2. Overview of Approaches for Measuring Energy Poverty in the EU 2.1. Conceptualizing Energy Poverty

**There is currently no consensus in the literature on how to best measure energy poverty due to a lack of a common understanding of energy poverty and a lack of a standardized set of metrics.** There is no consensus on how to best measure energy poverty. The inexistence of a common measure has several reasons. First, there is no consensus on the basket of basic energy services (Culver, 2017). Second, the absence of such a measure might be partly related to the fact that energy usage varies significantly by country context and culture. Next, while the literature agrees that energy poverty should reflect a lack of energy services, it is unclear how to translate this concept into a common metric (ibid). Partly, this problem is related to the fact that energy services cannot be substituted for each other and that the poverty level for each energy service is arbitrary (ibid).

**Nevertheless, measures of energy poverty should be evidence-based and well-thought-through.** What most papers agree on, however, is that energy poverty measures should not be chosen arbitrarily without reflecting on the shortcomings of each metric and the aspect of energy poverty, which is a specific indicator measure (Herrero, 2017). In the case of the European Union, Pye et al. (2017) conclude that the concept of energy poverty varies significantly across member states. They recommend that the European Commission take a leading role in achieving greater harmonization and less fragmentation in the EU concerning measuring and approaching energy poverty.

**Gouveia et al. (2022) divide energy poverty measures**<sup>16</sup> **in the EU into three types: expenditurebased, consensual indicators, and direct measures.** Gouveia et al. (2022) take stock of energy poverty measures in the European Union and categorize them into three types: expenditure-based measures, consensual approaches, and direct measures (see Figure 1). Expenditure-based measures assess households' energy costs and compare them to absolute or relative thresholds. Consensual approaches are self-reported assessments of indoor housing conditions and/or the ability to meet necessities, such as keeping one's home warm in winter. These are then compared to relative values in the place of residence of a given household. Finally, direct measures measure the level of energy services (physical variables) and compare them to previously set standards, such as the reference comfort temperature by the World Health Organization (WHO) ( <mark>Palma and Gouveira, 2022),</mark> or other indicators to determine the adequacy of energy services (e.g., room temperature).

_Figure 1: Types of energy poverty measures in the EU_

|Expenditure-based|Consensual approaches|Direct measures|
|---|---|---|
|•Energy costs of<br>households<br>•Compared to absolute or<br>relative thresholds|•Self-reported indoor<br>housing conditions/Ability<br>to attain basic necessities<br>•Relative to place of<br>residence|•Level of energy services<br>(e.g., heating; lighting)<br>•Relative to set standards<br>(e.g. reference comfort<br>temperature)|

_Source: Compilation of findings by_ _<mark>Gouveia et al. (2022)</mark>_

**When looking at factors that relate to energy poverty and vulnerability, Thomson et al. (2017) take a vulnerability approach to energy poverty and divide energy vulnerability into six factors.** Thomson

> 16 Gouveia et al. (2022) limit their assessment to data from EUROSTAT, EU-SILC (European Union Statistics on Income and Living Conditions), HBS (Household Budget Survey), and BSO (Building Stock Observatory).

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