How the energy price crisis occurred
A series of circumstances have converged to create the current energy price shocks. The post-Covid economic restart has triggered high demand for energy which has put pressure on supplies of sources such as natural gas. Climatic factors including unexpected temperature fluctuations and a lack of predictable wind power have led to erratic demand and supply.
In addition, EU trading and market mechanisms such as the Emission Trading System and electricity market design have pushed up prices, and the complex geopolitics of supply lines has had an impact.
The energy price crisis will worsen for consumers in 2022 as retail prices continue to rise. Escalating bills across the EU and around the world leave many unable to access the affordable energy they need to warm, light and run their homes.
Euroconsumers direct help and strategic influence
The response from Euroconsumers and its member organisations demonstrates the breadth of strategic action and direct support that consumer groups take when markets don’t deliver for consumers or the environment. Through direct help, harnessing the collective consumer voice, fighting on their behalf at the policy level and running practical schemes to push markets towards better prices they are not only targeting the immediate price crisis but advocating for longer term market reform.
Direct help for energy consumers
Test-Achats/Test-Aankoop (Belgium) has launched a dedicated hotline in Dutch and French for people with concerns about rising energy prices and its website has explainers on why prices are so high. They also ran a Facebook Live session to explain the rising energy prices (French version here), and one to help consumers affected by the sudden bankruptcy of a provider.
Deco Proteste (Portugal) is also providing consumers with practical tips on how to save money on home heating and on how to save energy in general and have opened up their energy comparison tool to consumers to help them compare and choose the best tariff. Altroconsumo (Italy) is sharing recommendations, advice and energy price comparison tools with consumers to help them tackle their energy situation.
Amplifying the consumer voice
All four Euroconsumers member organizations are mobilizing consumers to demand changes to the way energy pricing and billing works. OCU has already helped win cuts in VAT/IVA from 21% to 10% on consumers’ bills but are continuing their campaign for deeper changes to energy markets. Altroconsumo’s petition for price reductions was accompanied by wider structural proposals for reform to ensure the market is more consumer centered.
Harnessing consumer market power: collective energy purchasing
OCU is running its sixth collective energy purchasing scheme for consumers in Spain, previous schemes have helped over 100,000 consumers save money on electricity and gas. Collective purchasing schemes group together consumers so they can negotiate a better price for a service. OCU acts as a trusted intermediary who negotiates exclusive rates for the group and helps consumers to calculate the difference between their individual tariffs and the tariff negotiated by OCU. The savings for each consumer in the 2021 scheme is estimated to be €241.
Europe wide influence
Euroconsumers has published an exploratory discussion paper, which looks at potential solutions to:
Make energy bills affordable, transparent and fair by moving taxes, tariffs and levies to tax sheets and not obscuring them on bills.
Remove or reduce the amount of VAT on energy to reflect that household energy is not a luxury but a basic, vital necessity.
Guarantee social measures for low- and medium-income households at times of extreme price spikes.
Explore potential improvements to energy market mechanisms in Italy, Spain, Portugal and Belgium.
Link up energy supply to use and management through prioritising sustainable housing, and dramatically improving incentives for consumers to produce and consume renewable energy.
Testing practical solutions
Euroconsumers members are also involved in groundbreaking new multi-stakeholder projects which are: testing the best ways to encourage consumers to install efficient home heat systems HARP project helps consumers understand home energy retrofits, and pioneering new information models for implementing long lasting, repairable and reusable energy infrastructure products such as solar panels CircThread: bringing the circular consumer economy home.
As the response from Euroconsumers and its member organisations shows, we will take the lead at a national level through our member organisations and at the European level to alleviate the problems caused by badly functioning markets. We will also continue to set out a vision for fairer and more affordable energy market and get involved in the practical steps needed to transform behaviour and engagement. All of this will help to deliver a better energy future for consumers and the environment that is Approved by Tomorrow.
More details on petitions and campaigns:
Altroconsumo, Italy https://www.altroconsumo.it/azioni-collettive/petizione-energia
Deco Proteste, Portugal https://www.deco.proteste.pt/campanhas/bastam6/fechado