Perspectives on Energy Poverty in Post-Communist Europe

George Jiglau, Anca Sinea, Ute Dubois, Philipp Biermann, George Jiglau, Anca Sinea, Ute Dubois, Philipp Biermann

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000198935
• Edition: 1
• Topic: Économie
• Subtopic: Politique commerciale

This book explores the issue of energy poverty in post-communist Europe and shows how it is viewed and addressed through public policies.

Energy poverty is severely affecting many parts of the European Union, but up until now only a few comparative analyses have been developed to understand the phenomenon and its diversity throughout the region. Filling this gap, this volume focuses specifically on the Eastern European region, drawing on contributions that cover a wide range of countries including Germany, Hungary, Poland, and Romania. This region has undergone significant transitions over the past three decades, but, as the contributions demonstrate, it still faces major challenges to providing clean and affordable energy to its citizens and renovating existing housing stock. The chapters explore the extent of energy poverty in each country and examine the drivers, while casting light on how policy-makers tackle the issue through a critical examination of the instruments implemented to help energy poor people.

This book will be of great interest to researchers in the fields of energy policy and comparative politics, to policy-makers in post-communist countries and EU institutions, and also to other relevant actors, such as companies and NGOs who focus on issues of energy poverty.

This book is based upon work from EU COST Action 'European Energy Poverty: Agenda Co-Creation and Knowledge Innovation' (ENGAGER 2017–2021, CA16232) supported by COST (European Cooperation in Science and Technology — www.cost.eu).

1 Introduction

Energy poverty and its drivers in post-communist Europe – the visible, the measurable, and the hidden

Ute Dubois

The slow emergence of energy poverty on policy agendas in post-communist Europe

In comparison to energy poverty levels in other European countries, those in countries of post-communist Europe are high (Bouzarovski and Thomson, 2019; Bollino and Botti, 2017; Dubois and Meier, 2016; Thomson and Snell, 2013). However, characterizing energy poverty in the context of post-communist Europe is not an easy task. Looking at European statistics, it appears that there is not one type of energy poverty but rather various forms, which do not have the same salience in all countries.

As shown by data from the European Energy Poverty Observatory,¹ some post-communist countries rank highest on two main energy poverty indicators: “inability to keep home adequately warm” and “arrears on utility bills.” On the “inability to keep home adequately warm” indicator, Bulgaria and Lithuania are the two most affected countries, with 33.7 percent and 27.9 percent respectively of households affected in 2018, compared to the EU average of 7.3 percent. On the “arrears on utility bills” indicator, the group of the five most affected countries includes four post-communist countries: Greece – the most affected country in Europe (35.6 percent) – is followed by Bulgaria (30.1 percent of households), Serbia (28.4 percent), Croatia (17.5 percent) and Romania (14.4 percent).

Despite the sometimes-severe difficulties of households, no single method allows satisfactory characterization of energy poverty throughout the region. On many indicators produced by the European Energy Poverty Observatory, energy poverty symptoms do not have similar intensities throughout the region, and energy poverty occurs in a less visible way. For example, in Romania, one of the lowest-income countries in Europe, 51.4 percent of the households in the first income decile had low absolute energy expenses in 2015, which suggests that the poorest households are either massively rationing their energy use or that they are obliged to rely on low-cost or free fuels (such as wood collection or burning waste). The same problem appears in Poland, where 44.4 percent of households in the first income decile have low absolute energy expenses. Looking at the indicators measuring whether dwellings are comfortably warm in winter and comfortably cool in summer, Bulgaria ranks second on “dwelling not comfortably warm in winter,” with 42.3 percent of households affected in 2012, and ranks first on “dwelling not comfortably cool in summer,” with 52.4 percent of households affected.

