What are other countries doing to mitigate the energy crisis?

On the 17 October, the chancellor, Jeremy Hunt, announced a reversal of most measures contained in the September mini budget, including major changes to income tax rates and cuts to corporation tax.

The Energy Price Guarantee was reduced in scope. The scheme was originally in place for two years, but it’s now running for six months (with a review taking place to determine the level of support that will be in place beyond April 2023).

The high price of energy means that the UK Government is still facing steep costs. Despite this, we’re yet to see a major government focus to drive down energy use. This would have a clear benefit.

Recent analysis from the Social Market Foundation shows that if UK energy consumption fell by 20%-30% by adopting a German-style energy reduction drive, the average household would save around £260-£400 a year. This would also save the government up to £9.3bn on the cost of the Energy Price Guarantee.  

While governments around the world are putting a lot of funding into tackling this energy crisis, the different levels of exposure to gas prices means that the stakes aren’t equal.

For example, 55% of Germany’s natural gas imports in 2021 came from Russia, so the country would be drastically impacted by Russian gas being shut-off. In countries such as Finland, where gas makes up a much smaller portion of the overall energy mix (relying on nuclear and hydropower), the impact wouldn’t be as great.

This is something to consider when looking at the activities of other nations. Some are focusing on reducing overall energy demand and increasing energy security, while others are concentrating on specifically cutting ties with Russian imports.

Gas

As part of its response to Russia’s invasion of Ukraine and to sure up supplies for this winter, the EU set a target to refill gas storage sites to 80% by 1 November 2022. The EU met this target in early August. Storage has been built up by curbing demand, switching from using gas to coal and increasing imports of liquefied natural gas (LNG).

As a further component of its response, the European Commission presented the proposal for the regulation “Save gas for a safe winter”. The Council of the EU adopted a revised regulation in August. The council agreed to a voluntary reduction of 15% in gas consumption across EU states (compared to its average consumption in the past five years) from August 2022 to March 2023. This will be mandatory in the event of an alert.

We can therefore see a two-pronged approach from EU member states: to sure up supply and to reduce demand.

Electricity

In September, the European Commission announced two demand reduction targets for electricity for all member states. EU energy ministers agreed to a voluntary overall reduction target of 10% of gross electricity consumption. They also agreed to a mandatory goal to reduce electricity by 5% at peak consumption times ahead of winter. According to the commission, reducing power demand at peak times would lead to a saving of 1.2 billion cubic metres of fossil gas over the winter.

Spain

In August, Spain (which doesn’t depend on Russian gas) imposed temperature limits in public and commercial spaces to save energy. These spaces, including train stations and airports, cannot be cooled to below 27 degrees in summer or heated to more than 19 degrees in winter.

France has an ambitious plan to cut its energy use by 10% in the next two years. It has announced an energy sobriety plan — called sobriété énergétique — to find solutions sector by sector to reduce its reliance on fossil fuels and reduce consumption. This plan is part of the wider French energy strategy based on consuming less and consuming differently. The country is accelerating the development of renewable energies and reviving its nuclear industry.

As part of this strategy, France has developed a communication campaign named “Chaque geste compte”, or “Every gesture counts”. This campaign covers the simple and effective everyday changes people can make to reduce how much energy they use.

Croatia has largely opted for information and awareness measures to save energy in the short-term. This is based on the European Commission’s “Save gas for a safe winter” scheme, as mentioned above.

The Croatian Government’s guidelines recommend that the maximum indoor temperature during the winter months should be 21 degrees, and the cooling temperature in summer should be no lower than 25 degrees.

Further guidelines include efficient use of household appliances during off-peak times, using more LED lighting and encouraging people to use public transport. Retrofitting buildings and houses for energy efficiency has been communicated as part of a long-term measure.

As the European country most reliant on Russian gas in recent years, Germany will use notably less gas for producing electricity. Instead, it plans to replace it with energy generated by coal power plants.

In 2021, Russia accounted for 55% of Germany’s gas imports, and this dropped to around 26% by the end of June this year. To further these plans to cut ties, there will also be incentives for companies that reduce gas consumption in “bottleneck situations” where demand is very high.

To reduce demand, around 200 sites in Berlin will no longer be lit at night. This includes the Reichstag parliament building, Berlin City Hall, the Jewish Museum Berlin, opera houses and the Victory Column. All public buildings in Munich will run only cold showers in their aim to cut energy use by 15%.

Like Germany, Greece is also highly dependent on Russian gas and has announced measures to reduce consumption. The government has announced a $640m programme to renew windows along with heating and cooling systems in state-owned buildings as part of a major energy upgrade.

Greece has largely altered the governance of its public administration in ways that have direct energy saving impacts. This includes switching lights and devices off in public buildings after hours, as well as turning off heating in empty spaces, such as corridors, foyers and stairwells. Reducing consumption has also become mandatory in all public services.

The Netherlands has lifted production restrictions on coal-fired power stations. The government also has an energy saving campaign. Its toolkit “Zet ook de knop om”, or “Turn the switch”, includes a tool for SMEs. This tool gives SMEs advice on energy saving and sustainability measures they can take and any subsidies that are available to them.

An example from slightly further afield, California illustrates an opportunity for energy saving, though admittedly in crisis mode. In September, the state used its emergency alert system in a way not seen before, and millions of Californians received a text alert:

“Extreme heat is straining the state energy grid. Power interruptions may occur unless you take action. Turn off or reduce nonessential power if health allows, now until 9pm.”

This text helped to avoid rolling blackouts during the heatwaves seen this summer. California’s power grid operator said that after the text was sent, it saw a significant load reduction at around 2,000 megawatts within 30 minutes. This allowed the system operator to restore the system, which was already under increased pressure because draught had reduced the amount of energy supplied by hydropower.

The success of using a text message to alert residents and ask them to reduce their energy demand shows how energy systems could be managed in the future, especially during extreme weather events caused by climate change.

There’s value in looking to other nations to see how the UK might reduce its gas demand, increase energy security and reduce household bills.

These examples show there are a wide range of options available and there’s no need to wait to take action. It’s time the UK started having these conversations too.