The EU Fuel Poverty Toolkit: an
introductory guide to identifying and
measuring fuel poverty
Harriet Thomson, University of York
November 2013
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Contents
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1. Introduction
Fuel poverty is a term used to describe when a household is unable to afford
the most basic levels of energy for adequate heating, cooking, lighting and use
of appliances in the home.
The consequences of fuel poverty include a restricted use of heating, cold and
damp homes, debts on utility bills and a reduction of household expenditure on
other essential items. In addition, fuel poverty is associated with a wide range
of physical and mental health illnesses, such as depression, asthma and heart
disease.
This introductory guide is designed to help advice workers, practitioners,
researchers and other interested parties new to the topic of fuel poverty to
understand what the phenomenon is and how it can be identified and
measured.
In the following sections (2 and 3), the guide will discuss what causes fuel
poverty and provide an overview of the symptoms, whilst sections 4 and 5 will
discuss the prevalence of fuel poverty across Europe and how to measure it.
As this guide is not intended to be an in-depth manual, the final sections
provide recommendations for further advanced reading and useful websites.
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2. What causes fuel poverty?
The main cause of fuel poverty is an interaction between high energy bills, low
income and poor energy efficiency, as depicted in the figure below.
However, fuel poverty is multi-dimensional and reflects many situations, such
as being in arrears on utility bills, living in a damp home and/or being unable to
maintain adequate warmth. In addition to the three causes listed above there
are many other potential determinants, including:
High energy bills
Poor energy efficiency
Low income
Tenure – renters may be particularly vulnerable
Dwelling type
Additional energy needs – for example, disabled households and
households containing young children may require the heating to be
on for longer and at a higher temperature than other household types
Living in a rural area that is not connected to mains electricity/gas
Under-occupancy
Lack of savings
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3. Signs of a household in fuel poverty
Households that are fuel poor are unlikely to identify themselves as living in
fuel poverty, particularly as it is a stigmatising term.
Instead, fuel poverty should be identified using proxy indicators. Common
signs of a fuel poor household include:
Household struggling to pay energy bills
Property cold when visited
Obvious lack of heating system
Household living in one room or area of the house
Condensation, damp and mould present in the house
Household spending more time in warm public areas, such as
shopping centres or libraries, during cold weather
Reluctance to have visitors
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4. Measuring fuel poverty: best practices
In terms of measuring fuel poverty for monitoring purposes, there are two main
methods that can be used:
1. Expenditure method
The expenditure approach is the most commonly used method of measuring
fuel poverty, and is used for national statistics in the United Kingdom and
Republic of Ireland.
Broadly speaking, under an expenditure definition a household is considered
fuel poor if they spend more than X% of their income on all energy in the home
for heating, hot water, cooking, lighting and appliances.
However, whilst this method seems simple in theory, it can be problematic in
practice and requires consideration on a number of topics, such as:
The latter point concerning median and mean expenditure is sometimes
overlooked, but is important as fuel expenditure is asymmetrically distributed.
Whether to use an absolute expenditure threshold, such as the UK’s
previous 10% line, or to use a relative threshold such as twice-
median expenditure
If energy expenditure will be modelled to estimate how much
households should be spending to achieve an adequate standard of
living, or if actual household expenditure data will be used
How to measure household income – for example, should disability
related benefits be classified as income? Should income be
equivalised to account for household size?
The use of median or mean energy expenditure figures
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The use of the mean can provide misleading results as it gives weight to
atypically high values, whereas medians smooth out extreme values and are
particularly useful for comparative research.
In terms of energy expenditure thresholds, it is important to note that the
United Kingdom’s previous 10 per cent fuel poverty line originated from a
calculation of twice-median expenditure, and referred to required household
expenditure rather than actual expenditure. Replication of the UK’s 10 per cent
fuel poverty line should be carried out with caution.
The distinction between actual and required energy expenditure is significant.
Research from the UK has shown that fuel poor households often spend far
less on energy than is necessary to achieve adequate warmth, lighting etc.,
which is why the UK government models required energy expenditure.
However, whilst required energy expenditure allows a more accurate
assessment of fuel poverty to be made, the detailed housing stock data used
in the modelling is unavailable in many countries. In this situation, actual
household expenditure can be used as a substitute, but researchers should be
aware of the risk of underestimating the number of fuel poor households.
