Alleviating Energy Poverty in Europe: Front-runners and Laggards

In recent years, awareness of energy poverty has gained increasing attention in European countries. Comparative country studies can enhance our understanding of the causes and effects of this growing problem. This paper proposes a new model for the analysis of energy poverty. We define a theoretical framework and model to estimate an energy poverty frontier. The estimated frontier indicates the minimum level of energy poverty that a country can achieve given its income level, energy prices, energy intensity, and other country-specific features. We apply the approach to a sample of 30 European countries during the period 2005–2018. This allows us to contrast whether policy measures aimed at reducing the poverty among vulnerable individuals and households have been effective. The results indicate that financial aid aimed at vulnerable groups, reductions in energy prices, and improvements in energy efficiency have been beneficial against energy poverty. These factors may partly explain why, despite the negative income impact of the financial crisis, we found a steady and general energy poverty reduction during the period in almost all the countries analysed.