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ACM: Fair Competition is No Guarantee for Affordable Energy for Everyone

 |  April 11, 2024

By: ACM Blogs (Authority for Consumers and Markets)

The Netherlands Authority for Consumers and Markets (ACM) ensures that businesses in the energy market comply with regulations. This market operates on principles of supply and demand, setting prices accordingly. Given the country’s significant reliance on imported natural gas for energy, sudden supply disruptions could lead to steep price increases, disproportionately impacting vulnerable households. ACM highlights these concerns in its report, “Policy options for addressing energy poverty in vulnerable households.”

In said report, ACM presents three strategies for safeguarding vulnerable consumers from excessive energy costs: implementing a general purchasing-power policy, introducing a social tariff, and promoting sustainability in housing.

A general purchasing-power policy involves governmental manipulation of taxes and subsidies to bolster household incomes, ensuring they can cover essential expenses. A social tariff mandates energy suppliers to offer a maximum rate to a defined group of vulnerable consumers, with the government compensating suppliers accordingly. Additionally, initiatives to enhance housing sustainability aim to lower energy consumption, consequently reducing energy bills. While improving home efficiency is beneficial, it’s not a complete substitute for purchasing-power policies or social tariffs. Home insulation projects are time-intensive, and even after implementation, energy costs may remain high…