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Bankwatch: Energy poverty can be fought through long-term solutions

11 May 2022
Electricity
Bogdan Tudorache

Vulnerable consumers must be supported by government programs dedicated to local energy production and building renovation, Bankwatch Romania Association points out in its latest report. The analysis “Decentralized energy production, a solution to energy poverty” shows that such programs have been virtually non-existent until now, and to combat rising energy prices among vulnerable consumers long-term solutions such as renewable energy and energy efficiency are needed.

The report points out that energy poverty can be fought through dedicated programs with 100% subsidies for the installation of photovoltaic panels, solar thermal or heat pumps. These technologies can turn vulnerable consumers into prosumers and would make a significant contribution to reducing the bills. In addition, with the energy efficiency of homes and used electronics, vulnerable consumers will benefit from a reduction in energy consumption, an increase in comfort and quality of life.

“The increase in energy prices comes with an increase in social problems and a deepening of the debts of the most vulnerable people. It is important that, in addition to billing measures, that the authorities look at long-term solutions to remove as many people as possible from the category of vulnerable consumers. Renewable energy, and especially heat pumps, are an untapped potential in Romania that could benefit disadvantaged people,” said Laura Nazare, coordinator of the energy transition campaign at Bankwatch Romania.

According to the association’s analysis, the government programs launched so far have not directly targeted the vulnerable consumers, and many of them have failed or lacked continuity. Most of the support measures are financial aid, which involves subsidizing the prices of fuels already used, mostly wood, gas, coal. These types of programs do not solve the problem at the root, only its effects. In fact, the programs dedicated to vulnerable consumers identify different numbers of beneficiaries, between 1.5 million and 500 thousand, not being clear the real number of Romanians affected by this phenomenon.

The only program that addresses local energy production is that of the Ministry of Environment, which in 2019 financed approximately 800 isolated households in order to install photovoltaic panels. However, the program did not have other editions. This is the successor to similar programs launched in 2007 and 2012 that failed. At the time, the programs identified 98,000 households not connected to the electricity grid. In comparison, the Light for Romania program, launched in 2013 by an NGO, reached over 1,000 beneficiaries. To date, there have been no specific measures to increase the energy efficiency of vulnerable people.

In this context, Bankwatch Romania recommends several measures to increase the degree of electrification and reduce energy poverty:

  • Strengthen existing databases on vulnerable consumers and the population affected by energy poverty
  • Reforming the legislative framework to capitalize on the potential of energy communities and lead to the development of the consumer sector among vulnerable consumers
  • Introduced in the Operational Programs the investment priorities addressed to vulnerable consumers
  • Reconfiguring existing programs funded by the Environment Fund or developing new initiatives to install renewable technologies in households that cannot meet their minimum energy needs
  • Creating programs to increase the energy efficiency of residential buildings specifically for citizens facing energy poverty
  • Increasing the capacity of local governments to attract the necessary funds to increase the energy efficiency of housing and to implement green alternatives for energy production for vulnerable consumers.

Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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