• Energy Research

Retail electricity prices have substantially increased in the last decade in the European Union (EU) as a result of different regulations, raising the concern of policy makers. The growth in the support costs for electricity from renewable energy sources (RES-E) has often been singled out as a main driver of these prices. The aim of this paper is to analyse the degree of influence of RES-E promotion costs on the evolution of the retail price of electricity in the EU Member States. The analysis is carried out for households as well as for industry, with the help of a panel data econometric model. Our results show that the impact of renewable energy promotion costs on the retail electricity prices is positive and statistically significant, although relatively small. Differences across consumer types can be observed. An increase of 1% in those costs induces an average increase of only 0.023% in industrial retail prices and 0.008% in the residential retail prices. This impact on retail prices is mediated by the type of support scheme being adopted, with price-based support instruments showing a greater effect than quantity-based ones.

AbstractClimate change and the ongoing energy transition can increase energy poverty rates. To date, the main tool employed to alleviate energy poverty has involved income transfers to vulnerable households. However, measures that seek to improve a home’s energy efficiency have recently gained increasing relevance. In this study we assess the effectiveness of these two types of policy, assuming universal coverage and optimal behaviour. Results points that income transfers and energy efficiency measures have the potential to decrease the proportion of households in energy poverty; however, the magnitude of their respective effects differs greatly. The average impact of energy efficiency measures provides for a greater reduction in energy poverty rates than income transfer policies. Although the greatest reduction in energy poverty is obtained by combining both measures, this combination of tools leads to overlapping effects with income transfers making only a marginal contribution once total retrofit have been implemented.

Purpose Within the framework of EU policies and measures to develop a just and fair green energy transition model. This paper aims to offer valuable insights into a paramount concern not so well debated in the literature, i.e. the spatial variation of energy poverty. Design/methodology/approach This empirical analysis investigates the regional variation of energy poverty we draw on a sample of more than 300,000 Spanish households, extracted from the Spanish Household Budget Survey (HBS) for the period 2006–2022. To characterize the probability of a household finding itself in a situation of energy poverty the authors use a discrete choice univariate probit model. Findings The results confirm that energy poverty is a phenomenon that is asymmetrically distributed across Spain, and mainly occurs in un-densely populated regions. In addition, the findings demonstrate that the incidence of energy poverty drivers is highly heterogeneous across regions. Research limitations/implications The paper ends with some recommendations for policymakers suggesting that countries need to design an energy poverty policy for the households that jointly pursue both a correct identification of vulnerable groups and a match with the type of measure to the characteristics of each region. Originality/value This study enhances previous research by considering the case of areas at a lower level of aggregation (i.e. on the NUTS two regions in Spain called autonomous communities) and offers the opportunity to tailor policies to those regions most in need. Furthermore, to provide a more realistic picture of the complex phenomenon of energy poverty, the authors use the information for the period 2006–2022 differentiating by economic micro-cycle. This timespan allows the authors to understand the dynamics of energy poverty in periods of economic crisis, including the effects of the 2008 crisis and the present global energy crisis.

This paper highlights the importance of approaching the energy poverty problem considering the income perspective. This approach is based on the economic analysis of the relationship between energy poverty, energy consumption and elements linked to household income. Robust conclusions are presented from the empirical analysis of statistical data to quantify and diagnose the problem of energy poverty in Spain, using econometric tools. Likewise, the relative importance of household income in the energy poverty problem is evaluated. The results reinforce the idea that energy poverty should be addressed, preferably, through the general social protection system, and that mechanisms to protect vulnerable consumers should be developed within the framework of the general welfare system. Conclusions emphasize the need for a profound deliberation on how to address energy poverty with cross-cutting public policies that, in addition to the elements directly linked to energy policy, act on the main determinants of energy poverty, fundamentally linked, directly or indirectly, to the income of households.

Abstract The electricity sectors around the world continue on a slow but certain transformative path. Since the 1990s, market-oriented reform models and economic regulation have reshaped the structure and organisational environment of this industry. The increasing focus on the environmental sustainability requiring the addition of new measures and policies into the sector has added to the challenges facing the sector. In addition, in response to these strong trends, technological progress has brought significant cost reductions in some technologies and innovative technical possibilities. However, these changes are increasingly challenging the existing market designs, regulatory framework, and policies—while giving rise to new ones. This means that the sector's transition path constantly creates a diverse range of new issues and options that are in need of sound economic analysis. This also poses significant challenges to the sub-discipline of energy economics and policy analysis to play an important role in the coming years. The papers in this special issue are organised around economic analysis of the central questions of technology, market design, regulation and policy. The selected topics covered here are by no means exhaustive but are indicative of the extent of the challenges ahead. The hope is that this special issue will be followed by more similar initiatives.

A successful deployment of power generation coming from variable renewable sources, such as wind and solar photovoltaic, strongly depends on the economic cost of system integration. This paper, in seeking to look beyond the impact of renewable generation on the evolution of the total economic costs associated with the operation of the electricity system, aims to estimate the sensitivity of balancing market requirements and costs to the variable and non-fully predictable nature of intermittent renewable generation. The estimations reported in this paper for the Spanish electricity system stress the importance of both attributes as well as power system flexibility when accounting for the cost of balancing services.