EU Member states will skim profits from energy companies and redistribute that money to consumers. A break with the past, says Harriet Thomson, a researcher on the phenomenon of energy poverty. Germany, in particular, resisted attempts to Europeanise the approach to energy poverty for years – it even refused to work on a uniform definition. ‘Because then the problem would also be notable on a domestic scale.’
‘This really is a monumental shift.’ Harriet Thomson, associate professor of global social policy and sociology at the University of Birmingham, sees the recent decision to redistribute excess profits from European energy companies to consumers as an impressive turning point in the European Union’s joint energy policy.
‘The promise was that a liberalised energy market would deliver fair energy prices for all. The announcement [of the proposal by Commission President Ursula von der Leyen, ed.] is a tacit acknowledgement that the EU-energy policy has failed to do so. That has always been one of the lines that the European commission has pushed out: liberalisation brings innovation and investment. But it hasn't delivered lower prices. The data really doesn't support that notion.
The changing political stance is also an implicit recognition of the importance of Thomson’s work. For years, she has been trying to convince the Member States of the need to better monitor and address the energy poverty phenomenon. Thomson received her PhD on the subject from the University of York in 2015 and was the Project Manager of an EU-funded research project on energy poverty from late 2016 to 2020.
That project included mapping energy poverty by determining exactly what it is and how to measure it. Because although the term ‘energy poverty’ has been used for years, there is no uniform European definition. The Netherlands hasn’t developed a definition either, so it doesn’t have a clear way of identifying anyone suffering from energy poverty.
At this moment, that shortcoming is reflected in the price cap set by the Dutch cabinet: everyone benefits from it, rich and poor. ‘That’s inevitable in the generic regulation with which we want to offer relief to households and other small consumers as soon as possible,’ Ministers Rob Jetten (Climate and Energy) and Micky Adriaansens (Economic Affairs and Climate) explained in a letter to parliament.
Women tend to feel cold faster
Thomson upholds the definition of fellow researchers Stefan Bouzarovski and Saska Petrova, she explains: ‘We speak of energy poverty when a household is unable to secure a materially and a socially necessitated level of energy services. So what’s part of the definition is the expected living standards in a particular country. and the material aspect: what do you actually need to survive?’
Energy poverty is also partly individual, which makes measuring it even more complicated
According to Thomson, no European definition exists due to stonewalling by some national governments, especially the German one. The EU Energy Poverty Observatory, which Thomson headed, collected four basic indicators that provide an overview of energy poverty in European countries. But even those indicators are lacking. Energy poverty differs somewhat in different countries and for different population groups.
For instance, if you want to determine whether households manage to heat their homes and ask people to fill in a questionnaire on the subject, you still don’t know anything about the underlying causes. As a result, you cannot paint a nuanced picture of the whole of Europe. Perhaps the available heat source is unsuitable, the house is not insulated, or they deliberately heat less to save money.
Energy poverty is also partly individual, which makes measuring it even more complicated. For example, households of single women score higher on this indicator than single men across all countries because women tend to feel cold faster. In short, Thomson says, ‘the data that is now available, are insufficient’.
Back in June 2008, MEPs asked the European Commission to define the term ‘energy poverty’. They also called on the Member States to ‘develop national energy action plans to combat energy poverty’. But the European legislation that Member States agreed to in 2009 only states that the drafting of such an action plan was among the possibilities. It was not mandatory. In 2019, a new law that includes energy poverty did not make it any more compelling: Member States must address energy poverty ‘where identified’.
Isn’t that clause simply a loophole?
‘It definitely is. That happened every round when there was some new legislation being drafted: we would start off with something ambitious and then it just got watered down. That has always been my biggest frustration with all of the legislation that has come out: the wording is always really weak. There are so many loopholes. “Where identified” – that basically provides a good get-out clause. “Oh, well, I don't think energy poverty exists in our country, so we’re not gonna do anything.”’
Member States do want to liberalise their markets and conclude European agreements on that, and they are also willing to set joint climate targets that affect their energy policies. Why hasn’t that happened with energy poverty?
It really comes down to the role of a handful of particularly powerful member states, who just don’t want to have a definition. So when the 2009 legislation was being negotiated, there were efforts to insert a common definition or even just some standardised wording of what energy poverty means. But it consistently came back to Germany blocking it. They have really been quite an important player in this policy landscape and were unreceptive to any kind of any shared definition, because that would make the problem visible on a domestic scale, too.
A lot of the Nordic countries resisted these efforts too, mostly because they felt that they didn’t have a problem there. Their attitude boiled down to “energy poverty doesn't exist here”. It certainly is true that it’s not a big problem in these countries, but it does exist.For instance, there is a very different experience between the rural areas and urban areas. and perhaps that’s a bit of an uncomfortable truth for the N
What about the Netherlands?
‘I don’t recall any kind of major pushback. I mean, I think, they probably did side with the Northern European states, but I wouldn’t say that they played the same role as Germany and really blocked action.’
So the Netherlands weren’t at the forefront of defining and addressing energy poverty, right?
‘No, that prize goes to Spain. They came out with a fairly comprehensive strategy and set targets for alleviating the problem. Central and Eastern European states were also, albeit in varying degrees, in favour of more action and were really pushing for energy efficiency, and for more funding to be available for that.’
