Improving access to energy efficiency for the poorest households to combat fuel poverty
While emerging countries are the most affected by fuel poverty, it remains a major problem in developed countries. Generally speaking, 'fuel poverty' refers to the difficulties faced by some households to access sufficient resources to meet their basic energy needs. In the absence of an internationally harmonised definition it is difficult to qualify this phenomenon, which is understood differently in each country. To quantify it, it is common practice to identify the households which spend at least 10% of their income on their energy bill.
In Europe, between 50 and 125 million people are directly affected by fuel poverty, according to data from the BPIE (Buildings Performance Institute Europe) [1]. In France, the figures are just as devastating: 12 million people affected, representing 3.8 million households, according to figures from the OEI (Observatoire de l’Industrie Électrique) [2]. While the numbers vary by country, an overall trend has emerged. Effectively, the poorest households are also the most vulnerable to fuel poverty. Such an observation calls for a global response from public authorities, specialised bodies and all players involved in the energy market.
As the French Ministry of Ecology, Sustainable Development and Energy is calling for public projects to fight against fuel poverty, it is time to take a look at the current situation in developed countries in order to grasp what to do next.
Voluntary initiatives to be continued
The consequences of fuel poverty on the environment, the financial situation and the overall health of individuals are multiple and often cumulative. The RAPPEL (Réseau des Acteurs de la Pauvreté et de la Précarité Énergétique dans le Logement) association thus focuses on the financial consequences that a situation of fuel poverty entails for households. These households can be forced to sacrifice other essential budget categories, such as education or food, in order to have adequate heating. Likewise, studies tend to show the negative effects of this situation on health, thus drawing a direct link between fuel poverty and respiratory and cardiovascular diseases, as well as depression. Another point of concern is that fuel poverty brings into play the issue of household safety. People are forced to turn to alternative means such as kerosene heaters in order to keep warm, leading to an increased risk of fire and carbon monoxide poisoning. In a broader perspective, environmental consequences are also a reality. Fuel-poor dwellings systematically suffer from significant energy waste and create CO2 emissions which are substantially above average.
Over the past several years, public authorities have become aware of this phenomenon and have been trying to remedy it via policies favouring the most vulnerable households. The ADEME (Agence De l’Environnement et de la Maitrise de l’Énergie) highlights that the people that are most affected by fuel poverty are often also facing financial difficulties. A study in 2008 found that the 5 million most disadvantaged French households spent at least 15% of their resources on energy expenses, compared to 6% for the most well-off. Fighting against fuel poverty is therefore logically one of the major points in the law on the energy transition for green growth, which sets the objective of a 15% reduction in fuel poverty by 2020 [3] by renovating 500,000 dwellings. Legal recognition of this situation is clearly a step forward, and shows a beneficial sense of awareness. However, extensions are essential in order to more broadly combat fuel poverty. The French government has already attempted to implement various types of solutions in the past. In 2009, in the context of a working group on fuel poverty, an 'energy voucher' system was put in place for low-income households. This system is still in place. Likewise, via tax or incentive measures, the State has also largely encouraged the energy efficiency renovation of buildings. In 2010, more than 1.25 billion euros were thus set aside for a renovation plan via the creation of a national fund devoted to this problem.
However, despite the ambitious objectives, it seems that the public authorities are struggling to address these issues. New responses could therefore be considered, in particular encouraging professionals in the energy efficiency sector to join in the fight against this type of hardship.
Energy efficiency: a possible response to fuel poverty
Energy prices, which are too high for a segment of European households, coupled with low income in these households and poor overall housing quality, are the main causes of fuel poverty. In the short term, regulating energy prices or increasing income for poorer households could help combat fuel poverty. In the longer run, renovating buildings with energy efficiency solutions can make it possible to overcome the systemic issue of dwelling quality. With suitable insulation methods, energy waste is lower, resulting in non-negligible savings for the household and greater energy comfort. The difference in energy consumption is sizeable between more recent buildings with a reinforced insulation system and older ones: the former have an average consumption of 50 kWh/m², compared to 200 kWh/m2 in the latter [4]. The roof is most commonly the most susceptible element of the building, with energy loss that can reach 30%. The walls can represent a 20-25% loss, and windows from 10-15%.
Energy efficiency solutions can provide a global, sustainable response to the least energy-efficient dwellings with the possibility of receiving public assistance for those with the most limited means, or incentives to encourage the renovation of habitations. Likewise, the use of energy-efficient appliances leads to an overall reduction in energy spending, with better performance. While certification assessing the overall energy consumption of electrical appliances has been mandatory since 1994, older, energy-intensive appliances remain in use in homes. These are an energy burden on households with limited means, which do not always have the resources to replace them. Still, obstacles remain in the way of the implementation of large-scale energy-efficient building renovation policies. The large number of people that are directly affected, the numerous factors contributing to a situation of fuel poverty, and the difficulty of locating and precisely quantifying the households which are directly fuel poor make the task difficult.
General awareness by energy policy players is necessary in order to effectively address these challenges, and move to promoting energy efficiency solutions.
[1] BPIE (2014): fuel poverty mitigation through energy efficiency in buildings
[2] OIE (February2016): La précarité énergétique – note pédagogique
[3] Article 3 - French law no. 2015-992 dated 17 August 2015 on the energy transition for green growth
[4] Améliorer l'efficacité énergétique de son logement à travers l'isolation : les points clefs, Blog Energie 3,0, published on 22/06/2012
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Our infographics on fighting fuel poverty in developed economies
