Energy Poverty in Southern and Eastern Europe: Peculiar Regional Issues

By Maxim, Alexandru; Mihai, Costica et al. | European Journal of Sustainable Development, January 1, 2017 | Go to article overview

Energy Poverty in Southern and Eastern Europe: Peculiar Regional Issues


Maxim, Alexandru, Mihai, Costica, Apostoaie, Constantin-Marius, Maxim, Andrei, European Journal of Sustainable Development


(ProQuest: ... denotes formulae omitted.)

1.Introduction

Over the last decades, households throughout Europe (as well as other economically developed areas of the World) have been observing an increase in living costs. Based on data from Eurostat (2016a), an overall analysis of household consumption expenditures across the European Union (EU) shows a compound annual growth rate of 0.2% (EU-28 weighted average, with prices adjusted for inflation; per capita values are considered) between 1996 and 2012. This figure is the result of several factors, among which we consider to include the diversification of supply, the liberalization of markets and higher incomes.

However, over the same period, household expenditure with "housing, water, electricity, gas and other fuels" has increased at a rate of 1.2%. The figure jumps to 2.4% when considering only expenditure on "electricity, gas and other fuels". The result is surprising considering the fact that per capita demand for such utilities tends to remain stable over time, especially when compared to the consumption of services or various other goods (e.g. recreation). In fact, when looking at total residential consumption of energy over the period 1996-2012, the EU-28 consumption per capita had a compound annual growth rate of -0.6%.

This suggests that the cost of purchasing the energy to insure adequate living conditions in the EU has been rapidly increasing over the last two decades. Chester and Morris (2012) provide empirical evidence to show the link between energy price hikes and market liberalization in several countries across the globe. Furthermore, Fiorio and Florio (2013) demonstrate that a clear connection exists between some energy market reforms (such the privatization of state-owned companies) and an increase in prices within the EU.

Regardless of the reasons behind this phenomenon, it contributes to an increased prevalence of a socio-economic condition that affects households across the Globe: energy poverty (EP), also known as fuel poverty. The problem refers to instances in which households need to spend a disproportionately higher share of their income on energy services. Because it has received increased attention from researchers, the topic has become an integral part in energy market reforms and policies across the EU (Stefan Bouzarovski, Petrova, & Sarlamanovb, 2012; Liddell, 2012). This issue is not directly related to the concept of "poverty", although studies have shown that a strong correlation exists between material deprivation and energy poverty. The current work does not discuss the topic of 'energy poverty' in developing nations, in which case it would refer to a lack of access to modern electricity services.

As part of a previous study, we proposed a new method of measuring EP across the EU. After providing an assessment of EP, we sought to identify potential pressure factors that may lead to a higher level of EP. Some of the proposed variables demonstrated an unexpected relationship with the proposed EP indicator, such as the tenure status being negatively correlated with energy poverty (i.e. countries where people are predominantly home owners suffer from higher EP than countries where the population predominantly rents homes). These results, combined with the specific geo-historical context of Southern and Eastern (SE) European states, encouraged us to pursue a deeper analysis of the particularities of EP in these regions.

Thus, the aim of this paper is to provide an analysis and discussion of the peculiarities of energy poverty in Southern and Eastern EU member states. This is based on reviews of existing literature, a deeper look at the results of our previous cross-country analysis of EP and an analysis of some specific factors affecting poverty and energy poverty in these regions.

In Section 2 of the paper, several methods and issues regarding the measurement and definition of EP are discussed based on existing literature and examples. …

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