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Boost consumer power in the energy market, urge MEPs

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26/05/2016
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Consumers should be given more power in the energy market, say MEPs in a resolution on a "new energy deal for energy consumers", voted on Thursday. They recommend collective buying, household power generation, better price comparison tools for all and making it easier to switch energy providers and tariffs. In a non-binding text, intended as an input to Energy Union legislation to be tabled by the EU Commission, MEPs also call for EU funds for energy efficiency to focus on energy poverty.

"Currently 50 million EU citizens are living in energy poverty. Many citizens are being kept on outdated energy contracts, also known as 'sleeping' contracts, which often require large termination fees when switching to a cheaper supplier. I want energy companies to provide consumers with information on the cheapest tariffs and scrap costly fees for changing suppliers. In 2016, throughout Europe, nobody should have to choose between heating, cooling or eating”, said rapporteur Theresa Griffin (S&D, UK). To encourage consumers to play an active role on the energy market, MEPs suggest:

• introducing new business models, such as collective purchasing schemes and innovative financial instruments to help consumers to generate more power themselves (“self-generation”) and use more of what they generate (“self-consumption”) in the most efficient way,
• reducing administrative barriers to new energy self-generation, shortening authorisation procedures and promoting community/cooperative energy schemes, and
• introducing favourable conditions for tenants and those living in apartment buildings to allow more use of self-generation and energy efficiency tools.

Clear pricing, comparable tariffs

MEPs also propose a series of ways to make energy prices more transparent:

• providing more frequent bills and easier to understand contracts,
• providing easy and timely access to the consumption data and related costs,
• enabling consumers to compare offers, even without internet access or skills, and ascertain whether they could save money by switching providers. Such comparison tools need to be independent, up-to-date and easy to understand, informing customers “in or alongside energy bills" of the most advantageous tariff for them, based on historic consumption patterns, and ensuring that they can change to that tariff, if they so wish, in the simplest way possible, without any termination fee or penalty,
• developing dynamic pricing, reflecting peak and off-peak periods of energy consumption, and transparent, comparable and clearly explained tariffs, and
• developing smart grids and appliances that automate energy demand management in response to price signals.

Tackle energy poverty

Energy poverty - cases in which people cannot heat or use electricity in their homes at affordable prices - should be tackled at its roots, say MEPs, who call for EU funds for energy efficiency and support for self-generation to focus better on energy-poor, low-income consumers. “Well-targeted social tariffs are vital for low-income, vulnerable citizens, and should therefore be promoted", they add, stipulating "that any such social tariffs should be fully transparent."

Next steps

Commission Vice-President Maroš Šefčovič announced in the debate on Wednesday evening that the Commission would present legislative proposals in September on energy efficiency and market design, followed by a legislative proposal on renewable energy, a report on energy prices, and proposals in 2018 for an energy poverty observatory.

Further information

Adopted text (2015/2323(INI)) will soon be available here (26.05.2016)Video recording of debate (click on 25.05.2016)EbS+Audiovisual material for professionalsEP Research Briefing: A new deal for energy consumers (Jan 2016)EP study: how to end energy poverty? (2015)Profile of the rapporteur - Theresa Griffin (S&D, UK)