However, energy poverty has been entering the policy agendas of countries of the region only slowly and the causes of energy poverty are sometimes not well recognized by policy-makers. In some countries, such as Poland, the first analyses on the topic were developed several years ago (Stępniak and Tomaszewska, 2013). But most countries are still in the initial stages of the recognition of energy poverty. While some countries, for example the Czech Republic, recognize that energy poverty is a multidimensional problem,² others, such as Slovakia, consider that energy poverty is mainly a problem of poverty.³ In the recent report of the European Observatory of Energy Poverty, which includes a more general overview of the approaches of different countries on the issue of energy poverty (Bouzarovski and Thomson, 2019), we learn for example that Lithuania and Hungary, despite being significantly affected by energy poverty, “consider that the measures already in place (such as price regulation in Hungary), are sufficient to address the phenomenon” (EPOV, 2019). Bulgaria – one of the countries with the highest energy poverty levels – focuses on creating “the right conditions for the protection of consumers in the framework of an open market.” In Estonia, social welfare seems to be the principal approach for tackling energy poverty. Poland mentions the role of “energy efficiency housing upgrading strategies for energy poverty” to reduce CO₂ emissions and improve air quality. And Romania “acknowledges the prevalence of energy poverty and mentions several strategies to tackle it,” including renovation programs addressing explicitly energy poor people. Slovenia, “unlike many other EU countries … focuses on improving energy efficiency and retrofitting the dwellings occupied by the most vulnerable.” And Croatia has announced an integrated program for elimination of energy poverty (EPOV, 2019).

In many countries of the region, the policy measures and level of support given to energy poor households are only limited, leaving households exposed to cold homes, increasing energy burdens, and debts with energy suppliers.

This weak presence of the topic on national policy agendas also translates to research efforts dedicated to energy poverty analysis that are less developed in post-communist Europe than in other countries. As noted by Gangale and Mengolini (2019), participation of researchers and institutions of the region in EU research and innovation projects is still low, despite high levels of energy poverty in some countries. This situation is perhaps explained by the fact that past research projects have focused to a large extent on social housing, which represents only a small share of homes in eastern Europe (Pittini et al., 2017; Hegedüs, 2011).

Figure 1.1 Expectations of European citizens regarding future European energy policy.

Source: European Union (2019).

Still, in a context where energy policies are increasingly defined at the European level, households of the region have clear expectations regarding the goals of future European policies. As shown in Figure 1.1, drawn from a recent Eurobarometer survey, respondents from the eastern part of Europe expect the European Union to prioritize improving the affordability of energy.

In this chapter, we contend that many problems related to energy poverty do not come to the forefront of national debates in the region because some of their aspects are invisible or scarcely visible to policy-makers. The chapter has been developed following exchanges among energy poverty experts that have taken place since the launch of ENGAGER COST Action in 2017. In particular, the meetings to prepare the present book have helped highlight the factors driving energy poverty in the context of post-communist Europe.

Our main contribution is twofold. On the one hand, we discuss these visibility problems and their implications. On the other hand, we use the literature and exchanges with energy experts from the region to highlight certain specificities of energy poverty in post-communist Europe. This chapter is organized into three parts. The first section discusses the lack of visibility of energy poverty symptoms for policy-makers, which implies that efforts need to be undertaken to acknowledge the issue. The second section analyses the variety of energy poverty drivers and context factors and shows that many determinants of energy poverty are actually influenced not by individual characteristics of households but by factors which are part of the larger context, which can be national or regional. Finally, the third section discusses some of these context factors which might be particularly relevant in the case of post-communist Europe.

Energy poverty symptoms are not all equally visible

Energy poverty, as a particular form of material deprivation, is present in most societies (Bouzarovski and Petrova, 2015; Birol, 2007). Under these circumstances, how can we understand that energy poverty is still lacking recognition in policy and public debates in so many countries? One reason might be the fact that energy poverty is multidimensional (Rademaekers et al., 2016). The evolution of measurement methods (Sareen et al., 2020; Thomson et al., 2017; Hills, 2012) has allowed the dimensions of energy poverty to be captured more accurately. However, the concept of energy poverty is still hard to grasp for policy-makers who have little experience with the issue.

In this section, we will not go into the details of energy poverty measurement methods. Rather, the main argument developed here is that energy poverty is often hard to grasp – for the general public and partially for policy-makers – because some of its aspects remain hidden. Few of the many symptoms of energy poverty are directly visible to stakeholders; the other symptoms need to be measured, or evidence on their existence needs to be collected to make them visible.

