Between 50 and 125 million people in Europe are unable to afford proper indoor thermal comfort, and the situation is worsening every day. The Ukraine crisis and the recent decisions by Russia to cut off gas supplies to Poland and Bulgaria are a stark reminder of how vulnerable European citizens are when it comes to securing a warm home and how fragile social and political stability is. But energy prices were rising even before Putin’s aggression. Unfortunately, it took the most serious shock in energy prices since the oil crisis in the 1970s to elevate the issue of energy poverty to gain much-deserved attention. Today, governments all over Europe are implementing various measures to reduce the economic burden of high energy bills, ranging from fiscal measures to direct financial support for citizens.
These are short term fixes which are justified though costly. But what about structural changes to our energy and buildings policies, our support programmes in countries and regions which would have long-lasting positive effects?
Need for long-lasting reduction in energy demand
In its recent RePowerEU strategy, a response to the energy supply crisis, the European Commission announced the development of an Energy Savings Plan. This can only be welcomed, but such a plan must go beyond appealing to citizens to turn down their heating at home or to use public transport instead of private cars. The plan must include measures which deliver a long-lasting reduction of our energy demand, and these measures must be supported by the set of Directives which are currently in the political discussion process, such as the Energy Efficiency Directive and the Energy Performance of Buildings Directive. BPIE developed a number of ideas how the EU should respond with short-term and long term measures.
At the same time, we need to make sure that energy and building policies are designed to support a socially just energy transition, as we argue in a recent BPIE publication. Focus must be put on ensuring that renovation measures and financial support for renovations are accessible, in particular to vulnerable groups, and that information is effectively reaching those who need to be made aware of the solutions.
How to finance deep renovations – the fair way
Citizens in all EU countries are suffering from increasing energy costs. But the problem is aggravated in the countries of Central and Eastern Europe (CEE), which have the highest concentration of energy poor households in Europe. The ComAct Horizon2020 project, which aims to alleviate energy poverty by triggering deep renovation, has found that effective policies tackling energy poverty in multi-family buildings are missing in CEE countries. Although there are some financial instruments targeting deep renovation, these are mostly subsidies that don’t support increasing the energy efficiency of the building envelope nor target energy poor households, who are often more difficult to reach.
New ideas and programmes are needed to improve residents’ financial and living situation: high home ownership rates in multi-family buildings in this region are not suited for traditional renovation schemes shaped by Western European experiences where people typically rent their homes.
Renovations could be directly financed from the Recovery and Resilience funds available to every Member State. Funding support should be proportionally linked to the depth of renovation, meaning that higher support should be given to renovations achieving higher savings, either through a one-time deep renovation or in a step-by-step process to avoid lock in effects. Member States should therefore re-evaluate their plans to ensure that renovation is core and central to their efforts to increase energy independence and to reduce energy poverty.
Additionally, Member States’ national building renovation plans should include stronger requirements to set up schemes to alleviate energy poverty in collaboration with local authorities. A large portion of these plans (to alleviate energy poverty) will need to be included in "Social Climate Plans" (SCP), which every Member State will need to present to the Commission by June 2024. Homeowners and tenants need to be reached during in this process to ensure that deep renovation can achieve this aim. At the same time, homeowners should be empowered to better understand their needs and possible benefits regarding the renovation of their homes.