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ENERGY POVERTY HANDBOOK

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DEFINITIONS AND

DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU 1 harriet thomson university of manchester carolyn snell university of york introduction Energy poverty is a multi-dimensional phenomenon that occurs when a household is unable to secure socially- and materially-needed levels of energy services in the home (Bouzarovski and Petrova, 2015). Among the key underpinnings of energy poverty are poor housing quality, cuts to household income, growing income disparities, and the affordability of energy. Issues such as individual energy needs, and energy sector reforms compound this. To date energy poverty has been conceptualised and measured in a variety of divergent ways across the countries of the EU, with the availability of data often driving definition and measurement. This chapter serves several functions, firstly, it outlines the main definitions of energy poverty that exist across Europe, and secondly it considers the main approaches that have been used to measure the issue, as well as to identify households at the local-level for policy interventions. Finally the chapter reflects on the overall state of play for definitions and indicators of energy poverty across the EU. conceptualising and defining energy poverty Conceptualising and defining energy poverty is a necessary first step prior to creating measurement indicators. Indeed as Boardman remarks, “who is fuel poor depends on the definition; but the definition depends on who you want to focus on and this involves political judgement” (Boardman, 2010: 21). Before introducing the range of definitions that exist, it is important to comment on terminology; namely that at the European scale the terms ‘energy poverty’ and ‘fuel poverty’ are both used interchangeably in policy and academic literature. The terms can be treated as DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU 101

distinct, with energy poverty referring to a lack of access to modern energy services in developing countries, and fuel poverty referring to a problem of affordability in the world’s most developed countries. However, in recent years the terms have typically been used to mean the same thing (Boardman, 2010), with authors such as Bouzarovski and Petrova (2015) rejecting the developing/developed country binary. In this regard, it should be noted that it is an incorrect assumption that fuel poverty only refers to difficulty in heating the home – both terms refer to all energy services in the home. At the EU-level there is no official definition of energy poverty, nor is there a specific legislative programme to address the issue, as the analysis of the EU’s discourse on energy poverty by Thomson et al. (2016a) documents. The limited formal policy interest in energy poverty is also reflected at the Member State level, since at the time of writing only 5 countries have some form of definition, as Table 1 summarises. Table 1 - Summary of official definitions of energy poverty. (Thomson et al., 2016a) england (2013-): “A household is considered to be fuel poor where: • they have required fuel costs that are above average (the national median level) • were they to spend that amount, they would be left with a residual income below the official poverty line” [60% median income] (Department of Energy and Climate Change, 2013: 3) france (2009-): Officially a person is considered fuel poor “if he/she encounters particular difficulties in his/her accommodation in terms of energy supply related to the satisfaction of elementary needs, this being due to the inadequacy of financial resources or housing conditions” (Translation of De Quero and Lapostolet, 2009: 16). In practice, this is complemented by an unofficial definition of spending more than 10% of income on energy costs (Dubois, 2012a). ireland (2016-): “…a household that spends more than 10% of their income on energy is considered to be in energy poverty.” (Department of Communications, Energy and Natural Resources, 2016: 8) slovakia (2015-): “Energy poverty under the law No. 250/2012 Coll. Of Laws is a status when average monthly expenditures of household on consumption of electricity, gas, heating and hot water production represent a substantial share of average monthly income of the household.” (Strakova, 2014: 3) uk-wide (2001-2013) and northern ireland, scotland, wales (2013-): “A household is said to be in fuel poverty if it needs to spend more than 10% of its income on fuel to maintain an adequate level of warmth.” (Department of Energy and Climate Change, 2010: 1) There are a number of explanations for the limited number of formal energy poverty definitions. It may be due to the multidimensionality of the phenomenon, which means that it requires joint multi-agency policy solutions (Thomson et al., 2016a). Alternatively, on the basis of decision-maker interviews, Bouzarovski et al. (2012: 78) suggest that it may be due to a lack of a strong institutional centre within political initiatives to address the problem, a limited scientific evidence base, and the unwillingness of some Member States to recognise a new form of deprivation. approaches for measuring and identifying energy poverty Measuring energy poverty is a difficult task. It is a private condition, being confined to the home, it varies over time and by place, and it is a multidimensional concept that is culturally sensitive. The choice of measurement approach is contingent on whether energy poverty incidence is to be measured at the pan-European, national or regional level for monitoring and benchmarking purposes, or whether a finer grained analysis is needed to identify energy poor households at the local scale for policy delivery. It is further shaped by the availability of data and resources to undertake additional empirical research, and policy priorities in terms of social groups considered most vulnerable and in need of support. In general terms, there are a variety of approaches to measuring energy poverty - Figure 1 provides an illustrative diagram of some of the measurable drivers and outcomes, but is certainly not exhaustive. One approach might be to capture the causes. For example, measuring the energy efficiency of a house and the equipment contained within to see if a household would have to pay more than average energy costs to achieve adequate energy services. Alternatively, the outcomes of energy poverty 102 DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU 103

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