In 2020, 36 million Europeans (8% of the EU population) were unable to adequately warm their home. The problem of energy poverty is expected to exacerbate after the war in Ukraine and the subsequent energy crisis it has caused.
Energy poverty is mostly the outcome of three factors: low income, high expenditure on energy (as a percentage of disposable income), and low energy efficiency of buildings. Those unable to meet their energy needs are forced to live or work in an unsuitable environment, putting their health first and also their productivity at risk. At the same time, those below the energy poverty line face higher rates of mortality, morbidity, and increased psychological stress, burdened by the inability to pay utility bills.
As energy poverty is a multifaceted phenomenon, there is no single indicator. The Energy Poverty Advisory Hub uses a composite index consisting of four main parameters: (a) inability to pay utility bills, (b) low energy expenditure, (c) high share of energy expenditure in disposable income, and (d) inability to keep home adequately warm.
The graph shows the percentage of the population who cannot pay their utility bills on time and the percentage who cannot keep their home sufficiently warm across the EU (data refer to 2018). Greece scores a negative lead regarding utility bills since 35.6% of the population delay their payment (the corresponding percentage in the EU is 6.6%), while with 22.7% of the population unable to keep its home sufficiently warm, our country is placed in third place behind Bulgaria (33.7%) and Lithuania (27.9%).
To mitigate the negative impact of energy poverty, supporting the income of vulnerable households is a necessary measure, but it only addresses the problem in the short term. Medium-term measures are linked to the energy efficiency of buildings and are supported by the Recovery and Resilience Fund. In particular, Renovate (Energy efficiency, building renovation, construction/housing, climate policy, social policy, resource efficiency, circular economy, renewal urban areas) component under the Green Transition pillar of the Greek National Recovery and Resilience Plan aims exclusively at the renovation of residential, commercial, industrial and public buildings, prioritizing the treatment of energy waste and poverty.
Evidently, Greece is facing a widespread problem of energy poverty which will undoubtedly worsen with the spike in energy prices as a result of the energy crisis. The following winter is expected to be extremely difficult as prices will remain high and Europe’s energy sufficiency will be called into question. General price subsidies should be avoided: they encourage reckless consumption (even by wealthy consumers), waste resources, and add to the deficit. Targeted income support to vulnerable households is needed, combined with investments in the energy efficiency of buildings, to reduce energy poverty as well as energy waste.