There is a growing political debate in several EU countries over the cost of living, and energy prices play a big part in that debate. Consumers seem to be bearing the brunt of the cost of overhauling Europe’s creaking energy grid and transitioning away from fossil fuels. Politicians across the EU, from the UK and Germany to Italy and Romania, are under growing pressure from electorates to promise either to cap energy prices or find some other way to reign them in.
Some analysts argue that the wholesale price of energy (i.e. the cost to energy companies of buying gas and electricity from suppliers) has been falling in many EU countries, whilst the retail price paid by consumers has been going up. This has led to accusations that energy companies are making huge profits by squeezing their customers.
However, others argue that the way energy companies buy from suppliers has been masking the rise in wholesale prices. Many countries also tax energy heavily – for example, 55 percent of Danish electricity bills (the highest energy bills in Europe!) are made up of taxes.
When we recently spoke to Michael Kossack, Management Board Member of SHV Energy and founder of Future of Rural Energy in Europe (FREE), we asked him what could be done about energy affordability in Europe. He responded that the best way to bring down bills was to increase energy efficiency, as the cost of energy on the global market was likely to keep rising:
I would love to say to you we can reduce energy prices on the global market, but with 85% of oil production in the hand of state-owned companies, we have no ability to influence that.
We also had a comment sent in from George about the rising costs of energy globally:
We are used to having two mobile phones, two cars, a huge fridge, lighting, very warm houses throughout winter, etc. etc. In other words, the developed world consumes nearly all of planet’s currently available energy resources. If Africa started living like we do, then we would run out of energy probably by the end of the week. And this is simply disgusting, but it’s true… We must learn to live with less. A lot less. And our governments know that we are not ready to do such a thing and that is why they act as they do.
We put this comment to Eamon Ryan, leader of Ireland’s Green Party and a former Minister of Energy. Will there be enough energy to supply the world’s growing needs over the coming decades?
We also had a question sent in from Alexandru through our Suggest a Debate form, asking “Is there an EU-wide strategy for dealing with the effects of peak oil?”
Finally, we spoke to Jaroslav Neverovič, the Lithuanian Minister for Energy. We asked him how he would reassure the concerns raised by George and Alexandru:
The EU is responsible for the bulk of domestic overcharging!
Daft EU [MEAN-] GREEN levies have pushed up energy prices!
Energy market fragmentation in the interests of EU ‘competition’ has meant that in the UK for instance energy firms find it more expensive to raise funds for new capital projects ultimately passing on the additional costs to the customer.
Daft EU research policies have failed to address cheap & perpetual wave power OR cheap and safe Thorium nuclear power stations.
The EU has done some good things but its influence in the arena of energy and the costs thereof has been DISASTROUS!
“Are energy companies overcharging their customers?”
Probably on of the most pointless questions raised here which rates alongside “can a duck swim?” and “do bears sh*t in the woods?”
better to scrap the green taxes.
I think in homble opinion cap price of energy will reduce the cost of livng both in Europe and African large . This system of pricing will ensure competion and innovataion among the energy companies.
No intervention, thank you.
Over yes :D not only yes :D i give my example in Romania… 20 Euro/month i pay at electricity: i have always plugged in the fridge, the tv, the modem, the aquarium small pump and the media box from tv. i use only my notebook and not so much light, because my house has a lot of light even in the night time. I use th washmashine maybe once in a week and that’s all For Romania is extremely expensive, in the condition that, one family with a big house pays 25 euro/month
Over ?80,-/month here in Portugal. ONE person in the household.
Governments should cap prices, companies are overcharging customers, in Portugal 70% plus.
Yes they should !!!!!!
Of course they are! And we can’t do anything. They tell us (the Romanians) it is the decision of the EU.
actually no, Livia Blaga, is not the decision of EU, it`s their own policy(goverment) because corruption and lots of money are involved.