The Commission was also reluctant for a long time. The excuse was that it was not within its purview. But during Jean-Claude Juncker’s time as President of the European Commission, the Commission took more interest in the energy poverty phenomenon. In 2016, the Commission made more than 800 thousand euros available to set up a temporary observatory on energy poverty. Harriet Thomson, then working at the University of Manchester, and her colleague Stefan Bouzarovski won the tender.
According to Thomson, the Commission changed its mind at the time because of the EU’s own plight. ‘We had the Eurozone crisis, the bailout of Greece, there was a migrant crisis, the UK referendum on Brexit was approaching – it was crisis after crisis.’ She thinks that the Commission wanted to improve its own reputation and that of the European project. ‘What I’ve heard anecdotally is that addressing energy poverty, and really pushing Member States into energy efficiency mode is a way of showing the added value of the European Union, a real kind of everyday difference of that kind of project to people.’
Only ‘eleven Member States had included in their final plan a national objective to reduce energy poverty’
The Commission under Juncker also managed to bring back the concept of energy poverty as part of the ten-year plans for climate and energy that the Member States were required to submit. A Commission spokesperson disclosed that, of the 27 Member States, only ‘eleven Member States had included in their final plan a national objective to reduce energy poverty and outlined the policies and measures addressing energy poverty’.
That’s not many: eleven Member States.
Maybe, but even eleven Member States is a growth compared to previous years. Then, it was only the UK, Ireland and France who had a strategy. So we’ve grown from three to eleven; that's quite a shift, to be honest. And when you look at it more broadly, there are by now 24 to 25 Member States that actually use some sort of definition in their plansand provide a description of the problem in their country.
Why is it actually necessary to distinguish between energy poverty and poverty in general?
‘Energy poverty goes beyond just having money for the cost of living. There is obviously an overlap between people who are traditionally income-poor and those who are energy poor, but it’s not a perfect overlap. There are people in the middle income group, who are also experiencing quite severe energy issues.
In an earlier research project, we had highlighted something that was a real problem: there are lots of groups that just will never receive support and they don’t fit in the narrative or the public imagination. If you think of someone who is vulnerable, someone who needs support most, you might not think of a 22 year old who is fresh out of university living in a really crappy, but really expensive flat that is really difficult to heat.’
You conducted research on the Member States through the Energy Poverty Observatory. Which findings were notable?
We looked at the statistical data about households that is being collected via the European Union Statistics on Income and Living Conditions ((EU-SILC).One of the items in their questionnaire is whether households encounter difficulties heating their houses. It surprised us that this got quite high rates in Portugal and other Southern states. But indeed, Spain had terrible cold spells last year, very severe periods of cold weather and people there live in houses that are not built for that. There is often no central heating system, they have typically tiled floors, large windows – the worst kind of setup for bouts of freezing temperatures.
What is the problem with the data?
‘We rely on EU-SILC or household budget surveys, but there’s been no actual survey into energy poverty. Those questionnaires do ask whether you’ve been in arrears on your utility bills. But that covers all types of bills and utlities. So it covers gas, electricity, water, garbage collection – anything under the sun gets thrown into that. That makes it very hard to pinpoint which part is energy poverty.
The European Commission has proposed that excess profits from energy companies be redistributed back to consumers. What do you expect from that proposal?
‘The Commission took the easy approach: it just use proxies of vulnerability’
‘A windfall tax is the right direction. it would have been ideal to have some accompanying guidance on that, to set some parameters: who should be targeted for support. The lack of that is disappointing. It’s the easy approach: just use proxies of vulnerability. We often see that existing social welfare benefits are used to identify people for support; people who receive an old age pension, who receive support because they have a severe disability, or i are unemployed. But that way, a lot of working families get completely ignored.’
Your Energy Poverty Observatory was replaced by an Energy Poverty Advisory Hub in 2020. How do they differ?
‘Perhaps they are less critical, we were pushing a bit more for a critical voice. But they are valid in a different way. While we spent a lot of time discussing why the data matters and the ways in which it is actually quite limited, they have moved away from that body of work of definitions and indicators towards on the ground technical assistance. In that sense, it has been quite a shift in priorities.
The evidence repository has disappeared. The network page has disappeared. The indicator dashboard stayed, but that’s a bit buried away now on the EPAH website, in its own subsection. So for us, that was a disappointment.
Did the European Commission explain why some of your work was excluded?
‘No. So we’re not really sure what the reason was.’
You said earlier that you are optimistic, yet at the same time, you are very critical of the Member States and the European Commission. How do you reconcile those contradicting feelings?
Gosh, it’s my daily struggle actually, but I think you have to be optimistic. I keep reminding myself to look at it over the long duration and to see that we have actually come a long way. We’re starting to see a slow movement towards recognising the right to energy, and understand that maybe it should be treated as more of a social good than a privatised commodity. And that's a really complicated one to try and pin down.
There is a huge amount more to do, but we have already seen quite a transformational shift in how the problem is recognised. It is much higher up the policy agenda nowadays.’
Translation: Delia Burggraaf