(L-R) Franz Fayot, Minister of the Economy; Claude Turmes, Minister of Energy; Xavier Bettel, Prime Minister, Minister of State; Corinne Cahen, Minister of Family and Integration;
Credit: SIP / Jean-Christophe Verhaegen
On Monday 28 February 2022, Luxembourg government brought together electricity and natural gas suppliers to discuss the exceptional situation of energy prices and security of supply, and later at a press conference, presented a package of measures to mitigate the impact of rising energy prices.
The measures were presented by Luxembourg's Prime Minister Xavier Bettel, the Minister for Energy, Claude Turmes, the Minister of Family and Integration, Corinne Cahen and the Minister of the Economy, Franz Fayot.
Approved by the Government Council on the same day, these new measures are aimed at households, which have been greatly affected by the rise in energy prices.
After an initial increase in 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 of Family and Integration, Corinne Cahen, "the energy bonus constitutes targeted support for the most vulnerable households in our society".
The government has also decided to set up an exceptional contribution from the State, in order to mitigate the exceptional rise in gas prices and to stabilise electricity prices. Additional measures will be decided at European level.
Energy Minister Claude Turmes underlined: “The government is proposing a targeted and effective measure to help households currently facing exceptional gas price increases. In order to get out of dependence on fossil fuels in the long term, the government will also continue to develop measures in favor of the energy transition, in particular energy efficiency and renewable energies".
The Minister of the Economy, Franz Fayot, specified: “The current rise in energy prices is having a severe impact on households, but also on businesses. Additional measures are therefore being analysed and developed in order to provide targeted assistance to the companies most impacted by their activity or by their energy supply situation".
The new measures:
- Energy bonus for low-income households: The government has decided to introduce an energy bonus for low-income households: households benefiting from the cost-of-living allowance (l'allocation vie chère, AVC) will thus receive a single bonus of minimum €200 and maximum €400 depending on the composition of the household. This single premium may also be requested by households that are not eligible for AVC, but whose income is up to 25% higher than the eligible income for AVC. Households benefiting from the AVC will automatically benefit from it; applications refused under the normal regime will be re-examined in accordance with the new provisions without their need to be reintroduced. All other households must submit their application by 30 September 2022 at the latest.
- 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 "contribution to the renewable/cogeneration compensation mechanism", which is used to finance the development of renewable energies, in the composition of the price of electricity.
- Subsidy of gas network costs: The price of natural gas for residential customers will be substantially reduced by the temporary assumption by the State of network costs. These network costs, which contribute to the financing of the gas networks, represent a significant part of the final price of natural gas.
- Acceleration of the energy transition: The government will strengthen the financial aid measures for energy renovation, the promotion of heating systems based on renewable energies, sustainable mobility and the installation of renewable energies in order to continue to help households in the energy transition. Detailed measures will be presented in the coming weeks.