All energy suppliers throughout Europe, should be nationalised. Heating, lighting and the needs for these utilities are the essence of civilised life. No corporation should have that kind of power over a population, especially as they are a monopoly working within a cartel to defraud the public on pricing and service on every level.
All utilities must be nationalised because supply is not the priority of private concerns, profits are. Water charges are now so high in the UK it has become a threat to the nations health because being clean is too expensive for all concerns.
Mckinnon, the economist, suggest nationalisation is the answer.
And our Grannies suffering.
The fact is, ‘all’ utilities must be nationalised. They are the life blood of the people and private companies are solely interested in profit not in the well being of the nation. The cost is too high to be sustainable.
Why is Europe mute over this phenomenon? This last clip shows how it costing government, through taxation, an absolute fortune. Why are you not furious about this waste of money and the blatant exploitation of us all?.
O monopólio de energia da Europa deviam ser naconalizados Os mandatários dos estados da Europa estão dentro de um circuito fechado com uns quantos poderosos dos seus estados onde só tem olhos para roubar o roubado Eu defendo que todos os serviços publicos devem ser nacionalizados eles são o copo de água diario dos cidadões da Europa
I don’t think a cap on energy prices would be a good idea.
The fact is that the UK (and most other EU states) will require a large amount of money to be spent on new infrastructure to in order to expand generation to cope with future demand while simultaneously decarbonising. This will involve three principle phases:
Generation – Renewable generation – off/offshore wind, tidal, wave, solar, biomass etc; Gas – combined power & heat; and Nuclear (although I admit this is controversial to many).
Transmission – Further decentralisation of EU states’ energy grids that are able to transfer major power flows between states and regions is necessary for renewables to work effectively, allowing demand to be met efficiently. (see North sea offshore grid).
Storage – In the longer term, as renewable energy makes up the majority of energy generation, there will be a need to store the energy during times of low demand and high generation. I think this will be the hardest part: the technologies are undeveloped. Currently, the major technique is pumped storage, which brings with it problems of landscape and ecological destruction.
These challenges are huge – it is a simple fact that it will require large amounts of money. Rather than a cap on bills, I would like to see limits on the profits of energy companies to ensure that the money being paid into the system is being spent on the infrastructure we will need in the future.
I agree with Catherine Benning, energy is (and so should be treated) like a right for all european citizen (if not the entire world). I know at this point it seems to be idealistic, but this is with idealistic idea that we change the world, not with conservative ones.
Yes it costs a lot to develop new infrastructures, a new world.
But here again, as for many other subjects, the right answer is that ECB should ALSO be “europeanized”. So WE could decide the cost of OUR money and therefor where and how we invest it.
EU should create an european size consortium of nationalized energy companies that work together to reduce costs, innovate and streamline energy between states.
Also our politicians should make low to promote self-sufficiency in energy for every citizen. The surplus would be injected in the international grid.
Perhaps so, but governments should first stop billing us for green energy subsidies. Green energy isn’t really green and it requires subsidies. They are billing us in the name of the global warming cult.
Nationalise and stop the theft.
Agreed with Catherine. Why are PRIVATE corporations even allowed to control key resource of a nation?
Nationalize them now and the main problem of “profits > people’s welfare” is done away with.
Corporations will ALWAYS charge as much as they can/know the public will be willing to pay without gutting them with forks.
And force the GOVERNMENT that nationalized those services to push even harder the green energy technology and phasing out of dirty energy.
The problem with nationalizing will be that the member states will try to take control individually thus we’re going back to a clusterf…k.
The government in Brussels should be put in charge of the energy distribution (power grid). That way, a standarized concept could be put in place throughout the union and differences in energy prices reduced. While some prices for energy are probably too high we must not forget that certain prices are still too low to cover the actual cost, especially gas and diesel.
Capping energy prices might probably have a positive economic impact, as manufacturing cost could decrease. Households could keep a bit more income to themselves.
Also, heating and electricity debt is a serious problem among the population.
Decreasing energy prices indeed should be a policy priority, a part of the countries’ social or welfare agenda.