• Results of the workshop on 29 May 2017 in the European Parliament
  • Access to energy – a basic social right! How to abolish energy poverty?

  • By Manuela Kropp | 10 Jul 17 | Posted under: Energy
  • Approximately 11% of the population in the European Union suffers from energy poverty or is acutely threatened by it. – A Workshop on energy poverty was organized by the delegation DIE LINKE. in the European Parliament, the Rosa Luxemburg Foundation in Brussels and transform! europe.

    Report by Manuela Kropp, Policy advisor on energy policy to MEP Cornelia Ernst (GUE/NGL), European parliament

    Rising energy costs make energy poverty a growing concern in the European Union, particularly in the context of stagnant or declining imposable incomes. Although there is no common definition on energy poverty, it can be defined as follows: Energy poverty is existent when a person is not able to adequately heat or cool their home at affordable costs.[1]

    Approximately 11% of the population in the European Union suffers from energy poverty or is acutely threatened by it (in 2012, this amounted to 54 million citizens), 16% of the EU population lives in damp, poorly isolated dwellings, and 9% are lagging behind with the payment of bills to energy suppliers.[2] However, only a few Member States collect and publish data on energy poverty and disconnections.

    During the workshop we had invited participants from Bulgaria, Spain, Hungary, Austria and Germany to discuss which specific problems with regard to energy poverty exist at national level, which measures need to be taken to eradicate energy poverty and how to strengthen our network at European level.

    The following speakers participated in the workshop: Cornelia Ernst (GUE/NGL, European parliament), Martin Schirdewan (Rosa-Luxemburg-Foundation Brussels), Maxime Benatouil (transform! europe), Gabriele Zimmer (GUE/NGL, European parliament), Sian Jones (European Anti-poverty Network) replaced by Magda Tancau (European Anti-poverty Network), Georgi Medarov (Bulgaria), Attila Vajnai (Workers Party 2006, Hungary), Maria Campuzano (Alliance against energy poverty, Spain), Eric Häublein (Berlin Energy Roundtable, Germany), Rie Krabsen (EBO Consult, Denmark), Josh Roberts (REScoop Brussels), Pablo Sanchez Centellas (EPSU, Brussels), Jan Laurier (International Union of Tentants), Jean-Claude Simon (transform! europe), Clémence Hutin (Friends of the Earth Brussels), Genady Kondarev (Friends of the Earth Bulgaria), Karl Vogt-Nielsen (Red-Green Unity List, Denmark), Caren Lay (DIE LINKE, Germany), Alejandro Garica (Izquierda Unida, Spain), Christiane Maringer (KPÖ, Austria), Manuela Kropp (policy advisor, European parliament).

    Biographies of the participants

    Programme of the workshop

    The political demands that crystallized in the course of the discussion:

    1. We need a common European definition of energy poverty or an obligation for all member states to submit a national definition of energy poverty in order to monitor the incidence of energy poverty in the different member states.

    2. Data on disconnections must be collected and published by member states.

    3. Access to energy as a basic social right must be defined in the European legislation.

    4. Regulated prices for energy must be maintained and must not be abolished in the course of the reform of the internal market for electricity at European level.

    5. Disconnections of energy supply must be prohibited in the European legislation.

    6. A certain amount of electricity has to be provided to households for free.

    7. Measures to improve the energy efficiency of buildings must be designed in such a way that tenants do not have to fear rising costs for the rent. Funds for energy efficiency measures in buildings should include concrete targets dedicated to support low-income consumers.

    8. Energy grids and energy utilities have to be re-municipalized.

    The challenge is to put the issue “energy poverty” on the political agenda – e.g. energy poverty is mentioned in the European commission’s communication on the European pillar of social rights but is clearly classified as a national issue.[3] Furthermore, a European energy poverty observatory is to be set up by the end of 2017, but it is still unclear what the objective of this monitoring agency is.

    The following member states are particularly affected by energy poverty: Hungary (7.5%), Spain (9.2%), Romania (10.9%), Italy (14.8%), Portugal (19.8%), Greece (27.0%), Bulgaria (37.6%).[4]

    The reasons for the rise of energy poverty are manifold: rising unemployment, rising energy costs, declining real income, cuts in social support services. 119 million people live in poverty in the EU, since 2008 their number has risen by 4.8 million. In addition, the cost of energy supplies has increased by 70% since 2004, following the liberalization of energy markets. People affected by energy poverty often live in poorly insulated buildings and face higher costs for heating or cooling their homes, anyway. But with regard to energy efficiency measures in buildings there is the challenge of “splint incentive”: in 21 Member States, landlords are able to pass on the costs of building refurbishments by increasing the rent to the tenant, so that no financial relief takes place, but on the contrary financially weaker tenants are forced out of their homes (so-called “renoviction”).

    In Bulgaria, for example, there does not exist any definition of energy poverty, although Article 3 (7) of the Directive on the internal electricity market[5] requires Member States to define 'vulnerable customers' with a view to protection from energy poverty and to ensure that there is a prohibition of disconnections in critical times (e.g. during winter) from the energy supply. In 2013, massive increases in energy prices led to nationwide protests in Bulgaria, and today more than half of Bulgarian households have problems to adequately heat their homes. Community energy could alleviate energy poverty, but in Bulgaria it takes 400 working hours to cope with the bureaucratic burden of applying for the installation of a renewable power plant which prevents people from benefiting from renewable community energy.

    The situation in Hungary is similarly problematic, where it is widespread that households spend more than 20% of their income on electricity and gas supplies. The right-wing Hungarian Fidesz-government has stopped publishing data on disconnections making it more difficult to raise public’s awareness this growing concern. Thousands of people die every winter due to inadequate heat supply, 70% of air pollution in winter is caused by heating with waste.

