EU member states took 439 energy crisis measures, spanning from July 2021 to February 2023, aimed to balance short-term consumer affordability with long-term energy transition and market integration goals, an EU agency has said in a recently released inventory.
According to the inventory, every member state implemented emergency support measures to address the energy crisis, with the combined value of these measures amounting to approximately €646bn.
Luxembourg allocated €2.5bn, representing 3.4% of GDP.
Affordability and supply security
According to ACER’s analysis, published on Friday 14 July 2023, approximately one-third of these measures focused on broader security of supply objectives, while the remaining two-thirds aimed to enhance affordability for end-consumers.
Nearly half of the measures directly supported final consumers, with half of those targeting security of supply goals focusing on energy efficiency and renewable generation.
Efforts to replace gas in heating and electricity production were observed.
Additionally, while 40% of the measures addressing affordability primarily targeted households, only a fraction specifically aimed at vulnerable consumers.
Support for consumers took the form of income support in 60% of the measures, such as one-off cash payments, while the remainder involved discounts on energy bills.
Notably, Luxembourg implemented 20 out of the 439 measures documented.
The inventory highlighted that measures reducing energy bills positively impacted short-term affordability for end consumers.
Noteworthy price changes for households were observed in Romania, Czechia and Denmark, while Luxembourg, Portugal, Austria, Germany, Malta and the Netherlands witnessed either decreases or the lowest price increases.
Short-term vs long-term effects
The report found that during the crisis, member states responded by implementing measures to reduce natural gas usage, improve energy efficiency and enhance risk preparedness.
However, some of these emergency measures conflicted with long-term energy transition and market integration goals, emphasising the need for a balance between short-term efficiency and long-term investment stability.
Energy transition and market integration
While certain measures targeted energy transition and market integration, their overall impact was found to be neutral or potentially negative.
Conflicting measures, such as shielding consumers from peak prices, were identified, which discouraged efficient consumption and jeopardised security of supply.
Measures aimed at supporting end consumers, whether through direct assistance or market interventions, have budgetary implications.
In 2022, governments employed costly strategies such as allocating funds from national budgets and granting tax exemptions to shield consumers from high prices. However, it is important for emergency measures to maintain incentives for energy savings, be of a temporary nature, and only remain in effect for as long as necessary without exceeding that duration, considering their financial impact and potential side effects.
During a crisis, ACER realises that it may be necessary to temporarily suspend certain long-term goals in order to accommodate short-term solutions. However, these solutions should minimise negative consequences.
Energy savings and risk preparedness have proven to be crucial in crisis management, particularly in ensuring a secure energy supply.
Energy-saving campaigns, coupled with transparent communication with consumers and long-term investments in efficient energy consumption, offer benefits in both the short and long term.
Prioritising energy savings and risk preparedness as no-regret options justifies their emphasis, with additional measures considered as necessary complements.
An interactive dashboard of the measures is available here.