Euroconsumers members aim to ease the pain for consumers as energy crisis continues
The energy situation for consumers has dramatically changed since our blog in January 2022. With the invasion of Ukraine by Russia on the 24th February, the idea that steep energy prices would be transitory was dispelled.
Russia is the largest exporter of gas and currently accounts for around 40% of Europe’s imports. When it cut off the gas supply to Poland and Bulgaria over their refusal to pay in roubles, it was an abrupt reminder of the risks of energy dependence. Everywhere energy prices are surging yet again, suggesting that energy supply and costs will remain precarious and high for the medium to longer term.
Taking action for consumers in energy crisis
The price of home heating, cooling and the costs of running a car has been a constant worry for consumers for the last 18 months. Now, the knock-on effect of rocketing energy costs on business premises and products is also being felt in people’s pockets leading to much uncertainty and difficult financial choices.
Euroconsumers’ organizations are watching developments closely and stepping up their activities to match the challenges faced by consumers. Our activities are strategically focused on: reducing prices, saving energy and shifting to a clean, green energy, circular economy. We’ll get there through lobbying for change at the political level and developing practical tools for consumers to help alleviate the immediate pressures.
Reducing prices for consumers
Practical schemes for reducing prices include collective purchasing schemes run by Altroconsumo in Italy, and those planned by Test Achats in Belgium for electricity and gas. OCU in Spain has already successfully run such schemes, acting as a trusted intermediary to group together consumers and negotiate better prices. Through Altroconsumo's scheme, consumers were able to save between €210 and €240 on gas and electricity per year.
However working within the confines of the current energy market will have a welcome but limited effect on the current pricing framework. Structural changes are required to ensure fairness to consumers and a redistribution of the burden of risks and volatility in prices. This starts with the way in which levies and taxes are presented to consumers.
All of our member organizations want to see an end to ‘energy bills as tax sheets’ which obscures the real price of energy. Test Achats/Test Aankoop, Altroconsumo, OCU and Deco Proteste have active petitions and campaigns to lower VAT on energy, or to suspend it temporarily to provide some relief whilst prices are so high, arguing that as energy is an essential service it should not be subject to higher levels of taxation. Greater use of targeted social tariffs and programmes to improve uptake are being called for to make no one is in fuel poverty.
Policy campaigns are also in place to evaluate how energy prices are being set, to simplify tariffs and to introduce some much needed clarity and transparency into energy companies' operations. Finally, the windfall profits from energy companies are attracting attention from governments, consumer bodies and regulators.
Saving energy through efficient products
Group purchasing to save money can also be extended to efficiency products and energy self-generation equipment, and Test Achats/Test Aankoop have a permanent group purchase deal for solar panels to bring the costs down for consumers. Altroconsumo also has collective purchase schemes and discounts on photovoltaic panels, heat pumps and efficient condensing boilers to make sure as many people as possible can benefit from these innovations. OCU's group purchase of solar panels saw consumers achieve an average saving of 10% on the installation, and they went on to save around €718 a year (based on a household of four people).
Making the best efficiency choices is tough for consumers, it could involve new and unfamiliar products at high prices and a plethora of options. To help tackle this demand side challenge, OCU and Deco are part of the EU Horizon 2020 Heating Appliances Retrofit Project (HARP) which is testing and developing the best ways to encourage consumers to install efficient home heat systems.
All our European members are key partners in ‘BELT’ which stands for ‘Boost Energy Label Take up’. This is an EU project that helps consumers identify the most energy-efficient domestic household product through a new EU energy label. The new label scraps the former A plus systems and recalibrates efficiency levels on a simple A-G scheme. Manufacturers will need to meet significantly higher standards to get the A rating, thus incentivizing continual efficiency innovations.
Solar panels of course mark a major step in the generation of renewable energy on a micro scale. This will be a crucial addition to creating a long term clean energy mix that will transition us away from fossil fuels. OCU wants to see a much more concerted effort to shift consumers towards sustainable self-generation and consumption by eliminating barriers to sharing photovoltaic installations and optimizing the sale of surplus energy.
On a practical level, Euroconsumers members are involved in schemes like CircThread: bringing the circular consumer economy home which are pioneering new information models for implementing long lasting, repairable and reusable energy infrastructure products like solar panels.
Ambitious energy changes needed at EU level
Despite the best efforts of consumers in making use of alternative power sources, buying schemes and efficient products, they cannot do this alone.
The energy crisis goes well beyond this severe spike in prices. A complete reformulation of energy supply, production and use is urgently required in order to shift towards a green economy that will sustain us for centuries to come.
There is an urgent need for an EU level guarantee of secure supply and price stability, aligned with the transition to a green energy future. Large scale structural help is required, with a supportive policy framework and the right funding to make the green transition a possibility for all consumers, regardless of their circumstances.
REPowerEU: an action plan for European energy independence
The release of the REPowerEU action plan for European energy independence on the 18th May 2022 will be crucial in setting out the next steps for practical and strategic help for consumers. Through the plan, the Commission has already put forward proposals which will make Europe independent from Russian fossil fuels well in advance of the previous 2030 target date. The first wave of action is firmly focused on gas supply, and the plan also outlines a series of measures to respond to rising energy prices in Europe and to replenish gas stocks for next winter.
More measures are set to be announced to end EU energy dependence on Russia and reduce EU demand for Russian gas by two thirds before the end of the year. REPowerEU will also look at speeding up the roll-out of renewable gasses, replacing gas in heating and power generation and redesigning the current marginal pricing model in the electricity market.
Future support in an uncertain energy future
Many questions remain over the implications of recent events, but our members' continue to prepare for the impact of the energy crunch on consumers’ everyday lives.
Our members will keep lobbying for the rapid growth of impending government schemes and rapidly turning around the relevant information to consumers on how to qualify for subsidies or new systems. They will also harness the consumers’ voice through ongoing petitions to governments on pricing and tax.
They are also considering future plans to launch group purchasing schemes in a wider range of efficiency products like heat pumps, and will continue to provide practical advice on how to improve efficiency on a low budget and keep people up to date with the role of developments like energy communities and smart meters and in the energy transition.
All of these coordinated actions from top level policy change at the EU level, down to small community generation are critical for creating an energy independent region that can speed up its transition to a green future that is Approved by Tomorrow.