Overview

Energy poverty is broadly understood as the inability of households to maintain adequate levels of energy services at an affordable cost. Energy poverty has a wide range of negative effects, for example it can lead to energy rationing (both through temperature reduction and partial heating of the home), energy bill debt, disconnection and debt or rationing on other areas of the household budget. Energy rationing and the inability to keep a home warm can lead to unhealthy indoor environments, for instance, low indoor temperatures, damp and mould that all contribute to cardiovascular and respiratory health impacts. Energy poverty has also been linked to negative impacts on social inclusion, educational attainment and mental health. 

According to Eurostat 57 million people can’t keep their home adequately warm during winter, 104 million people cannot keep their homes comfortable enough during summer, 87 million live in poor quality dwellings and 52 million people face delays in paying energy bills.

Energy Poverty can be instigated, among other, by the following factors: (1) Increasing cost of energy (electricity, oil, natural gas etc.); (2) Low household income (unemployment, low-salaries, high costs of living); (3) Energy inefficient homes (buildings not properly insulated, windows and doors without double glazing or with poor air tightness of windows, inefficient heating systems etc.); (4) Lack of access to appropriate energy sources.

Under the Energy Efficiency Directive (2012/27/EU), EU countries must set up an energy efficiency obligation scheme that requires energy companies to achieve yearly energy savings in terms of annual sales to final consumers (Article 7). As such, energy companies need to design and implement measures that help final consumers improve the energy efficiency of their dwellings. A share of measures are required to be implemented as a priority among vulnerable households, including those affected by energy poverty, and where appropriate, in social housing.