7. Energy poverty

A. Energy sufficiency as a fundamental premise for decent living conditions

Both energy poverty as well as the need for solutions to the problems that it causes pose a global challenge.

The pandemic as well as the ever-increasing rental costs have intensified a long-standing problem caused by the combination of high energy costs, low household income and high energy consumption due to the houses’ low energy efficiency (partial or total lack of insulation, old window frames and electrical installations).

Millions of people across Europe were not able to heat their homes sufficiently in the winter of 2021-2022, when the latest energy crisis broke out, due to rising gas, heating oil and electricity prices, combined with successive increases in the cost of essential consumer goods.

Although there is no common definition for energy poverty as a phenomenon, the European Union has acknowledged that it’s a critical issue with a negative impact that translates into serious health problems, deprivation and social isolation.

Likewise, it is estimated that the increase in average temperatures and the greater frequency of heat waves due to the climate crisis, will increase the need for cooling (summer energy poverty) across the country during the summer.

High energy consumption is linked to one of the main causes of the climate crisis: the burning of fossil fuels in order to generate electricity. Therefore, since energy poverty is a multifaceted phenomenon, it should be addressed through an appropriate combination of social, energy and environmental policies, aiming to promote sustainable urban development.

B. Greece ranks 5th in energy poverty among EU countries

Energy poverty is the households’ exclusion or inadequate access to energy services such as heating, cooling and lighting, which has adverse consequences to their health and well-being as well as to the environment. However, scientists researching this phenomenon still haven’t agreed on a common definition of the term.

According to the EU Energy Poverty Observatory, more than 54 million households in Europe (i.e. 11% of the total EU population) are experiencing energy poverty and its consequences.

In 2020, 17.1% of Greek households were unable to keep their homes adequately warm, following Bulgaria (27.5%), Lithuania (23.1%), Cyprus (20.9%) and Portugal (17.5%) while the EU average was 8.2%. Therefore, Greece ranks 5th in energy poverty among EU countries.

According to data from the Hellenic Statistical Authority (ELSTAT) in relation to three key energy poverty indicators, in 2020 in Greece 17.1% of households (39.1% of poor households)) were unable to afford adequate heating, 28.2% (50.1% of poor households) stated that they had difficulty in making timely payments of utility bills, such as electricity, water, gas, etc.

12.5% (20.3% of poor households) live in dwellings with leaking roofs, damp walls, floors, foundations or rotten window frames. The European (EU27) corresponding averages are 8.2%, 6.3% and 14%. Therefore, it’d be accurate to conclude that in some cases, even if the concept of energy poverty is not synonymous with income poverty, the two are often linked.

According to study research on the impact of energy poverty on people’s health, cited in the Heinrich Böll Foundation study, 1% to 2.7% of the deaths recorded annually in Greece, as well as 2.7%-7.4% of cardiovascular diseases and 3.1%-8.5% of respiratory infections treated by Greek hospitals, are due to energy poverty. The indicator of increased mortality is directly linked to severe weather events and, therefore, to particularly low or high temperatures within people’s homes.

In the case of the municipality of Athens in particular, there is a significant geographical dispersion of abandonment and low energy standards of buildings, poverty and reduction of electricity consumption.

However, there are smaller or larger areas where the problems are particularly acute. One zone that stands out is the one including parts of the historic centre of Athens and the areas to the north of it (Patissia, Sepolia, Kypseli, etc.). This zone is home to low-income groups and run-down buildings, there is a significant reduction in electricity consumption, while the possibility of accessing cheaper energy through the natural gas network does not seem to be decisive.1

C. Is the energy crisis the result of “just” the international price spike?

The lack of a commonly agreed definition of the issue at a European level impedes an accurate mapping of households and citizens living in or at risk of energy poverty, thus making it harder to develop effective strategies to tackle it.

Energy poverty is a pressing issue that is affected by the complex interaction of the increase in energy prices, the inability of people to pay their bills, the households’ stagnating or decreasing available income, the high unemployment levels and the slow rate of energy efficiency upgrades in residential buildings which has a well-documented negative social, environmental and economic impact.

In the Ministry of Environment and Energy’s Long-Term Strategy for the Building Stock Renovation, issued in 2021, it was stated that approximately 40% of final electricity consumption in Greece is due to building uses, of which 95.4% are residential. A report published on the Energy Sector in Greece by the Foundation for Economic & Industrial Research (IOBE) and DiaNEOsis, similarly concluded that the residential sector absorbed 32.8% of final electricity consumption in 2018, second only to the services sector at 34.9%.

According to the Ministry of Environment and Energy’s strategy plan, “Over half of the residential houses in the country (55.7%) were built before the 1980s, that is prior to the implementation of the Buildings’ Thermal Insulation Regulation, and therefore do not include thermal insulation, thermal protection and appropriate thermal bridging”. “42.7% were built until 2010 and therefore only had to have partial thermal insulation systems installed, and only 1.6% were built after 2010, that is after the Energy Performance of Buildings Directive was implemented”.