Some of the most visible symptoms of energy poverty started being discussed several decades ago. For example, the existence of utility debts has been reported by suppliers for many years, especially since the liberalization of network industries (Graham, 2006. In some countries, such as France, utility debts were not initially labeled as energy poverty. However, suppliers recording increasing levels of debts was a signal that some energy consumers were faced with affordability problems. The issue of utility debts is important for suppliers especially in contexts where energy pricing is modified to better reflect the actual costs of energy supply, as has been observed in many post-communist countries. But when energy prices are widely subsidized or when cross-subsidies between groups of consumers – for example between industry and domestic consumers – limit the impact on the population of price increases, the potential problem of energy affordability may be less visible to policy-makers because these subsidies artificially reduce the scale of energy affordability difficulties of households.

Another visible symptom of energy poverty is household demands for financial assistance when they are unable to pay their energy bills. These symptoms become visible mainly when some assistance schemes are available. Where assistance schemes do not exist, households might be cut off by suppliers, or they drastically ration their energy consumption, which is a more invisible form of energy poverty. Finally, one element that has gained visibility, even among the general population, are accidents such as fires caused by households who have been cut off from their electricity supply. In several countries – for example Germany, Spain, and Bulgaria – such events have created moments when difficulties related to energy poverty have become visible and are publicly debated.

But less visible energy poverty symptoms require the production of information and elaboration of data, either by compiling existing statistics or by setting up dedicated surveys. For example, to estimate excess winter mortality or the share of households’ budgets dedicated to energy, statistical data are used to build estimates of energy poverty symptoms. Other surveys, for example the EU Survey on Incomes and Living Conditions, specifically collect data on elements of energy poverty, such as the inability of households to keep their home adequately warm.

Finally, there is a group of energy poverty symptoms that is often implicitly known, but which is nonetheless hard to identify or measure, either because these symptoms are hard to quantify – for example health impacts – or because they occur in the private sphere of households that are often reluctant to speak about their difficulties. Frequently, households find it easier to talk about their low income than about restrictions they impose on themselves, or about shame, stigma, and social isolation resulting from energy poverty.

The different degrees of visibility of energy poverty symptoms are summarized in Figure 1.2. This figure highlights that most energy poverty symptoms need either to be measured – which requires setting up measurement systems and rules – or to be made visible, through in-depth examination of the relations between energy poverty, health and well-being, behaviors, lived experiences, and perceptions of the quality of life of affected households.

Figure 1.2 Energy poverty symptoms and their visibility.

Source: Author’s analysis.

In the countries of post-communist Europe, the problem of energy poverty might remain hidden if policy-makers focus mainly on its visible symptoms, like utility debts and demands for financial assistance of households. These symptoms are frequently interpreted as a result of poverty in general, or of a lack of affordable energy. In certain cases, policy-makers respond to people’s demands for more-affordable energy by subsidizing energy prices, or by imposing price reductions through political decisions.⁴ Interpreting energy poverty only as a problem of low incomes or of energy affordability has two consequences. First, in terms of remedies, it would imply measures of income support or price reductions for a large share of the population, which is neither feasible nor desirable. Second, interpreting energy poverty as a result of general poverty comes at the risk of missing an important part of the problem of energy poverty, which is lacking energy efficiency of homes and equipment. When Boardman (2010) recommends that “the poorest people should have the most energy-efficient homes,” she insists on that distinction between energy poverty and poverty.

Energy poverty measurements in several countries have shown that there is only a partial overlap between the group of poor households and the group of energy poor households. This confirms that interpreting the visible symptoms of energy poverty simply as a problem of poverty is inadequate. On the other hand, if energy poverty is viewed as a problem of poor housing conditions and of material deprivation, then it becomes clear that the exact nature of the difficulties of households needs to be investigated further. Uncovering the less visible aspects of energy poverty requires for example assessing the extent of difficulties of households in keeping their home warm. It can also include assessments of the lived mechanisms of energy poverty. As shown by an analysis of the European...