The EU’s new ‘Energy Union’ does not go far enough in reshaping our demand for energy, argue Professor Stefan Bouzarovski and Dr Saska Petrova.

One of the ten stated priorities of the new European Commission has been the establishment of an ‘Energy Union’ – a common policy umbrella that will, says the EU, ensure “secure, affordable and climate-friendly energy for citizens and businesses”. The basic principles of the Energy Union are contained in a major policy document published by the Commission in February. It highlights the need for a fundamental transformation of the 28 nation bloc’s energy system, via a range of common policy mechanisms.

In addition to emphasizing the need to move away from an economy driven by fossil fuels, the document criticizes ‘centralized, supply-side approaches’ and ‘outdated business models’ in the energy sector. There is also talk of empowering consumers through the provision of ‘information and choice’, as well as flexible instruments to manage demand and supply. The document aims to turn its back on a fragmented energy network characterized by ‘uncoordinated national policies’, market barriers and infrastructural ‘energy islands’.

As a whole, the Energy Union is a significant departure from a number of traditional policy approaches. Even though energy was one of the EU’s founding principles – it started as the European Coal and Steel Community – this was never a key stated policy priority in the manner posited by the new Commission. Historically, some of the larger member states (particularly Germany) resisted the establishment of a common European energy policy for fear of losing national sovereignty in this domain.

Over the past decade, a combination of external and internal factors – mainly concerns over hydrocarbon dependence on Russia and the EU’s emerging common gas and electricity market – have started to provide a powerful impetus for the European Union’s involvement in setting the strategic direction and institutional framework for energy governance.

The new Energy Union is the culmination of this process. Its underlying framework involves an emphasis on consumers and the management of energy demand. This both challenges and expands the European Union’s traditional focus on energy supply, and the regulation of electricity and gas markets.

The involvement of the European Union in domains that lie beyond its conventional portfolio opens up a number of unexpected tensions and opportunities. The Energy Union policies will be “secure, affordable and sustainable” at the same time. But reconciling these priorities within a single policy framework is not easy: low carbon measures can increase energy prices in the short run, and their effects can be socially regressive. While ‘win win’ approaches exist, they may be difficult to implement within a genuinely democratic system forced to reconcile conflicting political interests and priorities.

The conflict between policies on sustainability and affordability is reflected in the emergence of domestic energy deprivation – known as fuel poverty in the UK and Ireland, and ‘energy poverty’ or ‘precariousness’ in the rest of Europe. This refers to the inability of a household to secure an adequate level of energy services in the home, although various official definitions are in use in different countries. Energy or fuel poverty is driven by a combination of high energy prices, low household incomes and poor residential energy efficiency, plus, sometimes, above-average energy needs, or the inability to access affordable energy sources.

Conventional policies have focused on financial or in-kind support for vulnerable groups. These have been supported by assistance schemes to improve the energy efficiency of residential buildings, household appliances, or heating systems.

However, these measures have been insufficient to address the scale of the problem. It is thought that more than 150 million households in Europe may be affected.  The Energy Union framework is disappointingly vague on energy poverty, even though it has been present in the vocabulary of EU institutions for several years.

Existing policies tend to focus on economic and social support measures. There is limited awareness of the underlying causes of energy and fuel poverty, which are embedded in the structural fabric of cities and regions. Energy inefficiency and everyday patterns of energy consumption are driving the problem.

Planning policies need to be reconsidered in ways that allow neighbourhoods, cities and regions to address the root causes of the problem via the development of affordable and locally-sourced low carbon energy. Some locations may benefit from the implementation of area-based approaches. Elsewhere, community organizations and local authorities need support to build their capacity to retrofit ‘hard-to-treat’ properties.

Research within the EVALUATE project, the Centre for Urban Resilience and Energy and the University of Manchester is explaining some of the ways in which cities, energy and poverty are mutually interconnected.

During the past two years, we undertook interviews with more than 170 experts (national decision-makers, local government officials, company representatives, NGOs and union activists) across eight European countries. We also surveyed 2,500 households in eight urban districts to establish which groups are most susceptible to fuel poverty. The project team has issued policy briefs (available here and here) highlighting the extent of energy poverty across Europe, as well as its relationship to urban policies and institutions.

Some of our initial findings point to the importance of employing community-based networks and local authority resources to address the energy needs of vulnerable households. In the policy and regulatory domains, we have identified governance processes and practices that can support fuel and supplier switching, while facilitating energy efficiency investment. This is particularly important for the private rented sector, housing in multiple occupancy and apartment blocks – parts of the residential stock that remain outside the focus of mainstream policies.

The deep energy transformation in Europe foreseen by the Energy Union is indeed possible, but only if supported by imaginative, comprehensive and bold policy measures.

• Picture credit: Stefan Bouzarovski
• For information on the work of Cities@Manchester see the website.