The inability to invest in property maintenance/ repairs, the extremely limited supply of new housing during the 10 years of economic recession, as well as the difficulty that lower income households faced regarding access to the “Energy Saving at Home” programme, have contributed to the perpetuation of these inequalities.

The price surges that occurred during the winter of 2021-2022 brought unsustainable increases in electricity and heating costs, thereby affecting households even further. According to ELSTAT data concerning the most significant price changes from January 2020 to January 2021, electricity costs increased by 56.7%, heating oil by 36% and natural gas by 154.8%.

Finally, the restrictive measures imposed as a result of the COVID-19 pandemic, have had a significant impact on energy needs. 75% of people are now spending more time at home, 60% increased their use of electrical appliances, 40% increased their use of heating by an extra 1-5 hours per day, 45% experienced changes in their employment status, while 50% saw their income decrease.

D. The necessary key steps to highlight and tackle the energy poverty issue

The new provisions included in the Clean Energy for All Europeans package present how to tackle energy poverty at EU level in a more comprehensive and coherent way besides pricing or social welfare measures.

In Greece’s case, three important steps are the monitoring of energy poverty, the National Strategy and Action Plan, and the energy upgrade of the building stock.

Monitoring

A key requirement is the development of common tools for identifying and monitoring energy poverty. The European Energy Poverty Observatory is part of the Commission’s efforts to address energy poverty in all EU countries, proposing, inter alia, four different primary indicators 2 to define energy poverty as well as secondary indicators and other housing-related data.

Similarly, in Greece, it is important to implement and enhance the role of the National Energy Poverty Observatory (EPEF), with measures such as its establishment as an independent institution, ensuring sustainable funding and staffing, etc. The statutory purpose of the EPEF is to raise awareness among the public and policy makers on energy poverty in Greece. Unfortunately, since 2014, it has not been active judging by the fact that its database hasn’t been updated.

National Strategy and Action Plan

In September 2021, the National Action Plan to tackle energy poverty was completed. Indicatively, it includes concessional tariffs, subsidies or power benefits, energy audits, awareness and educational campaigns, the provision of favourable conditions in energy upgrade subsidy schemes, the promotion of actions for the relief of vulnerable households, support for the creation of Energy Communities that would use Renewable Energy Sources, etc.

Greece has set specific quantitative goals to reduce energy poverty by 50% by 2025 and by 75%, by 2030.

Although the effort to tackle energy poverty is not organised or systematic, there are some policy measures that can somewhat help the most vulnerable groups. These include the implementation of the Social Domestic Tariff (SDT) as well as special consumer protection measures, such as a minimum 40-day deadline for settling energy bills, the possibility to pay in interest-free instalments, the lifting of the supplier’s right to demand a power-cut order for overdue electricity bills, and the subsidy for heating oil and gas.

Building stock energy upgrade

As stated in the strategic documents of the European Union, energy poverty and the increased cost of access to energy resources cannot be addressed only by subsidising the energy needs of households but should be accompanied by the reduction of energy needs, mainly through the substantial energy upgrading of the housing stock.

In its National Energy and Climate Plan (NECP), Greece has set a target to reduce final energy consumption by 38% by 2030, compared to 2017, across all economic sectors.3 In this context, targets have been set for the renovation and replacement of residential buildings with new ones with near-zero energy consumption, a policy that aims to both stimulate the construction sector and provide significant economic and operational benefits to households by upgrading their living conditions. More specifically, the goal is to upgrade an average of 60,000 buildings or building units per year to achieve the deep renovation of 12-15% of all dwellings by 2030.

An essential tool for the energy upgrade of the housing stock is the “Energy Saving at Home” programme, which has been implemented since 2011 and, according to data from the Ministry of Environment and Energy (YPEN), has contributed to the energy upgrade of 128,500 homes over the last decade.4 Although the programme is designed to provide more favourable conditions for low-income households, its implementation so far shows that it cannot address the energy poverty issue that the most vulnerable groups are facing, since there are significant structural hurdles, such as lack of own resources, bureaucracy, poor credit scores, insufficient access to information and technical expertise, while vulnerable tenants are also affected by the subsequent increase in rental costs.5

More specifically, in the most recent funding cycle of the “Energy Saving at Home II” programme, households with an annual family income of less than €20,000 per year are subsidised up to 70% for energy saving interventions. However, a very large share of people belonging in the first two income categories of the programme, find it difficult to meet its requirements. Moreover, as a study on the spatial and social footprint of the 2015 Energy Saving at Home Programme revealed, the spatial distribution of funds and the average subsidy amount show an advantageous concentration in middle and upper-middle class areas.6

What is needed, therefore, is a comprehensive policy that would combine the goals of energy upgrading (energy saving and renewable energy sources), with goals of increased access to adequate and affordable housing, and overall improvement of living conditions. This policy requires the development of mechanisms at a local level 7 to provide technical, legal and financial support to vulnerable and economically disadvantaged populations, so that they can equally participate in the green and energy transition with social justice.