Better Targeting Energy Affordability, Energy Poverty and Vulnerability

The European Commission has published a new study on the state of energy poverty across Europe.  Its  insights may also be helpful in development cooperation, since  it may help to  target poliotrical measures more precisely to deal with particular issue, which may be caused  by structural or by  temporary  factors,  by  lack of income,  high energy prices,  poor inefficient  technology or other.   

A quite interesting study  on energy poverty - at least to my judgment - is hidden in the voluminous European Commission’s energy summer package.  Although  the responsibility for addressing energy poverty, identifying vulnerable consumers and putting measures in place lies with national governments, the EC is concerned that countries do not currently identify or quantify vulnerable consumers, and therefore cannot adequately target energy poverty measures.  The EC has published a study which has found that energy poverty may affect nearly 11% of EU population.

 A distinction is made between energy poverty and  energy consumer vulnerability, although these are interrelated. This turns out to be helpful, to me and I suppose many  colleagues and partners in development cooperation.

Energy poverty  is understood by some authors as ‘The impossibility (or the difficulty) for a household to gain access to the energy it needs to ensure dignified living conditions at an affordable price from the point of view of its income.”   Energy vulnerability is rather defined by a relatively – depending on the country - high percentage of household income to be spend for energy services including transport.

The two issues need  different policies.  In the words of the study's  recommendations:   “Energy poverty concerns affordability, is often structural in nature and requires a long-term, preventive approach” whereas “Vulnerable consumer issues concern protection within and full access to the market, and curative solutions.” 

When thinking of all the measures which can be found  in the world or thought of to deal with the  two issues,  one may immediately try to classify  whether they  are helpful for the one or for the other:  social pricing schemes, subsidized prices, cross-subsidies, financial support from social policy mechanisms,  cash compensations,  energy considerations in social housing,  exchange of equipment  including lighting or induction stoves,  LPG-cooking programs,  improved cook-stoves, rural electrification, micro grids etc.   

The study also recommends to develop appropriate metrics for both aspects. The data are not always sufficient to determine the status in each country, however the direction is clearer and also the possibility to montoring  becomes  feasible.