the portion of power bills above a certain rate. The scheme has been extended and adjusted several times. In February this year, the government announced that the subsidy scheme would be extended until 2024.
Commenting on Norway’s commitment to cutting energy bills for households, trade unionist Howard Beckett said:
“Norway is using a £1 trillion plus wealth fund to cut energy bills for ordinary people. It builds that wealth over many years by channelling tax from energy giants into a people’s fund. The Tories chose instead to channel profits into the pockets of the rich elite and not to tax wealth.”
Germany
In October 2022, the German parliament approved a ‘defensive shield’ package worth around £175bn. The package includes a cap on gas and electricity prices for households and some businesses. The government also paid December’s monthly gas bill for all households and SMEs. Germany also places a windfall tax on energy companies, which is running from December 2022 until the end of June 2023.
Netherlands
The Dutch government has capped energy prices to 0.40 euros per kilowatt hour of electricity and 1.45 euros per cubic metre of gas for a maximum of 2,900 kilowatt hours and 1,200 cubic metres respectively for the whole of 2023.
A report in Al Jazeera shows that while France and Spain have curbed inflation the best, Germany, Italy and Greece are leading in long-term preparations to secure their energy needs. Meanwhile, the UK is struggling.
UK lags European countries on home upgrades
Britain has some of the least efficient homes on the continent, according to a report from Imperial College London. The Decarbonising Buildings: Insights from Across Europe report shows that not only have many European countries including Germany, Sweden, Norway, Italy and the Netherlands been rolling out multiple programmes and incentives to reduce citizens’ energy consumption and costs, but the UK government is falling behind in helping people conserve energy.
Lead author Dr Salvador Acha, said: “Studies show the UK’s 28.6 million homes are among the least energy efficient in Europe and lose heat up to three times faster than on the continent, making people poorer and colder.
“At a time of increased energy bills and inflation, people in the UK can’t afford to lose energy due to inefficient housing, but unfortunately energy policy in this area has been nil for many years. With the continued climate crisis, and the fact that our homes account for 30 per cent of the UK’s total greenhouse gas emissions, the planet can’t afford this lack of action either.”
In light of the findings, the Imperial College London authors are urging the UK government to create more energy efficient homes. One way to achieve this, the authors recommend, is to ensure the UK has the skilled workforce needed to make older buildings more energy efficient, and to reduce emissions from heating building by replacing fossil-fuelled systems with reliance on more efficient technologies such as electric heat pumps.
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward
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