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Energy Affordability in the EU: The Risks of Metric Driven Policies

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  • David Deller

    (Centre for Competition Policy, University of East Anglia)

Abstract

This paper provides a pan-EU mapping of energy affordability using energy expenditure shares for the first time. Large variations in energy expenditure shares across the EU are identified, with the shares being significantly higher in New Member States than the EU15. These variations indicate that a pan-EU fuel poverty metric is inappropriate. Secondly, household-level data from the UK, France and the Republic of Ireland are used to simulate the impact of policy interventions on the recorded rate of fuel poverty. These simulations highlight that emphasising high-level fuel poverty metrics may distort policymakers’ decisions towards manipulating the ‘picture’ of fuel poverty rather than maximising welfare improvements; policymakers may assist households lying closest to fuel poverty thresholds rather than those most in need. Robust impact assessments identifying the fuel poverty interventions which deliver the greatest welfare increases for a given cost offer a better means of policy evaluation.

Suggested Citation

  • David Deller, 2016. "Energy Affordability in the EU: The Risks of Metric Driven Policies," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2016-09, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2016_09
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    Cited by:

    1. Harry R Kennard & Gesche M Huebner & David Shipworth & Tadj Oreszczyn, 2020. "The associations between thermal variety and health: Implications for space heating energy use," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-12, July.
    2. Ye, Yuxiang & Koch, Steven F., 2021. "Measuring energy poverty in South Africa based on household required energy consumption," Energy Economics, Elsevier, vol. 103(C).
    3. Wagner, Oliver & Wiegand, Julia, 2018. "Prepayment metering: Household experiences in Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 407-414.
    4. Antunes, Micaela & Teotónio, Carla & Quintal, Carlota & Martins, Rita, 2023. "Energy affordability across and within 26 European countries: Insights into the prevalence and depth of problems using microeconomic data," Energy Economics, Elsevier, vol. 127(PA).
    5. Lilia Karpinska & Sławomir Śmiech, 2021. "Escaping Energy Poverty: A Comparative Analysis of 17 European Countries," Energies, MDPI, vol. 14(18), pages 1-16, September.
    6. Llorca, Manuel & Rodriguez-Alvarez, Ana & Jamasb, Tooraj, 2020. "Objective vs. subjective fuel poverty and self-assessed health," Energy Economics, Elsevier, vol. 87(C).
    7. Davillas, Apostolos & Burlinson, Andrew & Liu, Hui-Hsuan, 2022. "Getting warmer: Fuel poverty, objective and subjective health and well-being," Energy Economics, Elsevier, vol. 106(C).
    8. Rodriguez-Alvarez, Ana & Orea, Luis & Jamasb, Tooraj, 2019. "Fuel poverty and Well-Being:A consumer theory and stochastic frontier approach," Energy Policy, Elsevier, vol. 131(C), pages 22-32.
    9. Leitão, João & Ferreira, Joaquim & Santibanez-González, Ernesto, 2022. "New insights into decoupling economic growth, technological progress and carbon dioxide emissions: Evidence from 40 countries," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    10. Marchand, Robert & Genovese, Andrea & Koh, S.C. Lenny & Brennan, Alan, 2019. "Examining the relationship between energy poverty and measures of deprivation," Energy Policy, Elsevier, vol. 130(C), pages 206-217.
    11. Bagnoli, Lisa & Bertoméu-Sánchez, Salvador, 2022. "How effective has the electricity social rate been in reducing energy poverty in Spain?," Energy Economics, Elsevier, vol. 106(C).
    12. Mircea (Mike) Bostan, 2021. "EU Electricity Policy (Im)balance: A Quantitative Analysis of Policy Priorities Since 1986," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 298-309.
    13. Villalobos, Carlos & Chávez, Carlos & Uribe, Adolfo, 2021. "Energy poverty measures and the identification of the energy poor: A comparison between the utilitarian and capability-based approaches in Chile," Energy Policy, Elsevier, vol. 152(C).
    14. Danila Longo & Giulia Olivieri & Rossella Roversi & Giulia Turci & Beatrice Turillazzi, 2020. "Energy Poverty and Protection of Vulnerable Consumers. Overview of the EU Funding Programs FP7 and H2020 and Future Trends in Horizon Europe," Energies, MDPI, vol. 13(5), pages 1-17, February.
    15. Pedro Macedo & Mara Madaleno & Victor Moutinho, 2022. "A New Composite Indicator for Assessing Energy Poverty Using Normalized Entropy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(3), pages 1139-1163, October.
    16. Shahzad, Umer & Gupta, Mansi & Sharma, Gagan Deep & Rao, Amar & Chopra, Ritika, 2022. "Resolving energy poverty for social change: Research directions and agenda," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    17. Cadaval, María & Regueiro-Ferreira, Rosa Ma & Calvo, Santiago, 2022. "The role of the public sector in the mitigation of fuel poverty in Spain (2008–2019): Modeling the contribution of the BonoSocial deElectricidad," Energy, Elsevier, vol. 258(C).
    18. Mircea (Mike) Bostan, 2021. "EU Electricity Policymakers (in) Sensitivity to External Factors: A Multi-decade Quantitative Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 303-314.
    19. Igawa, Moegi & Managi, Shunsuke, 2022. "Energy poverty and income inequality: An economic analysis of 37 countries," Applied Energy, Elsevier, vol. 306(PB).
    20. Dalia Streimikiene & Vidas Lekavičius & Tomas Baležentis & Grigorios L. Kyriakopoulos & Josef Abrhám, 2020. "Climate Change Mitigation Policies Targeting Households and Addressing Energy Poverty in European Union," Energies, MDPI, vol. 13(13), pages 1-24, July.
    21. Wenhao Qi & Changxing Song & Meng Sun & Liguo Wang & Youcheng Han, 2022. "Sustainable Growth Drivers: Unveiling the Role Played by Carbon Productivity," IJERPH, MDPI, vol. 19(3), pages 1-25, January.
    22. Deller, David & Turner, Glen & Waddams Price, Catherine, 2021. "Energy poverty indicators: Inconsistencies, implications and where next?," Energy Economics, Elsevier, vol. 103(C).

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