IN-DEPTH: Energy efficiency to tackle energy poverty – The E.U. takes a small step

At the end of November 2016, the European Commission released a “winter package” of measures to boost clean energy transition and keep the European Union’s economy competitive. The “Clean Energy for All Europeans” aims at prioritizing energy efficiency measures, achieving global leadership in renewables and protecting consumers. In particular, the EU Commission puts great emphasis on the benefits that improved action on energy efficiency can lead to. It proposes a binding EU-wide target of 30% by 2030 to replace the non-binding 27% of energy efficiency currently included in the 2030 climate framework and a revision of the existing regulations. Vulnerable consumers are claimed to be at the center of the package that is expected to deliver immediate and tangible effects in terms of growth, jobs, competitiveness and energy security. Social imbalances in energy access are also among the major objectives that the EC wants to tackle through a better performance of buildings. Specifically, the Commission’s proposals ask Member States to prioritize households affected by energy poverty in their energy efficiency measures, to take them into account in their longterm building renovation and to monitor and report on energy poverty in their country. According to the proposal’s figures, between 515,000 and 3.2 million Europeans would be lifted out from energy poverty by these measures.

This attention to energy poverty reflects an increased awareness by the EU institutions toward a problem that has been often out of sight. In the European context, energy (or fuel) poverty is, usually, referred to as the overall inability of households to meet energy service needs in the home at an affordable cost. It is widely recognized that the issue arises from the interaction of three major components: i) low household income, ii) high energy prices, and iii) characteristics of the dwelling. However, energy poverty action across Europe is still at a nascent stage, with the exception of the United Kingdom (UK) where in the 1990s it arouse as a political challenge. Although it has been occasionally mentioned in some recent regulations, there is not an officially definition of energy poverty in the EU. The complexity of the problem along with the lack of agreement on a definition led to a gap in knowledge on the extent of energy poverty at the EU level, exacerbated also by the limitations on available data.

However, recent studies have attempted to estimate the prevalence of energy poverty across Europe through the use of proxy indicators or composite indexes representative of the main drivers of energy poverty: i) having arrears in accounts, ii) living in dwellings with leakages and damp walls, and iii) the ability to keep the home adequately warm. A recent and comprehensive effort underlines that in 2012 10.8% of the EU-28 population, corresponding to 54 million citizens, was unable to adequately warm their home, and the number increased by 17.4% since 2009. Also, 15% of the Europeans reported poor efficiency levels of their dwelling whereas 9.7% were struggling to pay energy bills (see Table).

Energy poverty indicators for EU-28 in 2012. Pye S., Dobbins A., Baffert C., Brajković J., Grgurev I., De Miglio R., Deane P., (2015), Energy poverty and vulnerable consumers in the energy sector across the EU: analysis of policies and measures.

 

Average share of poor and fuel poor people (proxy indicators) in the EU28 for 2009 and 2012. Bouzarovski, S., Petrova, S., Salarmanov, R. (2012), Energy poverty policies in the EU: a critical perspective.

 

The highest shares of energy poverty are found in Eastern and Southern Member States: Bulgaria, Hungary, Greece, Latvia, and Slovenia are the most affected, with very high shares of people at risk of poverty in at least two out of the three indicators. Interestingly, also some of the Mediterranean countries, with milder climate, report a high share of population struggling in keeping home warm, such as Portugal, Cyprus, Greece, Malta and Italy. Among the causes, the recent economic downturn experienced by most of these countries is likely to have further shrunk their citizens’ spending on heating.

Against this background, the synergies between energy poverty alleviation and climate change mitigation appear clearly. This becomes even more relevant when considering that the building sector has the largest untapped cost-effective energy saving potential in the long-term. Finally, benefits in terms of health and social inclusion will also emerge from addressing inefficient and poor living conditions.

 

This article was first published on ICCG’s International Climate Policy Magazine n. 44.

(Image: Spanish quarter, Naples, Italy. Photo credit: José Luiz Bernardes Ribeiro/ Wikimedia Commons.)