Europe’s Energy Poverty Red Zones
Energy poverty is significantly more present in central, eastern, and southeastern Europe, a new report shows. Through the Renovation Wave program, the EU has the opportunity to tackle this problem currently affecting 150 million people across the continent as it increases funding for refurbishing old buildings to improve energy efficiency.
A new report published by the Center for the Study of Democracy (CSD) has shed light on the extent of energy poverty in central and eastern Europe (CEE) and southeastern Europe (SEE).
According to the Energy Poverty Handbook:
“Energy Poverty is commonly understood to be when a person or household is not able to heat or fuel their home to an acceptable standard at an affordable cost. In reality, it covers a very wide set of essential activities. It can occur if people cannot afford to heat their homes adequately, but also to cool them in hot climates. It may mean they cannot afford to cook hot meals, or have reliable hot water for baths and washing clothes or run essential domestic appliances (washing machines, irons, televisions, computers, etc.).”
Although seldom discussed, it is estimated that anywhere between 50 to 150 million people are living in such conditions.
In CEE/SEE, the percentage of households that are “unable to keep homes adequately warm” is significantly higher than those in the rest of Europe with Bulgaria (33.7%) and Lithuania (27.9%) topping the list compared to the EU average of 7.3%,
Another characteristic of energy poverty is having “arrears on utility bills”. The EU average for this is 6.6% but many more households in Greece (35.6%), Bulgaria (30.1%), Croatia (17.5%) and other CEE/SEE countries cannot afford to pay their bills on time.
Energy Poverty in North Macedonia
Energy poverty in North Macedonia is a major problem as a worrying portion of the country struggles to keep their homes adequately warm and/or have problems paying their energy bills. In 2014, more than 40,000 households had issues paying their bills.
In 2018, almost a quarter of the country reported being unable to keep their homes warm. This ranked North Macedonia as the third highest in Europe with this problem.
Why are things so bad in CEE/SEE?
There are a number of factors that contribute to the energy poverty situation in the region.
High rates of homeownership
In the early 90s, with the fall of communism and the disbanding of socialist Yugoslavia, many people were encouraged to purchase the properties they were living in through different “giveaway” privatisation programmes. Thanks to different programs and payment schemes, they were able to buy the houses they had been living in at very low prices.
As a result of this, property ownership in CEE and SEE member states is higher than in many Western European countries. Romania sits at the top of the list with 96% homeownership. In 2019, the homeownership rate in North Macedonia stood at 85.9%. Slovenia has the lowest rate in the region with 67.3%.
The problem is that many of these countries have since struggled economically under current neoliberal economies. So while a large part of their populations own the property they live in, many cannot afford to maintain them and renovate them when needed. As these buildings continue to deteriorate, they are becoming much harder to keep warm or cool and many households struggle to make utility payments month after month.
Energy poverty in rural areas
The report found higher rates of energy poverty in rural areas in the region. Generally speaking, 40-50% of the population in most CEE and SEE countries reside in rural areas (including 42% of North Macedonians).
A report by the European Energy Poverty Observatory in 2019 found double the amount of utility arrears in areas of low population density as well as higher rates of poverty and unemployment. Housing in rural areas often holds very low market value making it financially unviable for people to invest in energy efficiency renovation.
Prefabricated apartment blocks
Between the 1960s and 1980s, there was a boom in the construction of multifamily, prefabricated apartment blocks in SEE/CEE. These particular buildings are known to be highly energy inefficient meaning more energy is required to keep them warm or cool.
Very often, these houses are also locked into a district heating system with no possibility of changing service providers. This leaves residents (often low-income households) powerless to rising prices in a degrading energy system with little to no investment by policymakers.
Energy poverty and Roma communities
An already disenfranchised people, Roma communities were some of the first to lose their jobs and become further socially marginalised during the transition to capitalism in the late 80s and early 90s.
Many Roma live in conditions of extreme poverty, often in buildings that are improvised and/overcrowded with very low energy efficiency. Many of these homes are found in clusters outside of cities or in rural areas with no possibility of connecting to the national energy grid.
With no identification documents and living in housing that is not officially recognised by the state, many Roma have no possibility to access adequate energy or housing schemes.
The EU’s Renovation Wave
As part of the European Green Deal and the EU’s plans to combat the climate crisis, the Union has launched the Renovation Wave programme. 75% of the EU’s buildings are not considered to be energy efficient and buildings (both public and private) are responsible for a third of the EU’s carbon emissions.
Currently, only 1% of buildings undergo energy-efficient renovations every year. Through the Renovation Wave programme, the EU will support renovation projects and hopes to double the rates of renovation in the next 10 years.
13 recommendations to better address energy poverty in Central and Eastern Europe
As part of the report on energy poverty in CEE and SEE, Habitat for Humanity and Center for the Study of Democracy (CSD) put forward 13 recommendations on how the EU can ensure the Renovation Wave Strategy is a success in tackling energy poverty in the SEE and CEE regions.
Stronger Focus on Energy Poverty
The EU needs to oblige its member states to place more focus on energy-poor households through programmes such as the Modernisation Fund and the Recovery and Resilience Facility (RRF).
When allocating funds, the European Commission (EC) needs to ensure that a fair amount is given to areas of energy-poverty including:
In urban areas characterised by a high number of socialist-era prefabricated housing
Marginalised and segregated communities such as Roma
Appropriate Funding Investments are Needed
Funding should go beyond simply financing physical renovations. It should take other things into consideration such as behavioural needs or property ownership. Energy poor and low-income households should be specifically targeted.
A large percentage of low-income households are disconnected from the grid and use solid fuels for heating, making them ineligible for financing schemes. This gap needs to be filled.
Funding for low-income households should be accompanied by large-scale energy audits and energy behaviour advice.
Minor energy efficiency improvements and behavioural interventions should be part of separate or complementary interventions.
Through the Renovation Wave and other funding sources, EU member states should support the upgrade of heaters and boilers in order to prioritise the phasing-out of inefficient and polluting devices.
Buildings require strict minimum efficiency standards but this could be a barrier when it comes to low-income housing. Therefore, funding should be made available specifically aimed at such households.
EU policies need to address energy poverty
An Ecodesign Directive framework is in place to promote efficient devices and to impose stricter standards on solid fuel space heaters. This, once again, works at a disadvantage for vulnerable households. EU legislation needs to be complemented by the right measures and funding to help such households comply.
In order to obtain a better picture of the energy poverty realities and to tackle them appropriately, more detailed and accurate data collection and management on buildings and socioeconomic indicators are needed.
The Commission needs to ensure that member states go beyond current NECPs (National Energy and Climate Plans) and to monitor and control energy poverty. Unfortunately, countries in the CEE/SEE region have largely ignored this part thus far.
The EU’s Renewable Energy Directive should take full advantage of the potential of renewable energy sources and energy communities have to tackle energy poverty.
The EU’s strategies and legislations should place emphasis on local administrations to tackle energy poverty through energy efficiency action, local decision-making, budget allocation, direct access to European funds, and policy innovation.