Does cash money solve energy poverty? Assessing the impact of household heating allowances in Spain. (October 2021)

• Record Type: Journal Article
• Authors: Barrella, Roberto; Linares, José Ignacio; Romero, José Carlos; Arenas, Eva; Centeno, Efraim
• Is Part Of: Energy research & social science. Volume 80(2021)
• Publication Date: 2021-10
• Subjects: AT After Tax -- BT Before Tax -- CTE Spanish Technical Code for Building Construction -- DHW Domestic Hot Water -- EPOV EU Energy Poverty Observatory -- HDD Heating Degree Days -- IDAE Spanish Institute for Energy Diversification and Saving -- LPG Liquefied Petroleum Gas -- RDL Royal Decree-Law -- RTEE Required Thermal-Energy Expenditure (heating and DHW) -- SNSEP Spanish National Strategy against Energy Poverty -- TEC Thermal Energy Cheque -- TSA Thermal Social Allowance -- VPSC Voluntary Price for Small Customer -- WEP Winter Energy Poverty; Energy poverty -- Vulnerable households -- Energy expenditure -- Residential sector -- Policy evaluation; Power resources -- Social aspects -- Periodicals; Energy consumption -- Social aspects -- Periodicals; 333.7905
• DOI: 10.1016/j.erss.2021.102216
• Languages: English
• ISSNs: 2214-6296

Abstract

Highlights: Heating allowances usually suffer from design problems that affect their efficacy. We assess the effectiveness of the Thermal Social Allowance in Spain. We apply a bottom-up methodology to model costs for heating and DHW. We propose an alternative aid based on vulnerable households' energy needs. The proposal would decrease winter energy poverty more substantially. Abstract: Energy poverty could be identified as the inability of households to attain a necessitated level of domestic energy services. Since Boardman's pioneering studies, EU Member States have progressively tackled this issue through both mitigating and structural measures. Among the former are the financial aids that seek to support vulnerable households in paying their heating bills. These widespread measures usually suffer from design problems, which can affect their efficacy. That is precisely what this paper aims to provide: an analysis of the effectiveness of the Thermal Social Allowance (TSA) in one of the Member States (Spain), as well as a proposal to redefine it, i.e. the Thermal Energy Cheque (TEC), to address some of its limitations. For that purpose, this paper proposes a bottom-up methodology to characterise Spanish households' theoretical expenditures for heating and domestic hot water. Then, the TEC proposal integrates this methodology in the calculation of an energy cheque that would enhance the current TSA policy. Furthermore, an impact assessment is carried out to evaluate the effectiveness of the two measures in reducing winter energy poverty. The main findings show that in 2019 the limitations in the design of the TSA led to a reduction of winter energy poverty of only 1%, whereas the implementation of the TEC would reduce it by 11%. Nevertheless, both are costly measures that do not tackle other constituent factors of energy poverty, e.g. low energy efficiency of housing, making them unsuitable as medium-long term policies.