Energy poverty is a particularly serious phenomenon at European level, which affects over 50 million citizens mainly due to the low energy efficiency of residential buildings and household appliances, the high cost of purchasing energy products, low incomes and special needs of households
EC, 2020, https://ec.europa.eu/energy/topics/markets-and-consumers/energy-consumer-rights/energy-poverty_en
In Europe
The energy poverty issue has been intensified in recent years, mainly due to the impact of the economic recession. The continued growth of the phenomenon made imperative the need for more effective monitoring of its evolution in the various EU Member States.
Despite the fact that there is no common definition of energy poverty both at European and national level, various methodological approaches have been developed to determine the affected households.
At the European level, through the EU Energy Poverty Observatory, the indicators that have been selected for the comparative evaluation of the Member States and the assessment of the evolution of energy poverty on an annual basis are the following four:
[1] https://www.energypoverty.eu/indicators-data
Index M/2
which depicts the number of households in which expenditure for the purchase of energy products is lower than half of the median at national level. This index covers households whose energy costs are unusually low compared to national figures, thus highlighting those households that no longer meet basic levels of thermal comfort and, by extension, consumption.
Index 2M
which depicts the number of households in which the percentage of expenditure for the purchase of energy products in their income is higher than twice the value of the median of the corresponding percentage at national level. This indicator covers households that spend an unusually high share of their income on energy costs
Index of inability to keep homes adequately warm
which depicts the number of households with inability to keep homes adequately warm. This indicator covers the households that declare that they have difficulties in keep their homes adequately warm during the cold season
Index of arrears on utility bills
Ø which depicts the number of households with inability to pay energy bills immediately (and on time).
The first two indicators are calculated based on data collected in the context of the Family Budget Survey, while the last two are estimated in the context of the Household Income and Living Conditions Survey. It should be noted that both surveys are carried out by the Hellenic Statistical Authority on an annual basis.
In Greece
At national level, in the framework of the Action Plan, it was proposed that the identification of households affected by the phenomenon of energy poverty should be carried out through the calculation of a combined index, which will take into account as many factors as possible related to the issue under consideration.
This index, as shown in the following Diagram, incorporates the dimensions, which are described by Directive 2019/944/EU and relate to income, expenditure on the purchase of energy products and the energy efficiency of households’ residential buildings.
As the phenomenon of energy poverty is complex and multi-factorial, two different indicators were developed for its better monitoring and more efficient and accurate determination. Initially, Index I-II was examined.
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Index I-II: calculates the number of households that simultaneously meet both the following conditions • Condition I: The annual cost of the total energy consumption of each household should be lower than 80% of its annual cost to cover the minimum required energy consumption
Condition II: The net income of each household on an annual basis should be lower than 60% of the median of the corresponding income for all households, according to the definition of relative poverty.
In addition, Index Ι&ΙΙeq was determined by substituting the household net income with the reduced net income of each household based on the equivalent number of persons belonging to each household, according to the OECD scale (Condition ΙΙeq).
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Index I-IIeq: calculates the number of households that simultaneously meet both the following conditions: • Condition I: The annual cost of the total energy consumption of each household should be lower than 80% of its annual cost to cover the minimum required energy consumption
Condition IIeq: The reduced net income of each household based on the equivalent number of persons belonging to each household, according to the OECD scale, on an annual basis, is lower than 60% of the median of the corresponding income for all households, according to definition of relative poverty.
The selection of the first condition was carried out in order to incorporate into the definition of energy poverty the ability of each household to ensure a minimum level of coverage of energy needs, which is required for its livelihood. The problem of energy poverty is obviously related to energy consumption and through this specific condition it is ensured that it is correctly covered. However, the phenomenon of energy poverty is also affected by the disposable income of households. Therefore, the use of the second condition ensures that the inability to meet a minimum level of energy needs is due, among other things, to the lower net income that the household may have.
It should be noted that for the first condition, the cost of the energy consumed was preferred over the energy in natural units, in order to take into account the evolution of the price of the energy products used by households. In addition, for the needs of the first condition, the alternative of the annual cost of the total energy consumption being lower than 80% of the median of the corresponding cost for all households was not preferred, because it showed the same performance as the second condition due to the direct correlation of the cost of energy consumed with disposable income.
Indicators - Charts
In the framework of the mechanism for monitoring and controlling the phenomenon of energy poverty, the performance of both Index I&II and the indicators selected in the framework of the EU Energy Poverty Observatory are evaluated in order to compare them with
Index I&IIeq and identify the conditions that will lead to their convergence.
