Energy prices in the EU have been rising sharply since autumn 2021 and are becoming a threat to more and more people. Against this background, AK EUROPA and ÖGB Europabüro hosted a joint event on 27 June 2022 to discuss the dimensions of energy poverty and options to solve the problem.
Current price rises are no longer just a problem for households already affected by energy poverty, but increasingly also impact middle class and pensioners. Sandra Matzinger, energy expert at AK Vienna, highlighted during the event that a so-called “invisible” energy poverty also exists, describing people, who due to their precarious financial situation are used to use little to no energy. From AK’s point of view, tackling these uncontrolled price increases and currently non-functioning energy markets requires a strong political response at European and national level. Apart from targeted financial support for affected households and the urgently needed increase in social benefits, these responses also include decoupling the price of electricity from the price of gas, a new market design, a tax on windfall profits from energy companies and measures against financial speculation. Following the example of Spain and Portugal, an EU-wide gas price cap should be considered.
Monika de Volder added that from the point of view of the European Consumer Organisation (BEUC) faster reactions by EU Member States and more targeted measures are required when tackling energy poverty. Hence, the BEUC has developed a 10-point plan, comprising recommendations to combat the energy crisis, including for example to cut all taxes, charges and levies not directly related to energy production from energy bills. Apart from that, public authorities should organise collective purchase campaigns, for example to get good deals from energy suppliers. Recommended long-term measures include cutting the red tape involved in expanding renewable energy.
Alexander Friedrich, representative of the Austrian People‘s Aid & German Worker‘s Welfare Organisation (AWO) pointed out that energy poverty does not only affect people in winter, but also in summer when cooling their homes. The question of how one will be able to pay their energy bill no longer just affects people with low income but increasingly also the middle class. As regards the insulating and renovating of buildings, one must also take into account that mainly low income people live in poorly equipped homes that are in urgent need of renovation. However, the renovation of buildings creates further problems, since on the one hand, it lowers the energy bill, but on the other hand, it also leads to higher rents and can thus set displacement effects in motion. This could leave low-income households financially worse off at the end of the day. Hence, EU and Member States need to pay more attention to this issue.
Speaking for the EU Commission (DG ENER), Adela Tesarova pointed out that the Commission had presented three toolboxes proposing short and long-term measures to tackle the problem of energy poverty. In the short-term, EU Member States can, among other, offer income support to vulnerable people, regulate prices or ban disconnecting the energy supply. However, structural measures are needed in the medium to long-term. These measures include insulating and renovating houses, a faster expansion of renewable energies, or make it easier for consumers to switch providers. Positive is the confirmation that the EU Commission too has recognized the necessity of reforming the European energy market design and is already working towards this goal.
AK EUROPA Policy Brief: Rising Energy Prices, Non-Functioning Markets, Worsening Energy Poverty – Are we prepared for next winter?
AK EUROPA: EU Commission proposes new measures against high energy prices