ENERGY POVERTY: WHAT ARE THE FOUNDATIONS FOR A GREEN AND SOCIAL PACT FOR EUROPE?
The publication is an overview of national tools for combating energy poverty across Europe and an analysis of the EU approach. It elaborates on prioritized “Green Deal” which should support the poorest households and respond to the challenges of energy poverty. The publication emphasizes that one of the basic weaknesses within the European context remains that Europe still lacks a common definition of energy poverty.
The Energy Poverty Observatory, launched by the European Commission, identified main principles to determine energy poverty:
- proportion of household income spent on energy
- proportion of the population whose absolute energy expenditure is lower than half the national median
- inability to keep home adequately warm in winter (self-reported thermal discomfort)
- arrears on energy bills (household’s reported inability to pay energy bills on time over the last 12 months)
Even though these indicators cover much of the issue, this publication argues that they fail to grasp one of the key factors – that low-income households are disproportionately vulnerable.
Energy poverty severely impacts country’s economic and health situation and also its social cohesion. Moreover, there are large contrasts in realities across Europe and Southern and Eastern Member States particularly suffer from issues of energy poverty. For these reasons, the development of policy instruments to fight and eliminate energy poverty has to be done on two levels – national and European.
This report presents the following topics:
- European framework
- National interventions undertaken to help households financially
- Mechanisms aiming to encourage renovation of energy inefficient housing
- Recommendations for improving the living conditions of poor households experiencing energy poverty, particularly within the framework of “Green Deal”
The European Framework
The European Union’s policy is built on two pillars:
- it sets objectives to take vulnerable consumers into account
- it reduces the energy consumption
The European Union is working to help Member States with improving the housing situation through different programs. Now, the European Green Deal highlights the need to support the most affected people and regions and provides financial support through Just Transition Fund. With the general goal of cutting greenhouse gas emissions by at least 50% by 2030, this fund will be directed for the regions with the biggest transition challenges in form of investments in renewable energy sources and energy efficiency in the housing sector.
The European Union recognizes the process of reducing energy consumption through increasing the energy efficiency of the housing stock and delivers a number of successful programs to finance the housing renovation, such as JESSICA , Horizon 2020 or LEMON. Moreover, there is a revolving fund which is a lending facility, continually being replenished by projects reimbursing their loans, which enables the fund to lend again to other projects.
National Intervention Mechanisms
To deal with energy poverty issues on national level, national governments provide public funds for energy and encourage different initiatives to involve also the private sector. However, these mechanisms often fail at reaching all energy poor households because of inadequate funding, targeting or lack of accessibility.
Strategies used by national governments:
- specific financial aid for energy
- management of supply to protect users
- social tariffs
The non-take-up is one of the most common issues connected to the state financial programs that fight energy poverty. This is generally linked to three obstacles – knowledge about the aid, accessibility of the aid (complexity of application process) and administrative efficiency in granting the aid. As a solution, the state can either be targeting those who are most vulnerable, or to offer the same aid to everyone. The latter, for example, provides a solution to the stigma associated with receiving of financial aid but can be financially unsustainable. To add, for example, automating payments significantly limit the risk of non-take-ups as such. At the same time, it still does not guarantee that all eligible households will benefit from this kind of support.
Energy poverty combated through renovation of existing housing stock
The existing housing stock regularly does not confine with the most current regulations and standards on energy efficiency of buildings. Therefore, apart from direct financial support for energy bill payments, there is a material need to renovate the existing residential buildings as a means to get long-term benefit in form of increased savings from lowered energy expenses.
Improving energy efficiency in the social housing stock is even more complex process due to the number of actors included in the process. The key role has to be played by social landlords who adopt comprehensive and strategic approaches. The tenants have to become part of the constructive dialogue with their landlords and the motivation of the landlords has to be assured as to move with the process of housing renovations, especially in social housing.
Issues when renovating private co-owned properties
Basic challenge of renovation of co-owned properties is the amount of money required for the investment in connection of a high number of co-owners of the building. There are all legal, human and financial obstacles to renovating these types of buildings.
The multi-apartment buildings, indeed owned by many small-scale owner-occupiers, are often overlooked in the programs aiming at financial help for renovation.
In this regard, this new report by FEANTSA uses, among others, also REELIH project as an example of a project which improves the living conditions of owner occupiers of exactly these kinds of buildings.
- Integration of energy performance standards in a comprehensive housing quality strategy on national and European level
- Provision of adequate tools for this transformation with a primary goal of benefiting of poor households, tenants and individual homeowners
- Ambitious public policies to improve the living conditions of poor households
- Green deal for Europe based on a socially just policy of large-scale investment in renovations for energy efficiency of the Yhousing stock
You can find the whole publication here.