    In Spain the situation is similar, many people are affected by energy poverty – 11% of the population. Each year 7,000 people die because of energy poverty. Approximately 170,000 disconnections annually have been made in recent years.

    In Germany, the average household electricity price has doubled from 14 to almost 30 cents per kWh between 2000 and 2017. The number of electricity disconnections has also risen sharply: from 312,000 affected households in 2011 to 359,000 affected households in 2015. Thousands of threats to implement a disconnection of energy supply were imposed on customers. In Germany, neither the legislator nor the authorities have established a definition of energy poverty. However, by rule of thumb, a household is considered as energy poor if more than 10 per cent of the net household income has to be spent on the energy supply. Specific demands for Germany: the heating cost subsidy must be reintroduced, unjustified rebates for energy costs for industrial customers must be abolished, the electricity tax has to be reduced, and electricity price supervision must be introduced in order to prevent arbitrariness in electricity pricing.

    In Austria, there are neither official figures for disconnections of supply, but the following data can be collected according to individual reports: in November 2007, 2,000 households in Vienna were without gas and electricity supply. In Linz in December 2013, there were 3,100 people without gas, electricity or district heating. In addition, one has to count the households which face deferred payments to their utility.

    Regulated prices in the energy sector must be maintained and not abolished in the context of the revision of the Directive on the electricity market (even if the European Commission has asked for it in its proposal)[6] because the best protection against the vagaries of volatile energy markets are regulated prices. The rising energy prices clearly show that the liberalization of the electricity market 20 years ago was a mistake - there is virtually a market failure. The right to water is now recognized in the public debate, but this holds not true for the right to energy. It must be clear that energy is also a public good, not a commodity and that access to this good is a basic social right.[7]

    The Communist Party of Austria (KPÖ) has developed a concept for a gratuitous energy supply for all households (Energiegrundsicherung EGS). The basic idea is that all households receive a fixedly defined quota of electricity and heat for free. The starting point for this basic reference is the average consumption of a two-person household, which is measured by the Chamber of Labour of Vienna with a living space of 60m2 with 2,200 kWh of electricity and 800 cubic meters of gas. The pricing of the consumption exceeding the rationing rate is progressive, in order to reduce excessive energy consumption. The basic energy supply is funded by the profits of the utilities, as well as the higher tariff for the additional consumption.

    One way of combating energy poverty is the re-municipalization of the grids and energy supply companies. The draft law for the establishment of a municipal utility and a grid company, presented by the Berlin Energy Roundtable (Berliner Energietisch), aimed at the triangle of a democratic, ecological and social energy supply. Municipal enterprises allow for the participation of citizens, an ecological supply of renewable energy and an affordable energy supply for all, whereas the profits remain in the municipality and can be spent for social measures on the ground. However, it is not ensured that an energy supplier in the municipal hand also provides a power supply for all. Therefore, the following measures must be taken at the federal level: introduce a ban on disconnections at federal level, the right to energy to be legally stipulated, introduction of debt counseling for people who are threatened by electricity and gas disconnections, advice on electricity savings, advice on paying by instalments and introduction of social tariffs.

    The example from Denmark on energy co-operatives in the district heating sector shows that decreasing prices for the citizens could be achieved here.

    Energetic building refurbishment is not a technical but a political problem and offers the opportunity to eradicate energy poverty, since 75% of EU buildings are energy inefficient, with total building stock accounting for 36% of greenhouse gas emissions in the EU. The financing of the energetic building renovation is the crux and is the most important obstacle if it is not done. Here we face the problem of “split incentives” – the house owner has to pay for the building renovation, whereby the tenants will benefit from the cost savings. But only theoretically, because in many member states the costs are passed on to tenants through a rent increase – there is a threat of “green gentrification”. Political options are: “green” leases, thus the agreement between tenants and owners to share the costs of energetic building refurbishment. At EU level, we need an ambitious energy efficiency legislation as part of the revision of the Energy Efficiency Directive, which contains rules to combat energy poverty. Access to finance needs to be made easier for households affected by energy poverty: 18 bn. EUR are already earmarked in the European budget for energy efficiency measures, but this is not enough and should be significantly increased. 80% of projects funded by the European Investment Bank (EIB) in the energy efficiency sector are situated in France, Finland and Germany. The Member States in Central and Eastern Europe do not receive funding from the EIB in this area at all although severly affected by energy poverty. Although EIB funding for energy efficiency measures has been increased from € 2 billion in 2013 to € 3.4 billion, the geographic imbalance needs to be abolished.

    The red-green alliance from Denmark developed an urban renewal program, which was developed in co-operation with the national tenant representatives in 2014. It is based on an agreement between landlords and tenants, whereby the landlord has to reduce part of the increased rent after an energetic building renovation (as compensation for the bad condition of the building, for which he is responsible).

    Tackling energy poverty requires transforming our energy systems. Increased energy efficiency, through massive renovation efforts across Europe, and switching to citizen and community-owned renewable energy production have a key part to play to reduce energy poverty. EU policies must ensure people, in particular low-income households, can be part of and benefit from the transition and are not left to foot the bill. All citizens should have access to affordable and renewable energy and energy efficient housing.

    Notes

    [1] Definition by European Anti-Poverty Network, Energy poverty is when a person is not able to heat or fuel their home to an acceptable standard at an affordable cost. (Presentation during workshop on 29 May 2017)

    [2] Greens/EFA, Tamas Meszerics, Handbook Energy Poverty, 2016, S.22

    [4] Leaflet European Public Service Union (EPSU), European Anti-Poverty Network (EAPN), Right to Energy for all Europeans! http://www.eapn.eu/wp-content/uploads/2017/05/EAPN-2017-EAPN-EPSU-energypoverty-leaflet-1138.pdf


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