Energy poverty is set to decline after 2023 at its highest levels, and social connections will be the lifesaver.

Energy poverty is set to decline this year after 2023, with some indicators reaching highs and social bonuses becoming a lifesaver for vulnerable households to take advantage of these rebates, which require better design. These are some of the ideas expressed Tuesday by the heads of the Pontifical University of Comillas’ department of energy and poverty during the presentation in Madrid of its annual performance report.

José Carlos Romero, coordinator of the department, noted that, judging by the data for 2023, the latest year according to the National Institute of Statistics (INE), the problem of energy poverty, households that cannot meet their basic needs for energy supply (for heating, cooling, supply of household appliances) due to low incomes and/or the presence of inefficient housing “does not disappear, but rather consolidates.”

However, the scenario for 2024 is “more favorable,” Romero explained. “This has been a year of much lower prices and that should be taken into account because no social protection measure is in question.”

The tightening of discounts on electricity and gas tariffs, which began during the pandemic and were consistently extended, has only begun to weaken now, in October this month. This month, the discount for vulnerable consumers increased from 65% to 57.5%, and for particularly vulnerable consumers from 80% to 72.5%. From January these percentages are expected to be 50% and 65% respectively.

As the Ministry of Green Transition’s strategy to combat energy poverty awaits an extension into 2025, Romero noted that “an improved bonus structure overall” will help mitigate this problem. Because bonuses work: according to Roberto Barrella, a researcher at the department, “at least in the short term” they are “a measure that works as a social shield.”

Thus, these rebates reduced energy poverty by 10% last year for households in the lowest income deciles. The problem is that we are “very far” from all possible beneficiaries receiving assistance: 80% of them are not counted, as reflected in a recent EsadeEcPol report. Meanwhile, many large families with high incomes take advantage of this bonus.

Comillas’ latest report, now in its fourth edition, dates back to 2023, a year that marked the beginning of the end of the inflation and energy price crisis. The study is based on the Living Conditions Survey (ECV) and the Family Budget Survey (EPF) prepared by INE.

It reflects that last year saw an all-time high in the proportion of households spending disproportionately on energy, at 17%, up two tenths from 2022, despite falling prices and rising household incomes. The rate of underspending (households that spend very little compared to what they should) was 12.53%, the highest level since it began being measured. Household energy spending fell across the board. The median was €662, compared to €763 in 2022.

Hidden energy poverty, that is, those people who reduce their energy consumption below necessary because they do not have the resources to cover it, “remains high” but decreases from 30.9% to 28.6%. The “severe” rate also decreased from 10.6% to 9.3%. In this section, Extremadura leads due to the combination of low income and high demand for heating and cooling of homes in this autonomous community.

The number of homes that were unable to maintain adequate winter temperatures rose to 20.7% in 2023. But Barrella says we should “be careful” with this very high figure. This was likely influenced by a methodological change in the ECV at the date of collection: it was asked in the winter, specifically in February 2023, when prices were still very high, whereas in other years it was asked in the spring or summer.

And we also need to be careful about the “possible consequences” of the delinquency rate. In 2023 it was 9.6%. And, as Barrella emphasized, the moratorium imposed by the Government with the so-called social shield will, in principle, cease to apply at the end of the year.

The researcher at this chair, sponsored by the Naturgy Foundation, Endesa and EdP, also called for “paying special attention” in the context of climate change and warming to the 33.7% of households who say their home is not cool enough in summer.