State-of-the-art of a selection of EU member states energy poverty instruments

Abstract

The following document provides a review of the Energy Poverty related issues across a selection of Member States: Italy, France, Germany, UK and Spain, the official and unofficial definitions for energy poverty and vulnerable consumers, the different indicators to address this problem and the tackling instruments available (in terms of financial help, consumer protection or energy efficiency measures). As a starting point, it is analyzed the role acquired by each Member States on the protection of vulnerable customers and scope of the term Energy Poverty and its coverage. Then, the support metrics for policy-makers are classified according to (Heindl, 2013) criterion: subjective and objective indicators depending on several factors such as living conditions, income or energy expenses. Some of the indicators presented correspond to the social bonus (discount on electricity or gas tariffs); Low Income High Costs (LIHC) indicator (ratio between energy expenses and income); or the Poverty Line (based on the minimum income standard). With regards to current policies, these are characterized by their scope and some examples are: social tariffs (Italy, Spain and France), which are effective short-term financial helps to reduce the price of energy bills; and long-term policies in terms of energy efficiency programmes for buildings, inefficient appliances renovations through loans or incentives (StromCheck or Habiter Mieux). However, still the financial source is the key point of these instruments which place in a disadvantage position the non-eligible customers who usually pay e.g. tariff discounts through general taxation. In order to analyze the problem more accurately it is necessary to collect information available from data sources and surveys, which are the bases for calculating indicators’ thresholds and analyzing the impact of current policies. After the study of the whole figure of each country, it is done a revision of four proxy indicators (EU-SILC, 2015), namely, people at-risk-of poverty or social exclusion, arrear on utility bills, inability to keep home adequately warm, and dwellings with leakages and damp walls, to evaluate and compare the current status of energy poverty main drivers across countries. Some of the conclusions are concerning to the available information mechanisms and accessibility for customers such as billing transparency rules; good price comparison instruments; or disconnection restrictions. For these reasons, it is proposed a higher degree of retailers relationship with customers. This can be achieved by means of close and customized services, as these companies are one of the key points for acquiring accurate information of household energy needs. Co-operation between municipalities and retailers can create a major source of detailed knowledge of households that suffer energy poverty. Local institutions in partnership with social and energy organisations can collect more accurate amounts of data from a closer perspective of the poor areas where there is people with financial needs, poor levels of education and where buildings are most energy inefficient.