Where possible, actual expenditure data should be cross-referenced with
other indicators, such as whether the household can afford to heat their home
and/or pay their utility bills on time, in order to identify under-spending on
energy.
To find out more about measuring fuel poverty using expenditure data, see
Boardman (2010) and Hills (2012) in the Further Reading section.
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2. Consensual method
Some researchers advocate the use of consensual indicators to measure fuel
poverty, whereby households are judged to be fuel poor if they fail to achieve
a minimum standard of living.
Instead of focussing on income and expenditure, consensual indicators tend to
ask households to make subjective assessments of their ability to maintain an
adequately warm home and pay their energy bills on time. Consensual
indicators also ask objective questions about the condition of the home.
Examples of consensual survey questions are shown below:
A key advantage of the consensual method is that it can be less complex to
collect consensual data than expenditure data. In addition, consensual
indictors have the potential to capture the wider elements of fuel poverty.
However, consensual fuel poverty indicators have been criticised for their error
of exclusion, whereby households do not identify themselves as fuel poor even
Do you have any of the following problems with your dwelling /
accommodation? A leaking roof, damp walls/floors/foundation, rot in
window frames or floor
Dwelling equipped with air conditioning facilities? (EU SILC 2007
housing module)
Dwelling comfortably cool during summer time? (EU SILC 2007
housing module)
During the cold winter weather, can you normally keep comfortably
warm in your living room? (English Housing Survey)
How easy or difficult is it for you to meet your heating/fuel costs?
(English Housing Survey)
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though they may classified as being in fuel poverty under other measures. In
addition, a comparison of the expenditure and consensual methods in the UK
and France has shown that different populations are classified as fuel poor,
with only a small degree of overlap between the methods. To identify and
control for these errors, subjective indicators should be cross-referenced with
objective questions concerning the energy efficiency and condition of the
home, and where possible, the indicators should be compared with
expenditure data.
However, the 2007 one-off module from the EU Statistics on Income and
Living Conditions has been the only survey to ask households if they are able
to keep comfortably cool and if they have air conditioning. Consequently there
is limited data available. Nevertheless, the recent heat waves across Europe
are a strong argument for using cooling related indicators in the measurement
and analysis of fuel poverty.
A relatively recent development in
consensual fuel poverty research has
been the recognition of ‘summertime
fuel poverty’, with some researchers
arguing that fuel poverty should
include cooling related difficulties
during the hot summer months, as
well as heating difficulties during cold
winter months.
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5. Fuel poverty in Europe
At present, consensual indicators from the EU Statistics on Income and Living
Conditions are the only standardised data available to measure pan-European
fuel poverty as expenditure micro data does not yet exist. The most recent EU
SILC data shows that fuel poverty is prevalent across the EU, particularly in
Central, Eastern and Southern Europe:
However, despite evidence of the existence of fuel poverty across Europe,
national policy responses have been limited with only three national level
definitions of fuel poverty, in the United Kingdom, Republic of Ireland and
France.
Policy responses at the EU level have also been limited, with no specific policy
package to address fuel poverty. European Council Directives 2009/72 and
2009/73 both acknowledge fuel poverty exists and mandate Member States to
“define the concept of vulnerable customers which may refer to energy
poverty”. However, no guidance or definition of a vulnerable customer or fuel
poverty is provided, which has led to a fragmented approach to addressing
fuel poverty across Europe.
In 2011, 9.8% of households in EU27 and 15.8% of households in the
12 new Member States could not afford to heat their home adequately
(EU SILC 2011).
8.8% of EU27 households and 17.1% of households in the 12 new
Member States were in arrears on their utility bills (EU SILC 2011).
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6. Further reading
The list below contains suggestions for advanced reading on the topic of fuel
poverty policy and measurement.
Boardman, B. (2012) Fuel poverty synthesis: Lessons learnt, actions
needed. Energy Policy, 49: 143-148.
Boardman, B. (2010) Fixing Fuel Poverty: Challenges and Solutions.
Earthscan, London.
Bouzarovski, S., et al. (2012) Energy poverty policies in the EU: a critical
perspective. Energy Policy 49: 76–82.
Brunner, K-M., et al. (2012) Experiencing fuel poverty. Coping strategies of
low- income households in Vienna/Austria. Energy Policy, 49: 53–59.
