Forget ironing, turn off the oven and take a shower at work – Europeans are trying to cut down on energy use, but their electricity bills are getting higher and higher.
As wholesale gas and electricity prices have soared, millions of people in Europe now spend a very large proportion of their income on energy.
In the eastern English town of Grimsby, Philip Keatley didn’t even turn on the fan in his home when Britain was melting in the heat this summer. A look at his bank account explains why.
“The cost of living has increased and yet we have to survive with the money we had when there was no crisis… Either I’ll be warm or I’ll eat,” he explained.
Citizens in other European countries are also voluntarily trying to economize, to reduce consumption as gas, electricity and fuel prices have soared due to the war in Ukraine, sanctions in Russia and the aftermath of the Covid-19 pandemic. The price of gas in Europe has increased by 550% in 12 months. The cost of energy for British consumers will rise by 80% from October, regulator Ofgem announced today. On average households will pay £3,549 (around €4,200) per year in bills.
European governments rushed to support consumers, but the evidence shows that this aid did not make a difference.
This winter, Britons will spend an average of 10% of their income on gas, electricity and other fuels to heat and get around (mostly oil and diesel). The figure is double that of 2021, according to Carbon Brief calculations based on official data. This means that the current energy crisis is more severe than those of the 1970s and 80s. The oil embargo of oil-producing countries and the Iranian revolution of 1979 caused blackouts and long lines at gas stations in the West. At the height of that crisis, in 1982, Britons were spending 9.3% of their income on energy bills.
British charity National Energy Action (NEA) estimates that 8.9 million UK households will face the specter of energy poverty after October – up from 4.5 million last year.
Energy poverty is defined as the condition of a household that has a low income and spends 10% or more of that income to meet its energy needs, according to NEA and other organizations. The term is also used informally in other European countries.
“The rise in energy bills we are seeing today is unprecedented,” said Peter Smith, NEA’s policy director.
Food or heating?
Keatley lost his job in April and is now living on an allowance of £600 (around €710) a month. He gives half the money for rent and with the rest covers his basic needs. He now eats once a day but, although he has kept his energy consumption to a minimum, 15% of his money goes to bills.
A third of UK households have already reduced their use of the stove and oven, according to a survey by the Financial Fairness Trust. One in three have cut back on their showers and half have changed the temperature on their home thermostat. “People are doing a lot to keep bills down, but they’re going up anyway. That’s why we want more government intervention,” said Jamie Evans, a researcher at the University of Bristol who took part in the research.
Dawn White, who suffers from kidney failure, said she fears the skyrocketing costs will mean she will no longer be able to receive life-saving treatment. “Without the (dialysis) machine five times a week, for 20 hours, I will die,” said the 59-year-old, who lives in southeast England.
By early 2022 the price of gas for households in most major European economies had surpassed that of previous major crises in the 1970s, 1980s and 2000s, according to the International Energy Agency’s (IEA) inflation-adjusted index.
Europe appears to be in a more difficult position than other developed economies. ILO figures show that while US households have paid higher prices for natural gas on average over the past 40 years, this year the price families in Europe are being asked to pay has surpassed that in the US.
Bathroom at work
In Turkey, the price of natural gas more than doubled in July (compared to last year) while the price of electricity rose by 67% within a year, according to data from the Institute of Statistics.
Seyda Bal, 27, said she has limited using her oven to three times a month to save energy. Her husband goes to work by bus, so as not to buy gas, although it takes three times as long to make the trip.
In the European Union, households in Italy and Germany have been hit hardest by rising prices, according to the ILO. Energy bills (mainly electricity and gas) for the average Italian family rose to 5% of total household spending in July, up from 3.5% in 2019, according to data from economic research firm Prometeia. That 5% in July is the highest rate since 1995, according to OECD data.
In Germany, Europe’s largest economy, household gas bills more than doubled in July compared to 2021, data from price comparison portal Check24 shows.
Ercan Erden, 58, lives in Nida, northeast of Frankfurt, and works as a machine operator at a water bottling plant. “Now, I shower at work after school and shave at work,” he said.
Source: AMPE
Source: Capital
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