Europe Grapples with Soaring Energy Bills

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Spain targets energy firms as European bills surge

Spain's left-wing government has agreed emergency measures to cut spiralling energy bills as electricity prices climb to record levels. 

It aims to channel €2.6bn (£1.9bn; $3bn) in energy company profits to consumers and slash electricity taxes over the winter months. 

Energy bills are climbing across Europe as gas prices soar in particular. 

Greece is promising subsidies to consumers and Italy is also aiming to review electricity bills. 

But it was Spain that moved first on Tuesday. It has seen some of the highest energy prices in Europe in recent weeks, prompting protests over the summer in a number of cities. 

'Shock plan' 

Wholesale electricity prices rose during the summer months and have continued to climb, with reports of a record high of €172.8 per megawatt hour for Wednesday, 12.6% up on Tuesday. 

Socialist Prime Minister Pedro Sánchez promised Spaniards that under his "shock plan" they would pay no more for their electricity than they did in 2018 plus inflation: 
  • Electricity taxes are being cut temporarily from 5.1% to the minimum 0.5% allowed under EU rules. VAT on bills was already reduced in July 
  • Windfall gains for energy firms will be redirected to consumers and paying for infrastructure until next April 
  • Spain will raise funds by selling off a further €900m in carbon emissions permits this year, on top of the existing €1.1bn 
  • Price caps on natural gas mean bills for 10.5m households will go up by around 4.4% instead of an estimated 28%. 
The plan to target utility firms hit shares in Endesa in particular, which slumped 5.1% on Tuesday.  

Poland is facing some of the biggest increases in energy bills, as it not only has to deal with rising gas prices but hikes in the price of CO2 permits under the EU's emissions trading scheme too, because of its heavy reliance on coal. 

Under the system, companies receive or buy emissions allowances and then trade them. 

The EU carbon price is currently trading at around €61 per tonne and is also partly behind the surge in Spanish electricity costs. "Only about one fifth of the price increase can be attributed to CO2 prices rising," said Frans Timmermans, the European Commission's vice-president in charge of climate issues. 

He was addressing the European Parliament during a debate on EU plans to cut emissions by at least 55% by 2030. Polish MP Anna Zalewska warned that citizens would "unfortunately pay for the ambitions of the EU".

Last week, the UK's energy regulator warned that the soaring cost of fossil fuels would feed into customers' energy bills. 

Italian minister Robert Cingolani warned on Monday that electricity bills were likely to go up by 40% in the coming quarter, after a 9.9% increase in the last one. "We have to face these things," he said, blaming the increase on the cost of both natural gas and CO2. 

Italy has already injected €1.2bn into the system over the summer to reduce bills but is now considering a complete overhaul of the billing system, possibly transferring the cost of supporting renewable energy to general taxation. 

In Greece, Energy Minister Kostas Skrekas said the government was planning to offer energy subsidies to the majority of households. 

A one-off payment is being considered for low-income households, as well as a €9 monthly subsidy for the first 300 kilowatt hours used by 70% of the population. 

The French government, facing a presidential election in the spring, has acknowledged that millions of consumers have been affected by price rises. 

Energy grants already benefit six million people to an average of €150 a year and Economy Minister Bruno Le Maire is considering whether the scheme should be extended.



Vocabulary:


spiral 


slash 


soar 


allow 

 


income 

Comments

Sir Joseph said…
Hi Graham,

It´s shameful the lack of prediction of Europe about the electricity supply. Now humble households and families have to pay more for this improvidence. Some European governments, especially countries of the South Europe, are against nuclear energy and nuclear power plants, but nobody copes with a clear solution. There is a reliance of energy but they shut up people and they say that we have to pay.

The cynicism of Spain is magnificent because it doesn´t want nuclear energy but it buys electricity to France that it produces electricity with nuclear power plants, that is, we are living near to nuclear power plant. What would happen in Spain if had an accident in France?

Prime Minister Mr. Sánchez promised Spaniards that under his "shock plan", we would pay no more than in 2018. The price of electricity was the most expensive in 2018 and we have to acknowledge that we will pay the same. Great. He said before that the Spanish government was guilty of energy bills are climbing. Now? Great.

Where is the European Union?

See you.
Sunday, 26 September, 2021
Graham said…
Good evening Joe,

It seems thay you jump at any opportunity to bash the government. Soaring energy bills are a Europe-wide problem. Germany has been phasing out all its nuclear power plants and apparently the'll all be shut down by next year. The Germans (and much of Europe) are now heavily reliant on Putin's Russia to provide them with gas. Another wise move by Mutti Merkel which her flock of European sheep will obediently follow.


It´s shameful the lack of foresight from Europe with regrad to the supply of electricity<7b>. Now low-income households and families have to pay more for this improvidence. Some European governments, especially countries of the South of Europe, are against nuclear energy and nuclear power plants, but nobody comes up with a viable solution. There is a reliance on energy but they silence any dissent and they say that we have to pay / cough up.

The of Spain is breathtaking because it doesn´t want nuclear energy but it buys electricity from France which produces electricity with nuclear power plants, that is, we are living with nuclear power plants nextdoor. What would happen in Spain if there was an accident in France?

Prime Minister Mr. Sánchez promised Spaniards that under his "shock plan", we would pay no more than in 2018. The price of electricity was at its highest ever in 2018 and we have to accept that we will have to pay the same. Great. He said that the Spanish government was guilty of allowing energy bills to climb. Now? Great.

Where is the European Union? (They are too busy hatching cunning plans to punish the UK)
Tuesday, 28 September, 2021
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