The concept of energy poverty: from understanding to overcoming it

The concept of energy poverty: from understanding to overcoming it

Energy poverty as a concept has a long tradition, and energy subsidies for low-income households have been a major part of social policy in West and Central and Eastern Europe (CEE) as well as former Soviet Republics (CIS). Due to different political and economic circumstances, such as the higher homeownership rate in multi-family apartment buildings (MFABs) and the worse performing building stock, energy poverty rates in Eastern Europe and the CIS are much higher than in Western Europe.

The European Union (EU) provides a good framework and guidance on how to include energy poverty as a concept and measures to fight it in its regulation for the National Energy and Climate Plans (NECPs), and also in the Renovation Wave. There are financial mechanisms and dedicated funds for building renovation, and money is earmarked within the Recovery and Resilience Facility, but the implementation in Member States so far is not sufficient to alleviate energy poverty.

The consortium of the H2020 project ComAct has taken a deep dive into five countries – Hungary, Lithuania, Bulgaria, North Macedonia and Ukraine – to look at their energy poverty rates, how the energy-poor are identified, and what programmes are in place to support them. Furthermore, existing financial schemes from all over Europe, which have proven to help alleviate energy poverty in multi-family apartment buildings are identified.

According to the research on the five countries, Bulgaria has the highest share of energy-poor households among EU Member States (10-35%), followed by Lithuania (10-26%). Hungary has a relatively low level of energy poverty compared to the other pilots (5-10%), but MFBAs have very specific problems that make renovation more challenging from an organisational point of view. Unlike North Macedonia, whose energy poverty problem is much more severe in urban areas, there are no socially targeted renovation subsidies available. There are subsidy schemes in Ukraine too, but as there is a large energy-poor population and the building stock has very low energy performance it is difficult to target these schemes at the most vulnerable consumers.

The definition and use of indicators for identifying energy poverty are very different across the countries, and cover different target groups: this shows that the fight against energy poverty has a strong political character. Effective policy instruments combatting energy poverty should however include financial support for structural building renovation as well as auditing, and information and awareness-raising measures targeted at the household.

Find more insights in the full report

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