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: