Energy poverty is a widespread problem across Europe, where many households pay considerable share of their income on energy bills and at the same time experience difficulties with satisfying basic energy needs. They have to choose between drastic energy saving, which reduces their thermal and overall comfort, and paying their invoices  at the expense of other important expenditures – on food or healthcare.  There is no common European definition of energy poverty, however most Member States acknowledge the scale of this socio-economic situation and its negative impacts – from severe health issues, through social isolation to environmental pressure resulting from using bad quality fuels and significant GHG and other pollutants emissions from badly-heated and badly-insluated households.[1]

Energy poverty concerns both heat and electricity. It is directly linked to energy consumption (its level and type), generation (type of energy source used) and distribution. Inability to satisfy basic energy needs comes from various sources, icnluding inadequate development of energy infrastructure, characteristics of housing infrastructure (e.g. lack of thermal insulation, old and inefficient appliances) and low level of energy awareness.[2]

Energy poverty in project countries

Germany

Germany has no legal definition of energy poverty and it is not covered in official statistics. However, poverty in general has been on the rise in recent years. In 2017 approximately 19.7 percent of people were affected by poverty or social exclusion (Statistisches Bundesamt, 2019). Depending on measurement methods, studies estimate that between 5 – 23 percent of the German population are affected by energy poverty (Heindl 2013; Schaffrin & Schmidt-Catran 2017). The strong increase in electricity prices between 2010 and 2018 has affected many low-income households that has also led to a public debate on potential social drawbacks of the energy transition (Energiewende). Rising prices for electricity, heating and housing - especially in areas of high population density - further aggravate the tense situation of low-income households. In 2017 more than 340,000 electricity customers were turned off because they have not paid their bills. In 2019 German households paid the highest nominal electricity prices of all customers in Europe. For achieving climate goals, there is a strong need for efforts to adopt and implement social aware or compatible energy policies on federal, state and local level.

Hungary

Hungary has one of the highest energy poverty levels in the EU. An average Hungarian household spends approximately 14-18% of its total income on energy-related expenses. The most affected regions are rural areas in northeastern and southwest parts of the country.

According to the research results of Energiaklub, 21% of the households are threatened by energy poverty, which is around 800,000 dwellings nationwide. Generally, families which can be called energy-poor households, live in detached houses in the countryside. These homes have a relatively big heated floor area, however, the building envelope is inefficient, heating appliances are mostly out-dated.

Firewood is one of the most common fuel types of households suffering from energy poverty. However, in the last few years, the price of firewood has skyrocketed. This tendency forced low-income households to cover their heat demands with waste and lignite. These kinds of fuel substitutes cause heavy air pollution in wintertime and several health problems in the long run.

Legal obstacles and lack of good practices create a significant hurdle for alleviating energy poverty in Hungary. For years there has not been any significant support for household renovations, neither at the national nor at the local level. Moreover, the lack of municipalities’ capacity and resources also block addressing the issue. That is why it is inevitable to act now and empower municipalities stakeholders to implement low-cost energy efficiency measures via the EnPover Project.

Poland

The problem of energy poverty concerns approx. 12% of Polish inhabitants and its scale is disproportionate to the scale of income poverty – almost 6% of Poles are energy poor but not income poor. The groups, which suffer from energy poverty the most are the people living in the countryside and little towns, young families on their first job (or without), residents of high-poverty urban areas and elderly and disabled people.  The first group represents 2/3 of all energy poor, while the last one ¼ of all.[3]

Vulnerability to energy poverty also largely depends on the region. The scale of the phenomenon varies between 6% and 18% in out most voivodeships. The problem of too high energy costs compared to available income is especially visible in Eastern Poland, while the problem of underheated households – in Western regions of the country.1

Energy poverty not only lowers the quality of life and can have an adverse impact on the health of those affected, but also contributes to smog, which is one of the major environmental problems in Poland, as energy poor households more frequently use old furnaces and low-quality fuels.

Alleviating energy poverty

Following Polish Institute for Structural Research classification, reducing energy poverty requires action in three key areas:

• Alleviation of symptoms, where the total elimination of the phenomenon is hard to achieve in the short-term perspective. It include such solutions as social benefits and tarrifs, which reduce the pressure on household budgets, and protection against energy cut-offs, which secures access to energy and allows to avoid sudden depretiation of life sytuation.
• Removal of causes, which is key to solving the problem. It includes such solutions as energy consultations and encouraging energy saving behaviour, which builds knowledge on how to correctly and efficiently use energy, thermal retrofitting of buildings, which secures them from heat losses and reduces energy demand and consumption and other energy-saving improvements, such as installation of thermostatic valves on the radiators, replacement of light bulbs, replacement of old and inefficient equipment.
• Preventing from happening, which includes long-term measures preventing vulnerable households from reaching energy poverty, such us implementation of financial incentives to undertake thermal retrofitting of buildings (co-funding, preferential loans, tax deductions) and expansion of district heating network, which increases access to relatively cheap and secure energy.[4]

Municipalities have an important role to play in this matter as they can either implement or initiate measures in all of these three areas. There are already examples of many local good practices, such as providing energy consultancy services, launching co-financing program mes (e.g. supporting replacement of old and inefficient coal-fired sources), handing out small energy-efficient equipment (e.g. light bulbs) and educational campaigns, which can serve as a source of inspiration for other cities tackling with the energy poverty problem.

[1] https://ec.europa.eu/energy/eu-buildings-factsheets-topics-tree/energy-poverty_en?redir=1;
IBS Policy Brief UBÓSTWO ENERGETYCZNE W POLSCE – DIAGNOZA I REKOMENDACJE (en. IBS Policy Brief Energy poverty in Poland – Diagnosis and recommendation)

[2] IBS Policy Paper Ograniczenie ubóstwa energetycznego w Polsce – od teorii do praktyki (en. IBS Policy Paper Alleviating energy poverty in Poland)

[3] IBS Policy Paper JAK OGRANICZYĆ SKALĘ UBÓSTWA ENERGETYCZNEGO W POLSCE (en. IBS Policy Paper How to reduce the scale of energy poverty in Poland)

[4] IBS Policy Paper JAK OGRANICZYĆ SKALĘ UBÓSTWA ENERGETYCZNEGO W POLSCE (en. IBS Policy Paper How to reduce the scale of energy poverty in Poland)