Understanding energy poverty drivers in Europe

Abstract

This paper tackles the issue of energy poverty in an attempt to identify the key factors that would enhance the affordability of energy services. We implement a set of recent panel data techniques which enable us to capture the presence of regime shifts and time-varying relationships between energy poverty and its main drivers. Using annual data from 25 European countries over the period 2006–2019, we point out the prominent role of income level and energy price in determining access to adequate and affordable energy. This outcome depends on the degree of income inequality, the energy efficiency, and the energy transition underway. Better income distribution among households and efficient use of energy resources would alleviate energy poverty. Nevertheless, policymakers would have to pay more attention to the cost of energy transition to not worsen household access to energy services.