An Analysis of Energy Poverty in the European Union

Abstract

Energy poverty is a significant challenge in the European Union (EU), impacting millions of households and undermining social equity during the ongoing energy transition. This study investigates energy poverty using harmonized data from the EU Household Budget Survey (EU-HBS) for the years 2010, 2015 and 2020. We evaluate the quality of the data, measurement methods and policy implications relating to energy poverty. Traditional metrics, such as the inability to keep homes adequately warm, are criticized for their limited reliability. We also analyse alternative expenditure-based indicators, including a modified version of the Low Income High Cost (LIHC) approach. Our results reveal substantial variations in energy poverty across member states, affecting nearly one fifth of the population in countries like France, Germany and Spain. The analysis highlights significant discrepancies in data harmonization, incomplete coverage and methodological challenges that impede cross-country comparisons. To address these issues, we recommend improving the data quality of the current household surveys. Our findings offer valuable insights for policymakers seeking to design effective interventions to alleviate energy poverty and promote equitable energy transitions.

Keywords: energy poverty, EU, HBS, fuel poverty, EU-SILC

JEL Classification: I32, Q48, Q54