Where does fuel poverty exist?

In Greece, the perfect storm for widespread fuel poverty

Depending on how one accounts for contributing factors (and indeed, who is doing the calculations), the level of fuel poverty in Greece is estimated to range between 16% and 36% of the population.[1] At the high end, it matches estimates of the number of people at risk of general poverty or social exclusion.[2]

Like most EU countries, Greece applies the criteria of spending 10% of income on energy to identify fuel poor households. Italso recognises people's inability to heat their home to an adequate standard of warmth.

Low quality buildings are the starting point for Greece's current cold front. Data from the Ministry of Environment and Energy show that of 565 508[3] energy performance certificates (EPCs) issued to date, 32.2% of houses rank in Category H. The vast majority are simply not well insulated – if, indeed, they are insulated at all. To put that in perspective, while most new buildings in Europe need 3 litres (L) to 5 L of heating oil per square meter (m2) per year, older buildings consume an average of 25 L/m2. Category H buildings can guzzle up to 60 L/m2.

Overlay high oil prices and the unrelenting economic crisis on this foundation, and the conditions are ripe for a national catastrophe. A few characteristics of Greece make the situation unique.

Fuel poverty higher in urban centres than rural areas

Housing tenure is an important dynamic of fuel poverty,[4] as it typically determines how much control a household has over keeping their home adequately warm by selecting an appropriate heating system and managing their own energy consumption and household budgets.

Most rural homeowners in Greece maintain this level of control. For some who had made the transition from wood-burning fireplaces to oil or gas heating, balancing heating needs and household budgets meant re-opening walls to gain access to long-blocked fireplaces. But they had choices.  

By contrast, most urban residential buildings are multi-story apartment blocks with a collective, oil-based heating system. Individual flats may be occupied by a mix of private owners and renters. In an economic crisis such as Greece is currently experiencing, this situation can render some residents – regardless of whether they rent or own, and their own financial situation – at the mercy of majority. If 50% of residents in a particular building cannot afford their heating bills, the oil supply to the central system is cut off. As a result, the indoor temperatures in all flats drops to below accepted standards and residents turn to space heating appliances such as electric heaters, air-conditioners, stoves, etc.

Even in buildings where central systems remain connected, block heating creates an additional challenge. To keep collective costs down, the tenants may opt for a heating plan that covers two hours in the morning, two at mid-day and two or three in the evening. For people in retirement, the unemployed or those with limited mobility due to illness or disability, such heat rationing may mean being excessively cold for many hours every day.

Thus, in some cases, residents facing the health risks of chronic cold would be warm if they had autonomous heating. Despite its relatively moderate winters, Athens is particularly hard hit simply because such a large portion of the Greek population (4 of 11 million) is concentrated within its boundaries.

Still considering Athens, keeping an average-sized flat of about 80 m2 adequately warm with a shared central heating plan would typically carry a monthly cost of EUR 40 to EUR 60. Since the crisis began, pensions have been dramatically reduced, from EUR 600 to EUR 800 to closer to EUR 400 to EUR 500. As a result, typical heating costs now account for the 10% criteria.

Rising levels of fuel poverty prompted government action

Within a year of the financial crisis starting, fuel poverty began to rise in Greece and the government took relatively swift action. In 2010, a Decision of the Ministry of Environment, Energy and Climate Change introduced the Social Residential Tariff (SRT or ΚΟΤ) to protect vulnerable groups of energy consumers. This legislation obliges Greek power suppliers to provide discounts up to 42% compared with normal electricity tariffs.[5] The Ministry of Finance also launched a subsidy scheme to help low-income households afford heating oil in the winter.

But six years on, there are no signs that any of the factors contributing to widespread fuel poverty will ease off any time soon. One net result is that for the winter of 2015/16, it is expected the oil subsidy will cost an increasingly cash-strapped government EUR 105 million.

International comparisons show that, as they lack a holistic approach to a complex problem, such subsidies are a rather ineffective tool for tackling fuel poverty. Financial schemes that target long-term improvement of the energy efficiency of buildings deliver higher value for people and for governments.

