National governments will be encouraged to roll out “energy voucher” schemes for vulnerable households and introduce a temporary ban on power disconnections, as part of an EU plan to get to grips with the worsening energy crisis.
A draft of a European Commission plan being prepared by Brussels officials, seen by The Irish Times, expectedly cautions governments against sweeping measures and tax cuts that will be difficult to undo.
The EU plan, due to be announced on Wednesday, will press national capitals to make sure interventions to insulate people from the worst effects of soaring fuel and energy prices are time-limited in nature, and any possible impacts on the wider European economy and neighbouring states are assessed.
The commission’s plan backs “targeted income support schemes”, such as energy vouchers to help lower-income households with heating bills.
The powerful EU executive, which proposes laws, suggests governments introduce a temporary ban on energy companies cutting off power to people struggling to pay their bills during the crisis.
Other energy saving measures being pushed by Brussels include a suggestion that companies allow office-based employees to work from home at least one day a week, and for governments to nudge more commuters towards public transport by cutting fares.
It is understood state-aid restrictions will separately be relaxed to give EU states more cover to subsidise particularly energy intensive industries.
The commission’s plan recommends governments use the current crisis to make longer-term reforms to reduce their dependence on oil and gas. The document said changes could include more “financial incentives” to boost the uptake of electric vehicles, the installation of rooftop solar panels and the replacement of boilers with heat pumps.
The commission will set fresh targets for the reduction of Europe’s reliance on oil and gas over the coming years.
“With persisting and recurring pressure on fossil fuel imports and energy prices remaining volatile, immediate support is needed, but it must be targeted, timely and temporary,” the draft of the plan states.
Rather than row in behind several governments’ decisions to cut excise tax or VAT charged on petrol and diesel, the commission is expected to recommend “full or partial” reductions in tax on electricity, ideally targeted for more at-risk households.
The early draft of the plan says the “premature” shutting of nuclear power plants should be avoided, in order to hang on to a “reliable, low-cost” energy supply where it exists.
The shock to global energy markets from the effective closure of the Strait of Hormuz, a key shipping route bringing oil and gas from the Gulf, will pose further “challenges” to people when the impact starts to be felt in energy bills, the document warns.
The Brussels-based executive body flags possible advice EU states could pass on to people about conserving energy, “such as lowering heating and boiler temperatures, avoiding peak-hour use, turning off lights, closing doors, heating fewer rooms, blocking draughts”.
[ Electricity bills could increase by up to 9% with gas even higher, Minister saysOpens in new window ]
The commission will finalise the energy plan, dubbed “AccelerateEU”, over the coming days. The proposals will be discussed by Taoiseach Micheál Martin and the rest of the EU’s leaders at a two-day summit in Cyprus starting on Thursday, which will be dominated by the energy crisis and the Iran war fallout.
Iran’s foreign minister Abbas Araghchi initially signalled Tehran would allow shipping to restart through the Strait of Hormuz for the duration of a 10-day ceasefire in Lebanon.
However, over the weekend the Islamic Revolutionary Guard Corps, the hardline enforcer of Iran’s regime, warned tankers would be targeted as long as a separate US naval blockade of Iranian ships remained in effect.