Can Europe lead in clean energy and beat energy poverty?

Whether it means pulling on a woollen jumper, wearing gloves, or cranking up the heating, the winter months usually prompt small changes in our day-to-day behaviour. But for some people, the cold can’t be beaten with just another layer of clothing. More than one in ten Europeans suffer from ‘energy poverty’, a lack of essential energy services. As temperatures plunge, they shiver in unheated homes, fall ill, and struggle to make it through to spring.

While the Juncker Commission has made clear progress on its commitment to a clean energy transition – as acknowledged in the recent Agora Energiewende and Sandbag report – the reality remains that clean energy can be costly and progress on addressing energy poverty has been much less prominent. January 29 saw a step forward to redress the balance when the European Commission launched the Energy Poverty Observatory.

Speaking at the Observatory’s launch in Brussels, EU Energy Union Commissioner Maroš Šefčovič said that it “marks an important milestone in our struggle for a more just, solidarity, and inclusive Europe,” adding that it would help address energy poverty across borders and learn from different member states experiences. “Energy poverty is a visible problem across the EU in 2018 and reaches unacceptable levels – not only in poor countries, but also in rich countries,” he said.

Defining ‘energy poverty’

The Observatory is hampered by an obvious problem: there is no agreed definition of what energy poverty is. Despite calls from European Parliament in 2008 for a definition and from the EU Economic and Social Committee in 2013 for indicators, two third of EU member states do not yet define it.

The website itself merely says, “Energy poor households experience inadequate levels of these essential energy services due to a combination of high energy expenditure, low household incomes, inefficient buildings and appliances, and specific household energy needs.” Mr Šefčovič said the EU did “not attempt to create a universal definition of energy poverty” and “rather opted for a description of the term,”, adding that he expects EU countries to define the issue and develop measures to combat it.

Energy poverty tends to be seen inaccurately as an issue for developing countries. Some 2.5 billion people, one third of humanity, do not have access to electricity or modern energy services; around 54 million of them live in the EU. A 2015 EU study noted that it particularly affects central, eastern and southern Europe. The worst affected member state holds the current EU presidency: Bulgaria. A 2013, survey found that 46.6% of Bulgarians could not keep the home ‘adequately warm’, compared to the EU average of 10.8%.

How energy poverty fits in with clean energy?

Until now, energy poverty has barely featured in EU policy debates. Most energy discussions have been about the clean energy transition, with the EU committing to having at least 27% renewables in its energy system by 2030. In 2017 wind, solar and biomass for the first time delivered more European electricity than coal, growing by 12% from 2016.

The Observatory is part of the Clean Energy for All Europeans Package, launched by the Commission in 2016. It contains proposals addressing the issue of energy poverty alongside a push for the bloc’s clean energy transition. The revised Electricity Directive and the Energy Union Governance Regulation, require member states to clearly define and measure energy poverty, to monitor its levels and report on measures taken to prevent it every two years. The Commission has also proposed procedural safeguards against disconnections as part of general consumer protection policy, ensuring people are informed on alternatives to disconnection.

Upgrading the energy efficiency of buildings could bring benefits for many European households who suffer from poorly isolated homes or live with old and ineffective heating systems. To achieve this, in addition to regulatory proposals, the Commission has called for more investment and the new Smart Finance for Smart Buildings Initiative has identified several measures to promote building renovations.

As Mr Šefčovič noted, energy efficiency could be one of the best responses, especially for buildings, where 75% of those in the EU are inefficient. Energy efficiency also covers innovations such as micro-grids and as well as technologies that dramatically lower costs: since 2010, there has been a 95% drop in prices for LED lighting, 60% for solar PV and 75% for battery storage.

What comes next?

Can the EU promote clean energy and fight energy poverty at the same time? The upcoming clean energy trilogues gathering the Commission, the Parliament and the EU member states will be all-important in the fight against the problem and the promotion of low carbon energy.

In the absence of an EU definition of ‘energy poverty’, the responsibility for clarifying the problem sits with the member states. As with any issue, clearly identifying the problem is critical to finding and implementing solutions.

Resolving energy poverty and delivering a clean energy transition is likely to take money. Jerzy Buzek, who chairs the European Parliament’s Committee on Industry, Research and Energy, says more investment in the low-carbon transition will address the two most important issues for citizens: their health and their pocket. “As long as we fail to solve energy poverty, we will fail everything else in the Clean Energy Package,” he said.

The new Observatory is a welcome step in the journey to ending energy poverty. It should help member states find common criteria to assess and then address the issue. But governments and businesses still have to work together to ensure that technologies and policies to deliver the clean energy economy we need will also end energy poverty in Europe.

Authors:  Anett Toth | Venetia Spencer | Leo Cendrowicz | Alexis Germon

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