Proposal for a Long-Term National Strategy to Combat Energy Poverty

In the recent years, the energy poverty problem has increased significantly in Europe, which is why it has been identified as a political priority by several EU institutions. The European Commission, under the Clean Energy for All Europeans Package, has given priority to this topic, including in several legislative initiatives references to the need for Member States to adopt measures to tackle energy poverty.

In this context, Portugal in its NECP 2030 establishes a line of action "Fighting energy poverty and improving protection instruments for vulnerable consumers", which defines a set of action measures to tackle energy poverty, including the promotion of a Long-Term Strategy to Combat Energy Poverty.

Accordingly, Portugal began in April 2021, the public consultation process for the document "Long-Term National Strategy to Combat Energy Poverty 2021-2050", which ended on 17 May 2021. The Strategy aims to diagnose and describe the energy poverty problem, develop follow-up indicators, monitoring strategies, establish medium and long-term energy poverty reduction goals at national, regional and local levels, and propose specific measures to achieve these goals, as well as forms of financing to mitigate this problem in the coming years.

Among the various factors that lead to a situation of energy poverty, Portugal considered three factors as most relevant in the national context for the definition of the term "energy poverty", namely: Income - low income and lack of monetary resources to meet energy costs; Energy - lack of access to adequate levels of energy services and low rate of equipment ownership; Housing - low energy performance, without the ability to provide adequate comfort and with high energy consumption needs.

Thus, it defines energy poverty as "Inability to maintain housing with an adequate level of essential energy services, due to a combination of low income, low energy performance of housing and energy costs". It is estimated that in Portugal between 1.9 and 3 million people are in energy poverty - about 660 to 740 thousand people in severe energy poverty and between 1.2 and 2.3 million people in moderate energy poverty.

The pursuit of the main goal of tackling energy poverty will be based on the application of four guiding principles:

▪ Increasing housing energy performance, through the adoption of construction solutions, rehabilitation and renovation, replacement and/or adoption of new, more efficient equipment, new materials, technologies and processes that increase the energy performance of buildings, housing and equipment, reducing energy needs without compromising the comfort, well-being and indoor quality of housing;

▪ Reinforce the conditions of access to energy services, by providing mechanisms that facilitate and support access to essential energy services for the well-being and health of households living in energy poverty, including access to new forms of energy production, namely through self-consumption and renewable energy communities;

▪ Reduce the burden of energy consumption, by pursuing the previous guiding principles and complemented with price support mechanisms, it will be possible to achieve reductions in the burden of energy consumption, thus allowing an increase in household disposable income;

▪ Strengthen energy knowledge and access to information, through the provision of more and better tools and means to promote and improve energy literacy, resulting in greater awareness and the adoption of best practices regarding the rationalization of energy consumption and adoption of energy efficiency measures, including monitoring and guidance in their implementation.

In the pursuit of these guiding principles, it will be possible to ensure, in a progressive and sustained manner, the main goals derived from the combat against energy poverty: greater comfort in homes; more disposable income; more quality of life; more health.

The proposed action measures to combat energy poverty are organized according to four dimensions, corresponding to the different priority action areas identified:

1. Energy Efficiency

Increase housing energy performance, promoting programs, actions and support mechanisms of structural nature to combat situations of energy poverty, which includes targeted interventions to make investments in energy efficiency and rehabilitation of buildings, incentives for changes in consumption patterns and actions aimed at the integration of renewable energy. These actions will be developed with the various actors, national and local, including various regional and local bodies in the various aspects, to better adapt to the reality and promote proximity to consumers in situations of energy poverty.