Adequate cooling equally important

Even under normal circumstances, Greece faces diverse challenges in relation to indoor comfort – including the fact that the country crosses four climatic zones. Temperatures in Athens and in northern villages that lay at the same latitude as the Swiss Alps can vary more than 20°C on a given day.

As heating and cooling needs are vastly different, a flat of 80 m2 in Thessaloniki may require double the fuel oil for heating as a similar flat in Athens. The reverse may be true for air-conditioning when temperatures in Athens climb to more than 40°C during summer. As most air-conditioners rely on electricity (rather than oil), they are less costly to operate. People may find it more affordable to be adequately cool in summer than adequately warm in winter.

But there's a drawback for both consumers and the electricity system. Many people have old, inefficient air-conditioners, so their electricity bills for cooling are higher than necessary. Moreover, spikes in demand can overload the system, leading to brownouts that leave entire neighbourhoods completely powerless.

With many cities in coastal areas and people living on 165 of its 2 500 islands, Greece also contends with high levels of humidity. This leads to a great deal of mould damage in households that lack effective air-conditioning and ventilation systems, and to associated health problems.

Clearly, building codes need to be regionally appropriate, as do strategies to alleviate or eliminate fuel poverty.

Progress on private homes and public buildings

Much work remains to be done in moving Greece towards an energy efficient building stock, but a coalition of energy efficiency experts who represent technical universities and companies is engaging with government officials to build momentum. Some signs of progress are evident. For example, they are working on setting minimum, cost-optimal energy efficiency requirements according to the 31/2010 EU Directive and on setting an official definition for near zero-energy buildings (nZEBs) in Greece.

The National Renovation Roadmap,[6] launched by the Ministry of Environment and Energy within the framework of the 27/2012/EU Directive is another important initiative. A recent public subsidy program called Save at Home[7] supported energy retrofitting of approximately 45 000 residences. Importantly, it allowed up to EUR 15 000 per household so a holistic approach could be pursued of changing windows, boosting insulation levels and installing more efficient heating or air-conditioning systems, or even solar panels.

The Roadmap is collecting data on the overall building (public and private) stock in Greece. It aims to carry out deep retrofits to 3% (i.e. as much as 310 000 m2) of public buildings annually, which means not only government but also public sector buildings (schools, libraries, hospitals, municipal centres and other facilities) will be warmer and have lower energy costs. Greece is awaiting approval of the plan and the release of structural funds to support the Roadmap, along with the Save at Home 2 program.

One challenge is that social housing and private housing companies, a primary target for large-scale energy retrofits to lift many people out of fuel poverty in other European countries, are not very common in Greece. To alleviate the Greek situation in the long term, greater public awareness about the benefits of improving energy efficiency is needed, along with appropriate financing tools. 

An animation launched during the pollution crisis in winter 2012/13 is a great example of a creative way to inform the public about choosing efficient heating devices over cheap, dirty energy sources. 

 Click the image to connect to the animation in a new window. 



EnAct is grateful to Alice Corovessi and Eleftheria Touloupaki of the Institute of Zero Energy Buildings for their assistance in developing this content. www.inzeb.org
[1] M. Santamouris, S.M. Alevizos, L. Aslanoglou, D. Mantzios, P. Milonas, I. Sarelli, S. Karatasou, K. Cartalis, J.A. Paravantis, Freezing the poor-Indoor environmental quality in low and very low income households during the winter period in Athens, Energy and Buildings, Volume 70, February 2014, Pages 61-70.
[2] http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=t2020_50&plugin=1
[3] http://bpes.ypeka.gr/wp-content/uploads/000_000_01_001b_PEA_Building_Decade_EnergyClass.pdf
[4] C. Whyley, C. Callender, Fuel Poverty in Europe: Evidence From the European Household Panel Survey, Policy Studies Institute, London (1997).
[5] https://www.dei.gr/en/oikiakoi-pelates/eualwtoi-pelates-kai-koinwniko-oikiakteo-timologio/plirofories-gia-to-koinwniko-oikiako-timologio
[6] http://www.ypeka.gr/LinkClick.aspx?fileticket=vDjk62bRxSI%3d&tabid=282&language=el-GR
[7] http://www.ypeka.gr/Default.aspx?tabid=526&language=el-GR