On Monday, 28 February 2022, the government met with electricity and natural gas suppliers to discuss the exceptional energy price situation and security of supply.
At a press conference in Senningen, Prime Minister Xavier Bettel, Minister for Energy Claude Turmes, Minister for Family Affairs and Integration Corinne Cahen and Minister of the Economy Franz Fayot presented a package of measures in the context of rising energy prices.
Approved by the Government Council on 28 February 2022, these new measures are aimed at households which have been particularly affected by the rise in energy prices.
After a first increase of the cost-of-living allowance on 1 January 2022 and considering the surge in energy prices, the government has decided to continue supporting the most vulnerable households. According to the Minister for Family Affairs and Integration Corinne Cahen "the energy subsidies are a targeted support for the most vulnerable households in our society".
The government also decided to introduce an exceptional state contribution to mitigate the exceptional rise in gas prices and to stabilise electricity prices. In addition, further measures will be decided at European level. Minister for Energy Claude Turmes points out: "The government is proposing a targeted and effective measure to help households currently facing exceptional gas price rises. In order to move away from dependence on fossil fuels in the long term, the government will also continue to develop measures for energy transition, including energy efficiency and renewable energy."
The Minister of the Economy Franz Fayot explains: "The current rise in energy prices is hitting households hard, but also businesses. Additional measures are therefore being analysed and developed to provide targeted assistance to those companies most affected, due to their activity or energy supply situation."
Further details on the new measures:
- 1. Energy subsidy for low-income households The government has decided to introduce an energy subsidy for low-income households: Households receiving the cost-of-living allowance (allocation vie chère, AVC) will receive a one-off subsidy of at least €200 and up to €400 depending on the household composition. This one-off subsidy can also be claimed by households that are not eligible for the cost-of-living allowance, but whose income is up to 25% higher than the income eligible for the cost-of-living allowance. Households currently entitled to the cost-of-living allowance will automatically receive it; applications refused under the normal regime will be reconsidered in accordance with the new regulations without the need to be reintroduced. All other households must apply by 30 September at the latest.
- 2. Electricity: Stabilisation of electricity prices The price of electricity will be stabilised, or even slightly reduced, for residential customers by increasing the state's contribution to the "compensation mechanism for renewable energy/cogeneration", which is used to finance the development of renewable energies and which is part of the electricity price.
- 3. Gas: Subsidy of network costs The price of natural gas for residential customers will be substantially reduced by the temporary coverage of network costs by the state. These network costs, which contribute to the financing of the gas networks, represent an important part of the final price of natural gas.
- 4. Accelerating the energy transition The government will strengthen financial support measures for energy renovation, the promotion of heating systems based on renewable energy, sustainable mobility and the installation of renewable energy in order to continue to help households in the energy transition. The full details of the measures will be presented in the coming weeks.
Press release by: Ministry of State/ Ministry of Energy and Spatial Planning / Ministry of Family Affairs, Integration and the Greater Region / Ministry of the Economy / Ministry of Foreign and European Affairs