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Energy Poverty - A European lssue

December 2009 (read also INFORSE-Europe views in 2010-11)

When a family is not able to afford the costs of keeping its house warm and the lights on, it is hit by “fuel poverty” or "energy poverty". In many ways this is not different from other kinds of poverty, but if the economic problems comes from raising energy costs and the energy bill is a large part of household expenditures, it is reasonable to look for energy - related solutions. This can be increasing energy efficiency or cheaper energy.

With the EU market regulations adopted in 2009 all countries have to include consumer protection for vulnerable consumers when they implement amendments of electricity and gas market directives , which has a deadline of 3 March, 2011. INFORSE-Europe urges that the countries in doing this use the opportunities to bring consumers out of energy poverty with energy efficiency, and that they stop tariffs that penalise small consumers with high fixed charges or similar structures. See Energy Poverty Recommendations from INFORSE-Europe (pdf file 90kB, 2009)
for implementation of these amendments.

Basic Facts on Energy Poverty and Fuel Poverty
In the, UK fuel poverty is said to occur when in order to heat a home to an adequate standard of warmth a household needs to spend more than 10% of income on total fuel costs (heating fuel plus electricity). In this text we use the term "energy poverty" for households that have difficulties to pay fuel and electricity bills for heating and electricity; not transport.

The UK have addressed fuel poverty in a number of ways with:
• A national priority to end fuel poverty soon,
• Grants for winter fuel for elderly people,
• Grants for improvements of insulation, and heating systems for vulnerable groups,
• Involvement of utilities, municipalities, and NGOs.

Fuel poverty is not at all confined to the UK. In many EU countries, not the least in Central Europe, it is common that poor people pay well above 10% of their income for household energy costs. It is also common that poor people disconnect from heat and gas supply to save money. In Central Europe the traditional solution was to subsidize energy supply for the entire population, with the well-known results of low energy efficiency and no incentives to develop renewable energy. With the reductions of the subsidies there are now incentives to save energy, but too often the poorer part of the population suffers from high household energy bills with the low efficiency in existing houses and higher energy costs. The disconnection from district heating networks also lead to deteriorating of the basis for cogeneration of heat and power, one of the ways to use fuel more efficient.

Energy Efficiency as Solution
To address the problem of affording the household energy bills, the strategy must be to reduce the bills with energy efficiency, but also to give a subsidy specifically targeted to the poorest families. Since it is a common problem for many EU countries, eliminating energy poverty should become an EU energy priority together with internal market, climate, and security of supply. The internal energy market and the EU Emissions Trading Scheme tend to increase household energy costs, thus energy poverty reduction policies must give a counterweight for the poorer part of the population. The solutions should include increase of energy efficiency as the most sustainable solutions, but also increased renewable energy and subsidies for those hardest hit.

Energy Poverty & EU Policies
Eliminating energy poverty should be a priority for EU funding, including structural, social, and cohesion funds.

If energy poverty is a national priority, energy suppliers should have a focus on families in energy poverty in their energy efficiency activities, a possible requirement with an extension of the energy service directive.

As an EU priority, energy poverty elimination programmes should also be granted exemptions in state aid rules.

To bring energy poverty elimination to the European agenda, it must be recognized by the European Parliament or a council of EU ministers: social ministers, energy ministers, or prime ministers. That would be an important first step.

These are the initial proposals of INFORSE-Europe. Comments are welcome. We are also happy to participate in initiatives to bring energy poverty stronger into the EU agenda.

Read background paper on fuel poverty in the UK (pdf file 66kB, 2008)

Download copy of the "Energy Poverty - a European Issue" proposals for discussion (pdf file, 2008).

See also:
European Project on Fuel Poverty and Energy Efficiency (EPEE). IEE Project in 2007-2009. (From INFORSE-Europe members CLER and Ecoserveis were partners).
From the Project's web site you can download several reports including: European recommandations guide (24 pages, September 2009.) Definition and evaluation of Fuel Poverty in Belgium, Spain, France, italy and in the United Kingdom. Detailed report on the different types of existing mechanisms (legislative, financial, technical, etc…) to tackle Fuel Poverty.

Contact: INFORSE-Europe, International Network for Sustainable Energy - Europe is a network of 72 NGOs promoting renewable energy and energy efficiency. See www.inforse.org/europe. Contact ove@inforse.org, Ph: +45-86227000.

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