• Support for energy efficiency actions - support actions and develop support and incentive mechanisms (including non-reimbursable support) that promote decarbonization and housing energy efficiency (owners and tenants), namely in the renovation and rehabilitation of buildings, by adopting sustainable construction solutions with special focus on insulation, leading to an increase in the energy performance of buildings and the improvement of living conditions and thermal comfort, in the replacement and/or adoption of energy-efficient equipment and systems, promoting consumption electrification, and in the implementation of renewable energy production and storage systems.
• "Efficiency Voucher" - allocate 100,000 "efficiency vouchers", with an average value of €1,300/Voucher, to economically vulnerable families in energy poverty as a direct support mechanism that can be used in building rehabilitation and renovation interventions, specialized technical support, and the adoption and/or replacement of energy-efficient systems and equipment.
• Energy certification - Create an incentive and support mechanism to perform energy audits in the homes of economically vulnerable and energy-poor households, to issue the respective Energy Certificate (EC) with a view to identifying the main improvement measures that lead to an increase in the energy performance and the reduction of consumption. In this way, it will also be possible to collect additional information about the housing conditions, referring households to the competent entities that can assist in the pursuit of the measures set out in the EC.
• Access to financing - mobilize the financial institutions to create the appropriate mechanisms that allow for the creation of a lending framework that enables widespread and simplified access to sources of financing for energy efficiency actions in housing, including, for example, surcharges and subsidies for the most vulnerable households, helping to increase the degree of accessibility and equity in access to financing mechanisms.
• Electrification - promote and support the electrification of household energy consumption, in an efficient and sustained manner, by means of incentive mechanisms for the acquisition and/or substitution of equipment, promoting a transfer from fossil-based household consumption (e.g. LPG) to electricity.
• Inclusive energy transition - support investment to be carried out by renewable energy communities, including and involving vulnerable consumers in situations of energy poverty, aiming to reduce the burden of energy bills, promoting increased self-consumption and energy sharing.
• Social Housing - articulate actions for energy rehabilitation in social housing buildings, focusing on energy efficiency in order to increase the energy and environmental performance of housing, and promoting the fight against energy poverty, improving the living conditions and comfort.
• Local actions - promote and support projects on a local scale - "Sustainable Neighbourhoods", "Sustainable Villages" - with the aim of creating local dynamics with the involvement of communities and local agents, through intervention in housing and dissemination of information and awareness actions, enabling economies of scale and concentrating support and funding to support more families.
• Social Innovation - create and support a social innovation ecosystem to combat energy poverty, promoting and supporting innovative projects and new technologies to combat energy poverty. The projects should adopt disruptive, enabling, diagnostic and operational solutions, in order to create dynamics and explore new approaches and models to combat energy poverty with the involvement of various partners (technological, qualified experts, business, universities and research centres, municipalities and local actors).
• Tax benefits - analyse the introduction of tax benefits and energy saving bonus, associated with social criteria and integrated in the scope of the energy certification of buildings.

2. Burden Reduction

Support the price and burden reduction, promoting programs, actions and mechanisms that allow for energy burden reduction, as is the case of the Social Tariff for Energy, and energy services for domestic consumers, both through awareness-raising actions that stimulate correct energy use and management, and through support so that the price of energy is not a factor of exclusion in access to these services, regardless of the economic, social or geographical situation of consumers, while serving the purpose of ensuring universal access to quality services at affordable prices.

3. Consumer Protection

Protect consumers whenever they are unable to meet their energy costs or in their relationship with market operators, promoting programs, actions and mechanisms that reinforce the access conditions to essential energy services safeguarding the well-being and health of households in a situation of energy poverty, either through the development of mechanisms that signal and assist vulnerable consumers to combat the energy poverty in which they are inserted and to meet the payment of the bill, in extreme and adverse weather situations that impact on energy consumption, or by promoting the development of self-consumption, individual, collective, or by creating renewable energy communities, stimulating the energy sharing.

4. Information, Knowledge and Education

Promote the development of training and information campaigns to raise awareness and disseminate best practices for energy efficiency aiming to stimulate behavioural change when using energy aiming to obtain savings with the energy bill, comfort and environmental gains. Advisory and assistance structures should be created and strengthened for this purpose and for the dissemination of available incentive systems in order to increase housing energy efficiency. Promote the development of programs and actions in schools, among young people - agents of change and multipliers of information in their households - where the problems of energy efficiency, energy poverty and the importance of individual and collective commitment in changing behaviours in energy use will be addressed, also with a view to effectively tackling climate change.

Source: Document for public consultation available [here].