In July this year, the European Commission presented its New Deal for Energy Consumers. The New Deal is part of the European Commission’s agenda to promote the European Energy Union. It envisages an Energy Union where consumers take ownership of the energy transition, benefit from new technologies to reduce energy bills, actively participate in the market and where vulnerable consumers are protected.
In order to inform future policy initiatives in this regard, the European Commission funded several studies to identify underlying problems for consumers in current energy markets. These studies examine the functioning of retail energy markets, consumer vulnerability and energy poverty as well as price comparison tools. The key insights from these studies are:
- A lack of competition persists in most Member States; even in liberalized energy markets prices remain high and generally consumers do not switch suppliers even though 31% reported about problems with their energy company during the last three years.
- More consumers experience energy poverty and vulnerability due to rising taxes, network charges and other unavoidable costs, which lead to higher energy bills and thus affordability issues; also, consumers often pay more than they should for their energy even with efforts to consume less energy or possibilities to switch.
- Energy-efficient behavior is hardly encouraged in current markets, since many consumers are unaware of available choices and actions to reduce energy consumption and thereby forgo potential savings.
- Moreover, regulatory barriers hinder consumers from becoming active market participants, for example by generating their own energy.
These insights provide important resources and evidence on how to improve energy markets and design future policy initiatives towards an European Energy Union, which better engages and supports energy consumers in the EU.
Source: European Commission