How are European countries dealing with the energy bills crisis? UK plans on price caps compared to EU nations

Millions of households across the UK are currently struggling to afford sky-high energy bills, rapidly increasing fuel prices, and even everyday essentials as the cost of living crisis continues to spiral.

Experts have warned that the crisis unfortunately shows no signs of slowing, with the most recent forecast from energy consultancy Cornwall Insight predicting the average household’s bills will hit more than £4,200 come January.

The UK Government has responded to the crisis by introducing a variety of measures to help struggling families - these range from one-off bill discounts to increased funding for council household packages.

But of course, the UK is not the only country struggling with skyrocketing energy prices - following its invasion of Ukraine, Russia reduced energy supplies to the whole of Europe, meaning governments across the continent have been forced to respond.

With the British Government - currently in the middle of a transition to a new prime minister - facing pressure to do more to help households, particularly vulnerable ones, NationalWorld has looked at how other countries have responded - and how the UK’s support compares so far.

Here’s what we know.

United Kingdom

In May, then-Chancellor Rishi Sunak unveiled a £15 billion support package to help people with the cost of living crisis.

He said at the time that he had loosened the public purse strings because of the “acute distress” that high inflation was causing people across the UK.

This package included a one-off £400 energy bill discount, which will be paid to all UK households in October.

You do not have to do anything to receive these payments, as they will be automatically applied by your energy supplier.

The Government has also promised:

• A £650 payment to support low-income households, which will support more than eight million households who are paid benefits

• A £300 payment to pensioner households, which will be paid out across November and December

• £150 payment to people on disability benefits, which will be added to the usual benefits payment

A further £500 million will also be given to councils in England as part of the existing household support fund - with its time limit extended to March 2023.

The Netherlands

Like the UK, the Netherlands is highly reliant on gas for electricity generation and home heating. Before the war in Ukraine, the country imported as much as 15% of its gas from Russia.

One of the Dutch Government’s main responses has been to lift a cap on energy production by coal power plants, which is predicted to save 2 billion cubic metres of gas use per year.

This will mean the country’s environmental plans will take a hit, but Dutch Energy Minister Rob Jetten has claimed the Netherlands will still reach its 2030 climate goals.

He added at a news conference in The Hague: “With these measures, less money will flow to Putin’s war chest.”

The Government has also announced an additional €3.2 billion package of measures (which took effect from 1 January 2022 and will run for a year), which includes:

• cutting energy taxes to save households an average of €400 (£332) a year
• cutting duty on petrol and diesel by 21%
• €150 million to boost home insulation
• €500 million to compensate small firms in the form of lower energy taxes
• a one-off energy allowance of €800 to vulnerable households

France

In France, citizens are also receiving a one-off payment to help with energy bills - but at just €100 this is considerably lower than what’s been offered in the UK.

However, the French Government is instead looking to solve the issue at the source by forcing state-owned energy provider EDF to limit electricity price rises to 4% for an entire year - instead of the predicted 45%.

The move is expected to cost EDF €8.4 billion.

France’s domestic tax on final electricity consumption has also been cut from €22.50 per megawatt hour to just €1 per megawatt hour for all households.

Spain

The Spanish Government was one of the first in Europe to take action against the sharp rise in energy bills last year, when it agreed in September 2021 to remove taxes from home energy bills until May 2022.

Instead, the money was paid by enforcing a windfall tax on utility companies that were poised to profit from soaring energy market prices.

More recently, the European Union has allowed Spain (and Portugal) to use billions of euros in state aid to help ease the burden of spiralling electricity bills.

The €8.4 billion in aid — €6.3 billion for Spain and €2.1 billion for Portugal — is intended to help to pay the fuel costs of electricity producers.

This means that Spain has capped gas prices for households all across the country.

Outside of energy bills, to help citizens with the cost of living crisis, Spain has announced free rail journeys from September until the end of the year.

The 100% rail discounts will apply to multi-trip ticket journeys on cercanías (commuter services) and media distancia, or medium-distance routes (less than 300km) - primarily aimed at season ticket holders who need to travel to work.

Portugal

As mentioned, Portugal has received the same grant from the EU as Spain.

The monetary aid means that the average electricity price will fall significantly to around €130 per megawatt hour on average over the year. This compares with €210 in the first quarter of 2022.

The reduction will benefit all consumers, with no exceptions, and will be in force for one year.

Prime Minister António Costa said Portugal and Spain had "come a long way … to shield businesses and families from the surge in prices."

Germany

In Germany, the Government has lowered energy bills by reducing the cost of supporting renewable energy projects.

This means the country has temporarily delayed the Green Deal and will reopen some coal-fired power plants in order to curb its heavy dependency on Russian gas.

Additionally, the German Government has also approved two relief packages for a total of €30 billion to help its citizens with rising energy prices this year. This includes:

• €300 as a one-off energy bill discount to all taxpayers
• €100 per child to families receiving child support 
• €200 one-off payment to people on benefits 
• €270-worth top-up for people on housing assistance

Italy

Italian households have always paid some of the highest energy bills in Europe, so the country was anticipating one of the steepest increases as a result of the global gas crisis.

To combat this, the Government pledged a €14 billion fuel subsidy and investment plan to keep energy bills in check and support families.

Workers earning €35,000 a year or less will also receive a €200 bonus.

In addition, the country has announced its intention to tax companies profiting from higher energy prices.

NationalWorld previously looked into which countries in Europe have the cheapest gas and electricity prices.