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ENERGY POVERTY HANDBOOK

energypovertyhandbook-online

SOCIAL CAUSES AND

SOCIAL CAUSES AND CONSEQUENCES OF ENERGY POVERTY sian jones european antipoverty network introduction Over the last decade, Energy or Fuel Poverty has become a growing priority for EAPN members, as energy poverty increases systematically across the EU. The causes seem obvious: rising energy prices, shrinking income and poor housing. But does the evidence support these developments? What role has EU and national policy played, particularly with the liberalization and privatisation of services? What are the consequences for people who experience energy poverty daily and the NGOs that support them? What can be done? “Access to energy for all will be guaranteed when the public social welfare and energy authorities start working together.” (EU Meeting of People Experiencing Poverty, 2014) This statement come from people who face energy poverty, from the EU meetings of People experiencing poverty, organized by the European Commission and EU Presidencies with EAPN since 2000 (EAPN, 2010- 2016). They highlight the clear understanding that people on the front line have of the complex causes of energy poverty, and their belief that it is not evitable. Developing effective solutions depends on gaining a detailed understanding of the real drivers, and consequences to people’s lives, as well as to the overall society and economy. This article sets out the main causes and consequences of Energy Poverty based on members’ inputs underpinned by a review of relevant research findings. causes of energy poverty Energy Poverty is commonly understood to be when a person or household is not able to heat or fuel their home to an acceptable standard at an SOCIAL CAUSES AND CONSEQUENCES OF ENERGY POVERTY 21

affordable cost. In reality, it covers a very wide set of essential activities. It can occur if people cannot afford to heat their homes adequately, but also to cool them in hot climates. It may mean they cannot afford to cook hot meals, or have reliable hot water for baths and washing clothes or run essential domestic appliances (washing machines, irons, televisions, computers, etc.). The UK has been one of the first countries to develop a common definition. However, whilst England has now developed a separate definition (using a low income, high costs indicator), Scotland, Wales and Northern Ireland continue to use the well-known 10% definition. This definition has clear advantages in making a clear assessment of what proportion of a person’s income should be spent on basic energy costs as well as defining adequate levels of heating. “A household is in fuel poverty if in order to maintain a satisfactory heating regime, it would be required to spend more than 10% of its income on all household fuel use. If over 20% of income is required, then this termed as being in extreme poverty. According to WHO standards, a satisfactory heating regime is for vulnerable households (23 C in the living room, 18 C in other rooms). For other households it is 21 C in the living room and 18 C in other rooms).” (Energy Action Scotland, 2016) Despite difficulties caused by the lack of a common EU definition or complex comparable data, it is clear that energy poverty is an extensive and increasing problem that is impacting negatively on people’s living standards and rights. The EU Survey of Income and Living Conditions (EU-SILC) estimates that from 2010 and 2011 across the EU, nearly 10% of the population are unable to keep their home adequately warm, almost 16% live in homes that are damp, rotting or leaking, and around 9% are behind on payments for utility bills (Pye, May 2015). 2013 Eurostat figures show 52 million people across the EU cannot keep their home adequately warm, with 161 million facing disproportionate housing expenditure, 87 million in poor quality dwellings and 41 million facing arrears in utility bills. Shocking as these figures are, they are likely to be an underestimate. Other studies indicate between 50 and 125 million people at risk of energy poverty (EPEE, 2009). 1. Main drivers of energy poverty Most studies agree that there are three main drivers or causes that work in combination as highlighted by the INSIGHT_E study (Pye, May 2015) and the EAPN presentation to the Energy Poverty Workshop organized by DG Energy in the 2014 Annual Convention on Poverty (Jeliazkova, 2014). 1. Low incomes 2. Poor thermal efficiency and housing 3. High energy costs “Energy poverty is a growing phenomenon everywhere in the EU since 2008 (...) it is caused by an alarming mix of poorly insulated homes, rise in energy prices paid by the final consumers, and the stagnation of disposable income due to the general economic situation.” (Jeliazkova, 2014) However, it is usually the interplay between these multiple factors, including personal factors that make a difference. Stefan Bouzarovski in a recent review article highlighted specific household energy needs as a 4th significant factor (Bouzarovski, 2014). This is confirmed by the European Fuel Poverty and Energy Efficiency study: “Households most susceptible to fuel poverty combine low income with an additional degree of vulnerability, such as the elderly, disabled and sick and single parent families” (EPEE, 2009). The King Baudouin Energy Precarity Barometer also highlighted that single parent families (80% being women), single households and particularly older single households were particularly at risk. Unemployed people are also more vulnerable, 25.9% compared to 8.9% in work (King Baudouin Foundation, 2015). Other factors are also highlighted. For example, in the INSIGHT_E Study: rate of energy price rises versus income growth, ability to access cheaper energy prices, household energy needs, efficiency of energy use and importantly specific policy interventions are additional factors (Preston, White, Blacklaws and Hirsch, 2014). 22 SOCIAL CAUSES AND CONSEQUENCES OF ENERGY POVERTY SOCIAL CAUSES AND CONSEQUENCES OF ENERGY POVERTY 23

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