EU to help power consumers as member states launch relief individually

EU help power consumers member states relief individually

Photo: Claudio Centonze / EC - Audiovisual Service


September 30, 2021



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September 30, 2021



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The European Commission will come up with proposals to help vulnerable households, low-income households and small businesses shoulder the spike in energy prices, its President Ursula von der Leyen said. While the European Union is preparing to intervene on a general level, many member states are already introducing emergency measures on their own.

The phenomenon of rising energy prices affects the entire planet as gas is getting more expensive everywhere due to a massive rebound in demand, especially in Asia, and slow response from suppliers, European Commission President Ursula von der Leyen claimed during her visit to Romania. Following the calls from several states including Spain and Greece to roll out EU-wide relief measures to mitigate the impact, she said the matter would be discussed next week at an informal European Council meeting in Slovenia.

Furthermore, the commissioners will adopt proposals to assist vulnerable households, low-income households and small businesses on a European level, in her words. Von der Leyen expressed satisfaction that Norway pledged to boost gas deliveries and said she hoped Russia would follow its example.

Von der Leyen: Renewables help energy independence and lower costs

On the other hand, prices of energy from renewable sources are stable, after a period of a decline, the European Commission president pointed out and stressed renewables help energy independence and lower costs.

According to some estimates, additional costs for energy consumers could amount to EUR 100 billion over the upcoming winter.

Appeals for EU-wide relief rules

After rolling out a levy for renewable energy companies and nuclear power producers to assist electricity consumers, which were also relieved of most of the surcharges and taxes on their bills, Spain urged the EU to adopt rules to curb speculation in the market for carbon dioxide emission certificates. The country also called for the establishment of a centralized European platform for gas purchases and a strategic gas reserve system.

Above all, the 27-member bloc shouldn’t leave it to member states to devise ad-hoc measures when energy prices spike, the Spanish representatives said.

Greece earmarked EUR 100 million even before the energy crisis for solar power plants to supply electricity to poor households

Greece, on the other hand, said the EU should sell carbon permits in advance or pay for relief upfront and make up the losses from future income from the Emissions Trading System (EU ETS). Benchmark prices topped EUR 66 per ton of CO2 equivalent this week to hit an all-time intraday high at the ICE Futures Europe exchange, lifting further the costs of production of electricity from coal, gas and oil.

The Balkan country was one of the first to react to soaring energy prices and it is preparing EUR 200 million to subsidize government-controlled Public Power Corp. (PPC) and other suppliers so that they lower the electricity bills for households.

In addition, the Ministry of Environment and Energy earmarked EUR 100 million in subsidies for the construction of photovoltaic facilities that will be used to meet the energy needs of households with low incomes. The mechanism will be financed from the National Recovery and Resilience Plan Greece 2.0.

Other measures are being strengthened, too, on a permanent basis, as an energy safety net for poor residents – like payments for kerosene for heating.

Slovenian companies sound alarm

As for the rest of the region that Balkan Green Energy News tracks, Bulgaria said it would subsidize the business sector’s electricity bills with EUR 330 million in the first six months of next year.

Slovenia’s Chamber of Commerce and Industry of Slovenia (CCIS) has urged the government to get involved, noting there is still no “master plan” to guide the economy into a carbon-neutral future in a safe way that would maintain competitiveness. The Turkish lira hit a record low on September 24 against the dollar, which could partly be attributed to the fact that the country is a major importer of fossil fuels.

Romania is confident it can withstand subsidy burden

Romania’s Minister of Energy Virgil Popescu revealed a five-month mechanism would be rolled out in November to cushion the blow on households and that a similar measure is in the pipeline for small and medium-sized enterprises – SMEs. He told Profit.ro the system must be simple, without much bureaucracy.

All EU member states should have a principle to follow in relief efforts, in his view. If the administration in Brussels issues a rule on the definition of vulnerable consumers, it would be beneficial for Romania.

Popescu said the subsidies would be obtained from the dividends from state-owned hydropower plant operator Hidroelectrica, an existing gas levy that limits profits in cases when prices get too high and from what the government earns from the sale of CO2 permits.

The government in Bucharest is about to issue a decree on subsidies for 5.2 million households

Households that consume between 30 kWh and 200 kWh a month will be entitled to a discount of 3.6 eurocents per kilowatt-hour, while gas bills should be trimmed by 25%, but on a yearly basis, the minister said. Popescu estimated the upcoming executive order would help 5.2 million households or 13 million people.

SMEs need to be encouraged to conduct energy efficiency measures and install own sources of energy, the minister underscored and vowed to improve existing programs. He didn’t rule out the possibility to extend the subsidies in the spring.

On the other hand, President of Romanian Energy Regulatory Authority (ANRE) Dumitru Chiriţă suggested electricity bills would be reduced by 10% to 15% if the government decides to pay for the surcharges for the support for renewable energy and highly efficient cogeneration for six months. He told the Parliament of Romania that such a scheme would cost EUR 424 million.

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