Energy poverty and vulnerable consumers in the energy sector across the EU: Analysis of policies and measures

Transcription

1 1 Energy poverty and vulnerable consumers in the energy sector across the EU: Analysis of policies and measures Authors: Steve Pye (University College London), Audrey Dobbins (University of Stuttgart), Claire Baffert (KIC InnoEnergy), Jurica Brajković, Ivana Grgurev (EIHP), Rocco De Miglio (E4SMA), Paul Deane (University College Cork) Policy report published April 2015

2 2 What is energy poverty? A definition a situation in which households are not able to adequately heat their homes or meet other required household energy services at an affordable cost. It is a complex challenge. Source: Rademaekers et al. 2016

3 3 The challenge of energy poverty in Europe Estimated ~54 million people in energy poverty, or 11% of European population (EPEE, 2009) However, understanding limited due to diversity of challenge, data availability, differences in definition, low recognition etc.

4 4 Objectives of the research Vulnerable consumers? Energy poverty? Policies and measures? Role of the Commission Use and meaning of concepts Action by Member States Co-ordinated action

5 5 Recognition of vulnerable customers / energy poverty in EC Directives EU Gas and Electricity Directives under the Third Energy Package (2009) Member States shall take appropriate measures to protect final customers, and shall, in particular, ensure that there are adequate safeguards to protect vulnerable customers. In this context, each Member State shall define the concept of vulnerable customers which may refer to energy poverty and, inter alia, to the prohibition of disconnection of electricity to such customers in critical times. Member States shall ensure that rights and obligations linked to vulnerable customers are applied. In particular, they shall take measures to protect final customers inremote areas. Protection of vulnerable consumers further entrenched in the EC Energy Union communication (2015) MS

6 6 Review of definitions used across Member States Vulnerable Consumers Definition type MS no. Receipt of social welfare 14 Range of socio-economic groups (e.g., age, income, health) Energy affordability (low income / high expenditure) 3 Disability / health 4 Not available / Under discussion 1 6 Energy poverty Official definition Ireland, France, UK, Cyprus. Slovakia Definitions under consideration... Austria, Italy, Malta Source: CEER (2013); own review

7 7 Recognising the distinctive nature of these concepts Vulnerable Consumer May include individuals at risk of or in energy poverty, but also a broader group of specific consumers who may be at a disadvantage in the purchasing and use of energy in the electricity and gas retail markets Electricity and gas Short-term curative approach Targets specific disadvantaged groups Main actors: regulator, consumer protection agencies, utilities, government vs. vs. vs. vs. Energy Poverty Commonly understood to describe a situation where individuals are not able to adequately heat or purchase other energy services for their homes and needs at affordable cost (based on review of definitions applied) All forms of energy (+ mobility) Longer-term preventative approach Focus on energy affordability Broader range of stakeholders

8 8 National circumstances and the need for MS subsidiarity and flexibility in Europe-wide approach Market liberalised Gas dominant central heating Mod-high building efficiency Moderate building data Lowest ownership level High elec. prices, mod. Gas prices Energy poverty not recognised in policy Partial liberalisation Highest share of AROPE High share of room heating, avg. central heating High ownership level Low elec prices, high gas prices Energy poverty not recognised in policy Differences across following metrics impact on nature of problems, and potential solutions o Energy supply and use. o Housing condition, type and tenure. o State of market liberalisation. o Energy prices. o Household income & % households at risk of poverty Energy poverty in the EU Steve Pye, Source: FE consumption from Eurostat, 2012

9 9 Recommended Action for the EU Commission (1) The Commission should be more prescriptive role in distinguishing and defining the issues 1. Recognise distinct yet linked issues Vulnerable Consumer Energy Poverty 2. Define vulnerable consumer groups Socioeconomic situation Energy use structure Vulnerability 3. Define energy poverty (but not necessarily the metric) Definition Metric

10 10 Review of policies and measures Increase financial ability of households/ reduce prices Reduce energy consumption Financial Support (20%) 56 measures Consumer Protection (27%) 74 measures Info / Awareness (21%) 58 measures Energy Efficiency (32%) 90 measures

11 11 Review of policies and measures Financial support (welfare support, direct energy payments, social tariffs) o crucial means of short-term protection for vulnerable consumers o largely distributed through the social welfare system to both identify recipients of support and issue payments Energy efficiency interventions o key part of a strategy to address the underlying cause of energy poverty o considerable scope for increased and better targeting o specific incentives needed for targeting fuel poor Information awareness o improves understanding of consumer rights and information on market tariffs o measures on price comparison & transparent billing often found in most liberalised markets. o strong civic society in relation to energy poverty, number of awareness campaigns is higher Consumer protection (disconnections, regulatory controls, improved & targeted information) o focus on vulnerable consumer protection, and dominated by disconnection safeguards o diverse set of measures, primarily coordinated by regulators & energy supply companies o additional measures e.g. codes of conduct, debt protection most prevalent in strongly liberalised markets

12 12 Recommended Action for the EU Commission (2) Expertise Best practice 4. Dissemination of good practice and indicator development Data Indicator development Observatory 5. Support targeting of EE measures Targeting Allocation of Funding

13 13 Clean Energy for All Package This research and other work are important inputs into the recent proposals as they relate to vulnerable customer protection and energy poverty Some notable changes i. Strengthened recognition of identifying and addressing energy poverty as a specific issue (Article 29 of proposal on common rules for the internal market in electricity); also recognised as distinctive from VC protection ii. iii. Amendment of the Energy Performance of Buildings Directive (EPBD) call for targeting of investment on energy poor homes (Article 2) Proposals amending EE Directive strengthen social aspects of energy efficiency by requiring that energy poverty must be taken into account in designing energy efficiency obligation schemes and alternative measures iv. The Commission is setting up an Energy Poverty Observatory (led by University of Manchester) to facilitate good practice dissemination and indicator development, to support Member States in their efforts to combat energy poverty

14 14 Project outputs ypovertyhandbook-online.pdf p?id_article=eufor_378_ Plus featured in forthcoming INSIGHT_E book

15 15 Thanks for listening References CEER. (2013). Vulnerable Consumers Status Review from the Market Monitoring Report. Personal Communication via stakeholder interview. EPEE (European fuel Poverty and Energy Efficiency) (2009). Tackling Fuel Poverty in Europe: Recommendations Guide for Policy Makers. Rademaekers, K., Yearwood, J., Ferreira, A., Pye, S., Hamilton, I., Agnolucci, P., Grover, D., Karásek, J., Anisimova, N. (2016). Selecting Indicators to Measure Energy Poverty. European Commission, Brussels. y%20poverty.pdf

16 16 Overview of key recommendations Broader policy perspective Stronger prescription Improved data 1. Recognise distinct yet linked issues 2. Define vulnerable consumer groups 3. Define energy poverty (but not necessarily the metric) 4. Indicator development & dissemination of good practice 5. Support targeting of EE measures