We’ve all been at a location where the lights have suddenly gone out. Now imagine that happening in your own house due to the fact that you cannot afford your energy bills. We all rely on energy to supply us with adequate heating, cooling, and lighting in order to live a comfortable and healthy lifestyle. Yet, in 2018, around 34 million Europeans reported being unable to pay their energy bills.
On top of that, Eurostat reports that there are big differences regarding the energy poverty indicators amongst EU countries: In 2018, 36% of families in Greece had difficulty paying their electricity bills on time for a period of 12 months. In Bulgaria, 30% of low-income households experienced similar difficulties. In the Netherlands, Czech and Sweden, on the other hand, few homes had been unable to pay their utility payments on time (only around 2%). As a result, energy poverty remains a severe problem, and the EU and its members must make it a top priority to help vulnerable people escape it.
Energy poverty stems from a combination of factors, according to Eurostat and the EU Commission: lack of income, excessive energy use of disposable income, and low energy efficiency, notably in building performance. One of the primary financial issues that people have is their energy costs. For example, between 2008 and 2016, home electricity costs increased by 26.4% in the EU. When we consider that in 2015 about 15.2% of EU citizens lived in homes with structural problems (such as leaking roofs, wet walls, floors, or foundations, or rot in window frames or the floor), the picture becomes even more depressing.
All these factors force low-income households to fall behind on the payments of their utility bills. According to Eurostat data, there is a clear link between the percentage of persons affected by energy poverty and the percentage of those who are falling into arrears. Low temperatures and stress associated with unaffordable energy bills exacerbate energy poverty, which has a variety of negative consequences for people’s health and wellbeing. Respiratory and cardiac illnesses, as well as mental health, are only but a couple of examples. The lack of ability to pay their bills retrains people to the point where they minimise other human necessities in order not to be in debt. Examples of these are food and education. Energy poverty, in reality, has an indirect impact on a variety of sectors, including health, the environment, and productivity.
If at this point we introduce the pandemic into the mix, things get even more complicated. It is a grand issue nowadays and has influenced the need for more heat, gas and light due to constant immobility. The curtailment of energy bills helped people manage their costs, nevertheless people have been unable to keep up with their bills. Despite that, however, we have examples like that of Great Britain, where according to the Guardian contradictory actions are to take place. Ofgem plans to lift the price cap on tariffs back to pre-pandemic levels.
“Energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic,” said Jonathan Brearley, the chief executive of Ofgem to the Guardian. But, he continues, “We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy.”
The abrupt spike in wholesale energy market prices, according to the regulator, is to blame for the higher-than-expected rise of prices.
However, Alistair Cromwell, the acting chief executive of Citizens Advice, said to the Guardian that “With a tough jobs market and essential bills rising, now is not the time for the government to cut this vital lifeline.”
Other consumer organisations, like National Energy Action for example, have also expressed their displeasure with the decision to raise the energy price ceiling for the first time in two years, warning that many households are already facing growing financial difficulties as a result of COVID-19’s economic effect.
What can the EU do?
The EU has been discussing the issue of energy poverty for decades yet little action has been taken. Enter the ideas of energy affordability and energy efficiency. These two come hand in hand, and they should both be top priorities. Investing in energy efficiency would positively change the living conditions of many Europeans.
Across Europe, various projects are developing innovative solutions to combat energy poverty. As part of the 2018 call of Horizon 2020 Energy Efficiency, around €6 million were granted to 3 projects addressing energy poverty, namely STEP (Solutions to Tackle Energy Poverty), EmpowerMed and SocialWatt. These projects share the same purpose, to alleviate energy poverty by working with key actors, including utilities, consumer organisations or consumers themselves. They also share best practices to replicate successful schemes and issue policy recommendations.
Another example is Energiesprong, a Dutch project aiming at housing retrofits and PV panel installation and boilers that will not only create net-zero energy houses but will also autonomously produce the energy the inhabitants of the houses need.
Projects like these are fine examples of how European authorities, energy communities, and people working in the energy sector can collaborate in order to fight energy poverty. Because after all, as Gandhi said, ‘The true measure of any society can be found in how it treats its most vulnerable members’.
About the author
Claire Arsene is a 16-year-old high school student. She enjoys debating social issues as well as photography, reading and writing. She worked on this article during her 1-week internship at Enlit Europe. She found the topic of energy poverty very intriguing to write about.