Council Directive 2009/72/EC of 13 July 2009 Concerning Common Rules
for the Internal Market in Electricity and Repealing Directive 2003/54/EC.
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0055:0093:EN
Council Directive 2009/73/EC of 13 July 2009 Concerning Common Rules
for the Internal Market in Natural Gas and Repealing Directive 2003/55/EC.
http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0094:0136:en:
Dubois, U. (2012) From targeting to implementation: The role of
identification of fuel poor households. Energy Policy, 49: 107-115
EPEE (2009) Definition and Evaluation of fuel poverty in Belgium, France,
Italy and the United Kingdom. http://www.fuel-
poverty.org/files/WP2_D7_en.pdf
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European Commission (2010) Commission Staff Working Paper: An Energy
Policy for Consumers. European Commission, Brussels.
European Economic and Social Committee (2011) Opinion of the European
Economic and Social Committee on ‘Energy poverty in the context of
liberalisation and the economic crisis’ (exploratory opinion). Official Journal
of the European Union, C 44/53
Healy, J.D. (2004) Housing, Fuel Poverty and Health: A Pan-European
Analysis. Ashgate: Aldershot
Hills, J. (2012) Getting the measure of fuel poverty: Final Report of the Fuel
Poverty Review. CASE Report 72, London
Househam, I., and Musatescu, V. (2012) Improving Energy Efficiency in
Low-Income Households and Communities in Romania: Fuel Poverty Draft
assessment report. United Nations Development Programme, Romania
Liddell, C., Morris, C., McKenzie, S.J.P. and Rae, G. (2012) Measuring and
monitoring fuel poverty in the UK: National and regional perspectives.
Energy Policy, 49: 27-32
Moore, R. (2012) Definitions of fuel poverty: Implications for policy. Energy
Policy, 49: 19-26
Plan Bâtiment Grenelle (2009) Groupe de travail Précarité énergétique
Rapport. http://www.plan-batiment.legrenelle-
environnement.fr/index.php/actions-du-plan/rapports.
Thomson, H. and Snell, C. (2013). Quantifying the prevalence of fuel
poverty across the European Union. Energy Policy, 52: 563-572.
Tirado Herrero, S. and Ürge-Vorsatz, D. (2012) Trapped in the heat: A post-
communist type of fuel poverty. Energy Policy, 49: 60-68
Tirado Herrero, S. and Ürge-Vorsatz, D. (2010) Fuel Poverty in Hungary: A
first assessment. Central European University, Hungary
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7. Useful websites
Pan-European
ACHIEVE, Action in low-income households to improve energy efficiency
through visits and energy diagnosis
CECODHAS Housing Europe, European Federation of Public, Cooperative
& Social Housing
Citizens' Energy Forum - European Commission
Coalition for Energy Savings
EC-LINC, Energy Check for Low Income Households Energy Cities Energy Community EU Fuel Poverty Network EuroACE, The European Alliance of Companies for Energy Efficiency in
Buildings EurActiv European Council for an Energy Efficient Economy European Energy Network European Fuel Poverty and Energy Efficiency
Austria
Austrian Institute for Sustainable Development
France
ADEME, Agence de l'Environnement et de la Maîtrise de l'Energie
ANAH, Agence Nationale de l'Habitat
CLER, Réseau pour la transition énergétique
Club de l'Amélioration de l'Habitat
Fédération Nationale des Centres PACT-ARIM
Fondation Abbé Pierre pour le logement des défavorisés
Fondation de France
HCPLD, Haut comité pour le logement des personnes défavorisées
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ONPES, Observatoire nationale de la pauvreté et de l'exclusion sociale
Réseau RAPPEL, Réseau des acteurs de la pauvreté et de la précarité
énergétique dans les logements
Hungary
Energiaklub
Ireland
Energy Action
Spain
Asociación de Ciencias Ambientales (ACA)
Ecoserveis
United Kingdom
Association for the Conservation of Energy
Centre for Sustainable Energy
Consumer Futures
Department of Energy and Climate Change
eaga Charitable Trust
Energy Action Scotland
Fuel Poverty Indicator
National Energy Action
Rural Fuel Poverty
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Contact:
Harriet Thomson
Department of Social Policy and Social Work,
University of York
Generously funded by:
eaga Charitable Trust
http://www.eagacharitabletrust.org/
November 2013