Experimental statistics: Fuel poverty, Slovenia, 2018

Definition of fuel poverty

There is no single, internationally accepted definition of fuel poverty. As part of the preparation of the National Climate and Energy Plan, SURS, together with representatives of the School of Economics and Business and the Ministry of Infrastructure - Energy Directorate, proposed the following definition of fuel poverty:
Fuel poverty is a situation in which a household is not able to afford to keep its dwelling adequately warm (and other energy services - domestic hot water, lighting, etc.) at reasonable cost.

Fuel poverty is caused by low income, prices of energy sources and their consumption, which depends on the energy efficiency of dwellings and the behaviour of people in the household.

Fuel poverty in Slovenia

We do not have data on the extent of fuel poverty in Slovenia yet. In the past, the Statistical Office calculated the share of available income that households spend on energy in dwellings. We started from Boardman's definition¹, according to which households that spend more than 10% of their income on adequate warming of dwelling and other energy services are considered as fuel poor. This approach has quite a few drawbacks. It is based on the former specific situation in the United Kingdom, the data do not show whether a household also has an adequately warm dwelling, households with insufficient energy expenditure are excluded, and households with high incomes that would be difficult to consider as fuel poor are included.

Fuel poverty indicators

As fuel poverty is a very complex phenomenon, no single indicator can fully capture all its aspects. To monitor the phenomenon, in recent years it has therefore been recommended to use several different indicators, which is also recommended by the Commission Recommendation on Energy Poverty from 2020.

To assess the extent and monitor the phenomenon of fuel poverty in Slovenia, we publish the values of several indicators, which are also monitored by the EU Energy Poverty Observatory.

Existing statistical sources were used to calculate the indicators, namely data from the Household Budget Survey (HBS) and the Living Conditions Survey (EU-SILC). Indicators from the EU-SILC have been calculated and published by SURS for a long time, while indicators from the HBS have been recalculated for the purpose of this publication. The latest data from the HBS are available for 2018, and the EU-SILC for 2019, so, where possible, we also publish data for 2019.

• In 2018, 4% of households in Slovenia were not able to keep home adequately warm (2019: 3%). This share was the highest among households with the lowest incomes, in the 1st quintile, where it was 12% (2019: 7%). In terms of accommodation tenure status, tenants (2018: 8%, 2019: 4%) were usually unable to provide an adequately warm home, while in terms of household type, one-member households (2018: 8%, 2019: 5%) and single-parent households with at least one dependent child (2018: 8%, 2019: 3%).

• In 2018, 12% of households (once or more) had arrears in utility bills (2019: 10%). Utility bills include water, sewage removal, refuse removal, electricity supply and heating costs; rent and mortgage refund are not included. The share of such households was the highest among the households with the lowest incomes, in the 1st quintile, where it was 17% (2019: 16%). In terms of accommodation tenure status, this share was the highest for tenants (2018: 20%, 2019: 15%), and in terms of household type for single-parent households with at least one dependent child (2018: 27%, 2019: 25%).

• In 2018, 12% of households had low absolute energy expenditure (their energy expenditure was lower than half of the national median). Low energy expenditure can occur due to high energy efficiency of dwellings and saving energy, but it can also indicate the so-called hidden fuel poverty, which occurs when households limit their energy consumption due to lack of financial resources.

• In 2018, 17% of households had a high share of energy expenditure in income (their share of energy expenditure in relation to income exceeded twice the national median). Disproportionately high energy expenditure can mean that households prioritize energy expenditure over other expenditure.

In addition to the previously mentioned indicators, we also experimentally calculated an indicator with which we can additionally estimate the share of fuel-poor households in Slovenia. Based on the proposed definition of fuel poverty, a review of sources and literature, practices in other countries and existing data sources, an indicator was selected based on data on energy expenditure and household income (from the HBS and EU-SILC surveys), and can, despite of the shortcomings, together with other indicators shows a good picture of the phenomenon.
According to this indicator, fuel-poor households are those whose income is below the at-risk-of-poverty threshold and at the same time have above-average energy expenditure. Experimental calculations show that in 2018 there were about 4% or 35,000 such households.

1 Boardman, B. (1991). Fuel Poverty: From Cold Homes to Affordable Warmth. London: Belhaven Press.