Improving energy poverty measurement in Southern European Regions through equivalisation of theoretical energy costs

Abstract

In many European countries, energy poverty is measured on the basis of real energy bills, as theoretical energy costs are hard to calculate. The UK is an exception—the data inputs for the Low Income-High Cost (LIHC) indicator are based on reasonable energy costs, these data are collected through specially designed surveys, often an intensive and costly procedure. Approaches which calculate energy needs are valid when energy bill data are unreliable or where households restrict consumption. In this analysis, energy poverty levels are evaluated for Greece, the municipality of Évora (Portugal), and the Basque Country (Spain): energy bills are modeled based on building energy performance data and other energy uses, and adjusted according to socio-demographic variables. To this end, equivalization weights are calculated using socio-economic data from the aforementioned southern European countries/regions. Data are analyzed to compare measurements with actual versus modeled bills using the Ten-Percent Rule (TPR) and Hidden Energy Poverty (HEP) against twice the median (2M) indicator, enhancing the identification of households with low energy consumption. In conclusion, theoretical energy needs can be combined with socio-demographic data instead of actual energy bills to measure energy poverty in a simplified way, avoiding the problem of targeting households that under consume.