Eurelectric delivers blueprint to cut high electricity bills

With energy costs making up just over half the average electricity bill (56%) and the rest split between network tariffs (18%), taxes and levies (15%) and carbon costs (11%), each of these areas have potential for adjustments by the relevant responsible party, Eurelectric reports in a new position paper. 

Beginning with taxes and levies, these are a member state responsibility, with suggested options including lowering the VAT, shifting fiscal burdens onto fossil fuels to incentivise electrification and exempting vulnerable consumers.  

Removing non-energy-related levies and cross subsidies would also have a direct impact on bills. 

Network tariffs are a national regulatory authority responsibility and regulators could incentivise consumers to optimise capacity use and shift demand away from peak periods and also encourage flexibility. 

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The carbon cost component emerges from the European Commission and its governance of the ETS. The proposed €30 billion ETS investment booster could provide relief to industrial consumers. 

A targeted adjustment of the market stability reserve and related parameters also would help industry while preserving the ETS as a credible investment signal and more efficient use of ETS revenues (over €43 billion raised last year alone) is also critical to accelerate decarbonisation and industrial transformation. 

Last but not least are the energy costs themselves and Eurelectric advises against capping or subsidising gas prices, as implemented in Iberia in 2022, stating these to be highly distortive to the internal market and ultimately delivering minimal benefit to consumers. 

Instead, better use could be made of targeted, temporary and non distortive state aid, such as the industrial price relief proposed in the clean industrial state aid framework (CISAF), alongside unlocking demand side flexibility. 

Price relief

As an example in practice, the European Commission on 15 April 2026 approved state aid schemes under the CISAF to provide temporary electricity price relief over the next three years for energy intensive companies with a budget of €334 million in Bulgaria , €3.8 billion in Germany and €90 million in Slovenia. 

Beyond the immediate fixes proposed by Eurelectric above structural solutions include greater digitalisation from network operators that could improve asset management and further incentives for the necessary investments in electrification and cost effective emissions reductions to reduce exposure to carbon costs. 

Other proposals are to incentivise long term contracts such as PPAs, to streamline the integration of homegrown clean electricity and to incentivise energy efficiency to ensure that consumers pay no more for their electricity than they need. 

The European Commission’s expected Accelerate EU plan should provide direction on reducing energy costs and short-term price volatility, while preserving long-term investment signals and a level playing field across the internal market.