Member States (MS) are encouraged to include requirements in their national scheme that pursue a social aim, in particular to ensure that vulnerable customers have access to the benefits of higher energy efficiency. MS are encouraged to include requirements with a social aim in the saving obligations they impose fostering a share of energy efficiency measures to be implemented as a priority in households affected by energy poverty. This is dye to fuel poverty and energy affordability becoming increasingly problematic across the EU through rising energy prices. Low income households are less likely to afford energy efficiency improvements, unless they receive extra support. In addition costs might be passed back onto household bills undermining the problem and the financial burden imposed on low income households.
How MS tackle social issues
Only a very few MS have included requirements with a social aim in their schemes. Examples of where they have been included are:
- In France certificates delivered from low income households will receive uplift by a factor of 3
- In Austria all savings achieved at energy poor households are multiplied by a factor of 1.5
Market driven schemes make it competitive to add measures to fuel poor household, and should be seen as a driver for energy companies to find cost-effective measures in the right place. Nevertheless, there is experience that shows that those cost-effective measures are not suitable for those households affected by fuel poverty. For example in Norway, the tax system is used to fund energy efficiency measures, and they distribute the debts of poor households among other customers who are paying for it. In looking at options for giving fuel poor households a rebate directly linked to the cost of the scheme through existing mechanisms for rebates could be an option to support them.
Advantages and disadvantages of including social issues within an EEO
If an EEO is dealing with social issues it should be obligatory and not just voluntary,ensuring people with low income/high consumption will be included in the process. Furthermore, it may help to make the scheme more ‘acceptable’ and a clear political interest. Additionally, it will allow a transfer from subsidies to energy efficiency measures. Despite the advantages of including social aspects, it may also lead to some disadvantages, e.g. costs for energy are a less important issue than household income. Reaching difficult target groups, such as fuel poor households, involves high transaction costs. This in turn may lead to lower savings for higher costs, meaning governments may needs to compensate with alternative measures.
It is important to find the right balance between the policy objective of energy savings and social aspects, whilst ensuring that the achievement of the social objectives do not hinder the pursuit of the primary objective of the EEOs to achieve energy savings. Nevertheless, MS have to ensure to tackle the issue of fuel poverty and energy affordability which are becoming increasingly problematic due to rising energy prices.
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