New Research Examines Energy Poverty Across Europe

London – A new study led by Dr Georgia Makridou (ESCP Business School), in collaboration with Professor Ken’ichi Matsumoto (Toyo University) and Professor Michalis Doumpos (Technical University of Crete), provides a detailed assessment of energy poverty in 32 European economies. Covering both EU and non-EU countries from 2004 to 2021, the paper offers evidence-based insights into the causes and implications of energy poverty, while recommending targeted measures to address it.

The authors analysed household-level data from the EU Statistics on Income and Living Conditions (EU-SILC), a large-scale database that tracks income, housing, and environmental factors. By applying fixed-effect regression models and controlling for a range of variables—such as household income, building characteristics, and local environmental conditions—the team identified which factors most strongly correlate with households struggling to heat or cool their homes adequately. The inclusion of country-level indicators (like electricity pricing and GDP) allowed for comparisons across diverse economic and regulatory settings.

Key Findings

  • Housing conditions matter
    Poor insulation, damp walls, and leaking roofs are major contributors to energy poverty. Households in substandard housing face an up to 9% higher likelihood of struggling with high energy costs, depending on the severity of the condition.
  • Renters are more vulnerable
    Those who rent their homes, particularly at reduced rates or in free accommodation, face a greater risk of energy poverty. Renting at a reduced rate increases the risk by over 2.5%, while free accommodation increases it by around 2%. Limited ability to invest in energy-saving measures makes renters particularly exposed to high heating and cooling costs.
  • Urban living and energy costs
    Households in densely populated areas experience a higher risk of energy poverty, partly due to higher energy prices and environmental factors such as pollution and noise. These households often face additional challenges, including limited access to energy-efficient housing and higher living costs, which can exacerbate their vulnerability.
  • Financial security reduces risk
    Households with greater financial resources are better able to invest in energy-efficient appliances and home improvements, reducing their exposure to energy poverty. Higher-income households are generally less likely to experience energy poverty, with the reduction in risk varying depending on income level and other factors.

Policy Implications

Given these findings, the authors propose a multi-pronged approach to reducing energy poverty in Europe:

  • Improving Housing Standards
    Expanding retrofitting and insulation programmes to improve energy efficiency in homes, particularly for low-income and rental properties.
  • Targeted Financial Support
    Expanding subsidies, electricity bill discounts, and tax credits to offset energy costs for the most vulnerable households.
  • Encouraging Landlord Accountability
    Strengthening policies that ensure landlords invest in energy efficiency upgrades for rental properties.
  • Enhancing Access to Renewable Energy
    Supporting policies that make renewable energy solutions more affordable and accessible to low-income households.​​

Energy poverty remains a critical but unevenly distributed challenge across Europe, disproportionately affecting low-income and overcrowded households. While renewable energy expansion has not mitigated this issue, the real solution lies in policies that improve housing efficiency and lower energy costs for vulnerable groups. Understanding and evaluating the drivers of energy poverty is essential for designing effective interventions that ensure equitable access to affordable and sustainable energy.

Georgia Makridou
Associate Professor at ESCP Business School
Academic Director of the MSc in Energy Management and the Director of the Energy Management Centre

The study highlights the importance of tackling both housing conditions and affordability in addressing energy poverty. As energy prices and market conditions continue to shift, ongoing research and policy interventions will be necessary. The authors recommend further studies on the long-term impact of renewable adoption and broader social policies—such as employment support—in reducing energy poverty.

For those seeking more detailed information, the full paper—titled “Evaluating the Energy Poverty in the EU Countries”—is published in Energy Economics.

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