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Winter 2018 European Energy Innovation 33
ENERGY POVERTY
Figure 2: http://www.eemg-mediators.eu/downloads/Paper_on_Energy_Poverty_-_May_2017.pdf
employment, social security systems, is problematic. Even though such measures through the bill,
climate, electricity consumption, network costs are largely fixed, as costs are distributed among
home insulation, energy retail prices they are regularly charged based on consumers regardless of their ability
and so on. Thus, it is more efficient consumption. With technological to pay. We must transition to using
to tackle the issue locally, in line with developments, like distributed financing tools which leverage
the principles of subsidiarity and generation, storage, or electro- private investment such as Energy
better regulation. mobility, consumers use less Performance contracts (EPC), Energy
electricity from the grid. Thereby Saving Agreement (ESA) or on-bill
Second, governments should be they do not contribute to the system repayment.
aware that increasing taxes and through tariff payments. Eventually,
levies on electricity does not combat those costs will be supported by a Last but not least, customers having
energy poverty. Consumers’ bills smaller consumer base – including energy debts are likely to struggle to
should reflect, as much as possible, by those not willing or not able to pay for other essential services too
the market-based cost of electricity invest in such technologies – though (e.g. housing, food, etc.). Therefore
and should not finance other an effective increase of their tariff a wider social policy is the best
policies. Besides, with the progressive payments. To reverse this trend, mechanism to tackle the root causes
decarbonisation of electricity, a higher regulated costs should be charged of debt, including energy debts.
uptake of electrical solutions should in an efficient way, progressively Considering the progressive nature
be encouraged, not discourage. One removing cross-subsidisation. of taxation, using social policies and
way to do so would be to opt for State budget would also allow for a
burden sharing: by spreading the Fourth, energy efficiency is key to fair burden-sharing, as people would
costs of decarbonisation to other alleviate energy poverty. However, pay depending on their income and
energy sources according to their it is not sustainable to finance not consumption. l
carbon footprint.
Sébastien Doligé
Third, the way network charges and
levies are charged to consumers
[1] More recent data should be available in the
3rd version of the European Commission’s energy
prices and costs report, expected by the end of
the year.
[2] See “Energy Poverty – A Eurelectric position
paper”, April 2017
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