Housing rehabilitation and improved efficiency must be priority structural measures to eradicate energy poverty

The study ‘Energy Poverty in Europe: a comparative analysis’, which the Naturgy Foundation is presenting today, calls for the implementation of structural measures with a medium- and long-term impact that involve improved energy efficiency, renewable energies and changes to consumers’ energy habits, with the aim of improving polices to combat energy poverty.

The report, prepared by the Chair of Energy Sustainability at IEB-University of Barcelona, compares policies in Germany, France, the United Kingdom, Portugal and Spain, and proposes actions to make progress in eradicating this problem, which has worsened due to the consequences of the pandemic.

The analysis of these five countries shows that, although the majority acknowledge the problem of energy poverty and the need to overcome it to ensure a fair and inclusive energy transition, not all of them address this socioeconomic reality in the same way. “In Europe there are 50 million households in a situation of energy poverty, and there could be a further 4 million that do not provide information on their situation”, explained Professor María Teresa Costa, director of the study.

In 2018 (the last year that the five countries reported data), 9.1% of Spanish homes were not at an appropriate temperature (the EU average is 7.3%) and 7.2% were late paying their bills (the EU average is 6.6%).

In Portugal, 19.4% of homes were not at an appropriate temperature and 4.5% were late paying their bills; in France the figures were 5% and 6.4%, respectively; in the United Kingdom both were at 5.4%; and Germany has the lowest figures at 2.7% and 3%, respectively.

The monitoring of the five countries included in the study shows that the problem is also spread unequally within their national borders. With the exception of Portugal where energy poverty is distributed more evenly, areas with a higher number of homes in a situation of energy vulnerability can be clearly identified in Spain, France, the United Kingdom and Germany.

According to the recent update of the hidden poverty indicator in Spain’s National Strategy to tackle Energy Poverty with 2019 data, the highest rate of energy poverty in our country during the study period was found in the Canary Islands, at 31.6%. By contrast, La Rioja recorded the lowest rate at 3.6%.

Proposals to make policies more effective

According to Costa, we should encourage people to meet the highest energy efficiency standards and promote self-supply, while also “ensuring that actions are not yet another financial burden on vulnerable homes”. Therefore, she believes that “viable funding mechanisms should be established, which are adapted to the circumstances of vulnerable households”.

The study also advocates “greater coordination and interaction between public, private and social entities”, promoting “the use of IT tools to facilitate decision-making in the detection of energy poverty”.

According to Costa, “we must encourage access to harmonised, relevant, systematised and up-to-date information, and tap into the potential of energy consumption measurement technology as an information base”.

In this respect, the document considers that we must “increase the participation of local social actors in the measures” that are adopted, as well as “minimise general actions and prioritise those that are best suited to the socioeconomic reality and type of housing of vulnerable households”.

Another of the report’s proposals to be considered in energy poverty policies is reducing the complexity of administrative processes.

Energy poverty in NECPs

While the European Green Deal establishes that “The risk of energy poverty must be addressed for households”, the five national energy and climate plans (NECPs) analysed respond to this problem differently.

In the case of Spain, its NECP is based on the National Strategy to tackle Energy Poverty and highlights “the need for the Spanish energy market to be focused on consumers and their protection by implementing aid measures that are not just financial, but also promote self-supply and energy efficiency in buildings with vulnerable households”.

This last measure is in line with one of the EU’s main recommendations — energy rehabilitation — which, on top of reducing bills, also helps combat climate change.

In the analysis of the energy poverty policies applied in Spain, the study commends the immediate assistance for bill payment through the subsidised electricity and heating rate, and the implementation of measures with a medium- and long-term impact such as those related to energy rehabilitation.

Spain and the United Kingdom are the only two countries out of the five analysed that explicitly acknowledge the problem of vulnerability in their NECPs by defining energy poverty, a national strategy and reduction objectives.

In the case of France, although it acknowledges this problem, it does not have a complete strategy or energy poverty reduction objectives. Nonetheless, this country is the only one with a national energy poverty observatory.

Germany does not define any of these specific lines of action as it addresses this problem through an integral approach focused on poverty in general.

Portugal lags behind in this area as, although it acknowledges the problem, it does not have a clear definition or strategy to address it (planned for next year), nor has it set objectives to reduce the number of cases.

Energy poverty and the pandemic

The study also presents the main policies implemented in response to the COVID-19 pandemic: a ban on disconnection, personalised payments and subsidies or discounts. Only Spain and Portugal have implemented all four measures.

For instance, in Spain the government reformed the subsidised electricity rate to extend coverage to those affected by COVID-19 and a new condition for qualification as a vulnerable consumer has been created.

With regard to the EU’s pandemic recovery fund, the report recalls the role of rehabilitation in improving the energy efficiency of buildings and the importance of considering its impact on energy poverty as one of the main drivers of a green recovery.

Naturgy Foundation

The Naturgy Foundation carries out all of the social programmes linked to Naturgy’s Vulnerability Plan, the first of this kind to be developed by a Spanish energy company. The plan aims to strengthen and systematise the management of vulnerable customers, as well as to strengthen collaboration with Third Sector entities and communication with social services.

The foundation develops a variety of social initiatives, including the Energy Rehabilitation Solidarity Fund to make vulnerable households more efficient, the Energy School to improve energy habits and bill management, and volunteering to advise families on energy-related matters.

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