PHOTOS: UNSPLASH AND ISTOCK

The concept of energy poverty, though a relatively new topic in a Nordic context, has gained a great deal of attention in the wake of the recent energy crisis and due to its prominence in the EU's work on this topic. Particularly, the revised Energy Efficiency Directive (EED) (Directive (EU) 2023/1791) and – at the time of the writing – the ongoing work on the electricity markets directive (EMD), are relevant in this context. The EED requires member states to focus on alleviating energy poverty. The introduced changes require Member States to prioritize vulnerable customers, individuals affected by energy poverty, and those living in social housing when introducing energy efficiency improvements. In addition, each Member State is responsible for achieving a share of energy savings among vulnerable customers and those affected by energy poverty.

In the Nordics, there has been limited examination of energy poverty. This can be attributed to the presence of robust social welfare systems in the region, which effectively mitigate economic crises, thereby integrating the consideration of energy poverty into broader social policies. With no distinct definition, economic scarcity due to rising energy prices is often conflated with general poverty. As a result, it is rather difficult to define the concept of energy poverty and identify indicators to estimate the prevalence of energy poverty in the Nordic context as the ideal policy tools diverge from those applied in the rest of the EU.

To support the implementation of the directive, the EU Energy Poverty Observatory (EPOV) suggests four indicators to measure the extent of energy poverty. If the Member States do not specify other indicators to estimate energy poverty, they are obliged to estimate the prevalence of energy poverty using the suggested indicators. However, the proposed indicators, both consensual- and expenditure-based, present challenges in capturing the nuanced context of energy poverty in the Nordics.

This study provides an analysis of the prevalence of energy poverty in the Nordics using several indicators including those suggested by EPOV. However, the examination reveals context-specific challenges in the Nordics. The structure of energy bills complicates expenditure-based indicators, and relative measures may not accurately reflect the absolute prevalence of energy poverty across countries. The issues also include under-reporting vulnerability and survey biases, necessitating further efforts to refine indicators for the national context. The ongoing work with energy poverty has shown the multifaceted nature of energy poverty in the Nordic context and the imperative for tailored strategies and indicators to address this critical issue. A virtual workshop, which engaged diverse stakeholders, has produced guiding recommendations for future work on energy poverty. These recommendations emerged from discussions on the initial findings of the current study, a general exploration of the EED, and consideration of climate targets outlined in both the directive and the National Energy and Climate Plans (NCEP), with a focus on not compromising energy efficiency improvements.

The study on energy poverty in the Nordics in continuation of the implementation of the revised Energy Efficiency Directive has pointed towards a set of recommendations that could support the countries’ work with addressing energy poverty. These recommendations are summarised below and thoroughly elaborated in chapter 8.