Energy poverty in Europe: Who’s recovering and who’s falling behind?

A new in-depth analysis of energy poverty across the European Union shows that while some countries are making significant progress, others continue to struggle under the weight of unaffordable energy costs. The findings underscore the growing social dimension of energy security amid climate and economic shocks that have redefined Europe’s energy landscape.

The study, titled “Convergence or Divergence? A Cluster Analysis of Energy Poverty Patterns Across the European Union Amidst Policy Shifts and Crises”, was published in Energies. It examines data from 2015 to 2023, focusing on four key indicators: inability to keep homes adequately warm, arrears on utility bills, housing cost overburden, and the at-risk-of-poverty rate. Using Eurostat EU-SILC data and cluster analysis, the research highlights diverging national experiences and offers a nuanced view of energy poverty’s evolution during a turbulent decade.

How has energy poverty evolved across the EU since 2015?

Between 2015 and 2019, most EU Member States witnessed notable improvements in energy poverty indicators, driven by post-crisis economic recovery, rising household incomes, and investments in energy efficiency. However, this progress stalled and then reversed after 2020 due to the COVID-19 pandemic and the energy price crisis triggered by the Russian invasion of Ukraine.

According to the study, the share of the EU population unable to keep homes adequately warm fell to a low of 6.9% in 2019. By 2023, it surged to 10.6%. Arrears on utility bills and housing cost burdens also rose slightly, while the overall at-risk-of-poverty rate remained relatively stable. This divergence suggests that energy-specific pressures, not general income poverty, were the primary drivers behind the spike in energy deprivation.

The study clearly distinguishes energy poverty from general income poverty. Many households that were not technically poor still reported difficulty paying for essential energy services, particularly heating. This “energy-specific” vulnerability was amplified in regions with inefficient housing stock and heavy dependence on volatile energy sources.

Which countries improved and which are falling behind?

Using k-means clustering to group countries based on risk levels, the study reveals a dynamic shift in the energy poverty landscape. In 2015, eight distinct clusters emerged, with countries like Sweden, Austria, and France categorized as low-risk, while Bulgaria, Romania, and Greece exhibited extreme vulnerability.

By 2023, the number of clusters reduced to seven, reflecting some degree of convergence. Central and Eastern European countries, particularly Poland, Slovenia, and Czechia, showed measurable improvements. Poland transitioned from a moderate-risk cluster to the lowest-risk group, driven by better housing energy efficiency, supportive policies, and rising incomes. Similarly, Hungary, Croatia, and Latvia advanced to lower-risk categories.

However, Southern Europe presents a troubling contrast. Spain fell from a moderate-risk cluster to a high-risk category, joining Greece in the most vulnerable group. In Spain, nearly 20% of the population reported thermal deprivation, while in Greece, utility arrears soared to nearly 33%. These countries remain structurally exposed due to high energy prices, legacy economic weaknesses, and housing affordability crises.

Some high-income countries also experienced setbacks. Germany, Denmark, and Luxembourg, previously in low-risk clusters, saw worsening housing cost burdens. France and the Netherlands also slipped to slightly higher-risk groups, though they remain below the EU average.

What do these findings mean for future EU energy policy?

The study’s central insight is that energy poverty must be understood as a complex and standalone issue. It cannot be tackled solely through general income support or short-term energy price controls. Instead, it requires integrated strategies tailored to the distinct vulnerabilities of each region.

Countries still facing high energy poverty, such as Greece, Spain, and Romania, need long-term structural reforms. This includes investments in energy-efficient renovations, regulatory reforms in the housing sector, and expansion of social safety nets. In contrast, countries like Germany and Luxembourg, where housing costs drive energy poverty, may benefit more from rental market interventions and targeted efficiency upgrades in multi-unit housing.

The EU has already begun acting. The Fit for 55 package introduced the first official EU-wide definition of energy poverty and mandates that vulnerable households be prioritized in energy efficiency programs. The Social Climate Fund (SCF) is also positioned as a key mechanism to deliver targeted financial support and drive renovations in the most affected areas.

Yet, the study cautions that policy must remain adaptive. The clustering approach illustrates how fast conditions can change. Economic downturns, war-related supply shocks, or failures to implement policy effectively could cause divergence to re-emerge.

The report also notes methodological limitations, including subjectivity in survey responses and the potential underestimation of “hidden” energy poverty, where families reduce consumption below healthy or comfortable levels to avoid debt.

A path forward

The paper calls for a two-pronged approach: immediate relief and long-term structural change. For high-risk groups like those in Cluster 6 (Spain, Bulgaria, Romania), a mix of income assistance and infrastructure investment is needed. For moderate-risk but high-cost countries like Germany or Luxembourg, affordability interventions should focus on making energy efficiency retrofits accessible for tenants and low-income homeowners.

Moreover, the clustering model offers a replicable framework for other regions beyond Europe to assess energy poverty in a multi-dimensional and policy-relevant way. As Europe pursues its green transition and climate goals, the ability to ensure equitable access to affordable, clean energy will be a critical test of its social contract.