Towards a hidden energy poverty indicator for Spanish households

Abstract

Recently, the EU Energy Poverty Observatory (EPOV) introduced, among the primary indicators, the ‘Low share of energy expenditure in income’ indicator (M2), which aims to quantify the tendency of ‘households in arrears on bills’ to reduce their energy consumption. According to the definition of the EPOV, ‘the M2 indicator presents the share of households whose absolute energy expenditure is below half the national median’. In Spain, researchers from the Association of Environmental Sciences (ACA) and the research center Economics for Energy characterized energy poverty in an integrated way using different indicators applicable to the Spanish case. In the aforementioned reports and, in general, in all studies concerning Spain, the ‘low share of energy expenditure in income’ indicator (M2) is not considered or does not include a characterization of energy consumption. This paper proposes a methodology to characterize household energy consumption in order to quantify the number of Spanish households whose energy expenditure is abnormally low, considering their characteristics. This indicator will be called ‘modified low share of energy expenditure in income’ (‘Modified M2’). A sample of households from the Spanish Household Budget Survey has been categorized according to the climate zone, house features, and family composition. This work defines, for each household, the ‘required heating-expenditure’ (RHE), which is the theoretical expenditure required to ensure the indoor environment comfort (heating) and to provide a necessitated level of domestic hot water (DHW), considering the location and the dwelling’s typology and thermal characteristics. The climate classification was carried out following the Spanish Technical Code for Building Construction (CTE). On the basis of this classification, the thermal energy demand in the winter period was calculated according to the procedure established by the Spanish Institute for Energy Diversification and Saving (IDAE) for the energy performance certification system. Specifically, the characterization of the RHE has been carried out according to the following parameters: (a) climate zone; (b) number of occupants; (c) dwelling size; (d) insulation level; (e) type of thermal installations and energy supplies. On that basis, the ‘share of households whose actual heating expenditure is below a specific percentage of the RHE of the corresponding category’ was estimated. The difference between actual and required energy expenditure ‘could be due to high energy efficiency standards, but may also be indicative of households dangerously under-consuming energy’. Complementing the proposed indicator with a characterization of the household income level, it will be possible to eliminate false positives (those with a low level of energy consumption but high income) and, as a result, identifying Spanish households that reduce energy consumption due to difficulties in meeting their bills, or in other words due to energy poverty.