Governments across Europe are struggling to deal with fuel poverty, with mixed success. Utility Week correspondents report from across the continent
Last month, energy minister Greg Barker said he was “encouraged” that the number of fuel poor households in the UK had fallen from 5.5 million in 2009 to 4.75 million in 2010, but that fuel poverty remained “a serious national problem”. Given rising energy prices and Europe’s continuing economic malaise, fuel poverty is also a serious problem for countries on the continent. Like the government here, governments there are trying to ease fuel poverty with regulations, strategies and subsidies, but the record is mixed.
Recessionary Spain
With 24.4 per cent unemployment, fuel poverty is rife: 10 per cent of all households, or four million people, suffered fuel poverty in 2010, according to estimates released in March by the Environmental Science Association (ACA). These households spent either 10 per cent of their total income on energy (twice the national average) or could not warm their homes adequately in winter.
Spain lacks a co-ordinated fuel poverty strategy. A ragbag of public measures exists alongside cursory help from charities, while the government fixes cheaper tariffs for homes with low installed electricity capacity: payments can help those rated below 3kW (as well as vulnerable households). Laws specify energy efficiency standards for new homes or large refurbishments, but this does not benefit low-income households much because home ownership is concentrated in higher income groups.
Electricity prices in the country are relatively low by European standards, but they have risen sharply over the past five years, most recently by 7 per cent in the 12 months to April 2012. The ACA has called for the retrofitting of insulation to alleviate fuel poverty and generate jobs. Public sector subsidies and social payments can apply to insulation, some solar heating, and to fuel bills. But these funds are limited and can be tough to get. At the same time, some utilities will spread costs for consumers or guarantee connection to the vulnerable, but such schemes are not promoted prominently.
Robert Stokes, in Malaga
Action in France
Discounted energy tariffs for the poor have been in place since 2005 for electricity, and since 2008 for gas. However, less than half of the 3.8 million French households considered to be fuel poor have low enough income to be eligible for the reduced rates, according to INSEE, France’s national statistical office.
There are several other initiatives in place. In January 2010, the government launched the Habiter Mieux (Better Living) programme to better insulate low-income houses, and utility giants EDF, GDF Suez and Total agreed to collectively contribute £200 million to renovate 300,000 dwellings by 2017. Only homeowners can benefit from this, however, which is not much help to tenants, the group that accounts for most of the fuel poor.
Last year, the government also created a National Observatory of Fuel Poverty, overseen by the French Environment and Energy Management Agency (ADEME). It consists of 13 governmental, regulatory and private sector bodies, including EDF and GDF Suez. ADEME national programme co-ordinator Didier Chérel admits France has been slow in co-ordinating ministries’ anti-fuel poverty efforts. “In France, was really a sectoral policy,” he says. “Politicians have really only been aware of the problem for the past two or three years.”
David Hayhurst, in Paris.
Germany’s “hidden issue”
Household energy was cheap and used lavishly until 1998. Then came liberalisation of the electricity market and prices soared by more than 50 per cent by 2011. The proportion of private household spending on energy rose from 5.9 per cent to 7.2 per cent between 1998 and 2005, and lower income households spent between 14 per cent and 17 per cent of their annual income on energy in 2008.
Sebastian Elbe, founder of consultancy Sprint, says the subject of fuel poverty is “a hidden issue in Germany”. Attempts to get the federal government involved have not resulted in much success, and Elbe is not optimistic about the future: “The UK much more ahead on this topic,” he believes.
However, one programme run by Germany’s biggest charity, Caritas, has had considerable success in persuading households to cut their energy bills. No funding is provided, but the charity claims to have reduced energy bills by 15 per cent, £80 a year, for around 50,000 households in just over a year or so.
Alan Osborn, Berlin
High-priced Italy
In 2010, 11.5 per cent of Italian families could not afford to adequately heat their homes, according to the National Institute of Statistics. While average Italian wages are among the lowest in Europe, Italians also pay some of the highest energy prices, in an energy market heavily biased towards imported natural gas. According to consumers’ association Federconsumatori, an apartment of 85 square metres costs an average family £1,390 a year to heat; £465 more than the European average.
In 2010, the Regulatory Authority for Electricity and Gas obliged energy suppliers to give consumers the option of paying gas bills through instalments. However, consumers’ consortium Adiconsum believes suppliers should go further. “For thirty billion euros of unresolved credit in Italy, about half are unpaid domestic utilities bills,” according to Pietro Giordano, secretary general. He says a fund should be created from energy bill income to support poor families.
As in many other countries, fuel poverty in Italy can also be linked to low quality housing and energy inefficiency. A report from the Centre for Technological Development, Energy and Competitiveness revealed that 64 per cent of buildings in the country were built before 1973, when energy saving building standards were introduced.
Lee Adendorff, in Lucca.
No data in Poland
The fight against fuel poverty is hindered by a lack of data and legislation, according to spokesperson Agnieszka Głosniewska from Poland’s Energy Regulatory Office (URE). “This is not an issue that’s regulated by law,” she says. “There’s no definition of fuel poverty; there are no good statistics.”
Polish legislative efforts are more broadly concerned with “energy poverty”, encompassing access to heating and electricity as well as affordability. An effort to pass a law helping ease fuel poverty stalled in 2009, Głosniewska says, but now a new attempt is underway.
According to a spokesperson from the economics ministry, if adopted, this legislation would protect “vulnerable consumers”, allowing a 30 per cent discount on electricity bills. And it would most certainly be welcomed: URE recently published research indicating that over 40 per cent of Polish households spent at least 10 per cent of their monthly income on energy in 2008 (the most recent year for which data is available).
Blake Berry, in Warsaw
This article first appeared in Utility Week’s print edition of 15 June 2012.
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