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Información del Working Paper

Is an energy cheque the solution to energy poverty? An analysis based on Spanish vulnerable households’ energy needs

R. Barrella, J.I. Linares, J.C. Romero, E.M. Arenas, E. Centeno

Energy poverty could be identified as the inability of households to attain a necessitated level of domestic energy services. Since the pioneering studies of Boardman, this issue has been progressively tackled by the different EU Member States with both mitigating and structural measures. Among the former are the financial measures that seek to support vulnerable households for paying their heating bills. These widespread measures usually suffer from design problems, which can affect their efficacy. That is precisely what this paper aims to provide: an analysis of the effectiveness of the Thermal Social Allowance (TSA) in one of the Member States (Spain), as well as a proposal to redefine it, i.e. the Thermal Energy Cheque (TEC), to solve some of its limitations. For that purpose, this paper proposes a bottom-up methodology to characterise Spanish households’ theoretical expenditures for heating and domestic hot water. Then, the TEC proposal integrates this model in the calculation of an energy cheque that would enhance the current TSA policy. Furthermore, an impact assessment is carried out to evaluate the effectiveness of the two measures in reducing winter energy poverty. The main findings show that in 2019 the limitations in the design of the TSA led to a reduction of winter energy poverty of only 2%, whereas the implementation of the TEC would increase this percentage to 18%. Nevertheless, both are costly measures that do not tackle other constituent factors of energy poverty, e.g. low energy efficiency of housing, which excludes them as medium-long term policies.

Keywords: Energy poverty, Vulnerable households, Energy expenditure, Residential Sector, Policy evaluation

Fecha de Registro: 11/12/2020