Energy Poverty in Germany

I posted last week about rising levels of poverty in Germany. The following report focuses on energy poverty — the increasing difficulties low- and medium-income citizens have in paying their basic home heating costs.

Many thanks to Hellequin GB for translating this article from Focus Online. The translator’s comments are in square brackets:

Middle class also affected

Poverty threatens: Every fourth German household can no longer afford energy

Every fourth household in Germany spends more than ten percent of its income on energy. This is the result of a study by the Institute of German Economics [IW]. The number of people affected has risen sharply — including in the middle class. What can now be done against the growing “energy poverty” and why the Swedes are doing it better.

It is particularly difficult for those who are unemployed, about to retire or are single parents. Consumer prices are climbing indefatigably. Especially in the field of energy, costs have hit the roof. Experts then speak of energy poverty. This refers to households that could slip into financial difficulties due to the enormous increase in energy prices.

Those affected can no longer cover their energy costs without outside help. A new study by the Institute of German Economics shows that the proportion of households at risk of energy poverty rose to 25.2 percent in May 2022. Compared to the previous year, the experts note an increase of around 11 percentage points.

“For this reason, the measures taken by the Federal Government in the form of the abolition of the EEG surcharge, the energy price flat rate and the heating cost subsidy for households with low incomes are particularly important,” write the study authors. The graphic shows how the energy poverty risk rate has developed in Germany since 2016.

Energy poverty: This is what the graphic shows

[See the graphic at the top of this post] The blue curve (“energy expenditure 10%”) defines a household to be affected by energy poverty if it spends more than 10% of its net household income on energy expenditure. Expenditures for heating, hot water, cooking and often also electricity are included here. Expenditure on vehicle fuel is not included here.

The green curve (“energy expenditure 10% and income < 60% of the median”) is a combination of the 10% line and the relative risk of poverty line. According to the official definition, this is 60 %of the average needs-weighted net household income of the population. In this way, households with middle and high incomes that do not have to spend a large part of their income on consumer goods and basic goods such as energy can be ignored.

The yellow curve (“energy expenditure 10% and income < 80% of the median”) combines the 10% limit with the “relatively poor” and the “lower middle”. According to the authors, the rise in energy prices also leads to high burdens far into the middle class. The reason for the different approaches: “Both in Germany and internationally there is no universal definition of energy poverty.”

War in Ukraine accelerates the dynamic

From 2016 to 2020, there initially was a decrease in the number of people affected by energy poverty. From around 18% of people in private households who spent more than 10% of their net household income on energy, the value drops to 13.6 % in four years. This is shown by the blue curve. According to IW researchers, the reasons for this are higher incomes (0.8 %) and falling energy prices (-2.2 %).

In 2021, however, the picture changes. Although incomes continue to climb by 2.5 %, energy prices are rising even faster (4.7 %). The economic experts write that the sharp rise in prices on the energy market took place mainly towards the end of the year. An increase in price can also be seen as a result of the CO2 pricing for natural gas and heating oil introduced in 2021. As a result, 14.5 % of people in Germany were affected by energy poverty in 2021.

Russia’s attack on Ukraine further accelerates the process, raising the proportion of victims to 25.2% in May. The risk of sliding into energy poverty has therefore increased sharply since February 24, 2022, when the war began.

Middle class also affected by energy poverty

But not only households with lower incomes are affected by the high prices. “Energy poverty also affects the middle class,” says the IW economist Ralph Henger. This refers to households that earn between 60% and 80% of the median income. Here, the proportion of households affected by energy poverty doubled from 2021 to 2022 to around 41%. The green curve shows: After the rate fell from 8.3% in 2016 to 7.2 % in 2019, the value rose to over 10% by May 2022. The proportion of people from the low-income sector with energy expenditures of more than 10% increased sharply from 49% (2021) to 65% (May 2022).

And the yellow curve shows a similar picture. “Here, too, the energy poverty risk rate fell from 13.4% to 10.7% between 2016 and 2020. In 2021, the rate rose slightly to 11.3% before climbing to 16.8% this year,” the researchers explain.

Who is affected by energy poverty and how badly?

However, households are affected to varying degrees by the price increases in the energy sector that accompanied the war. It depends on the type of heating, the energy supplier and the insulating characteristics of the building. In addition, households are also reacting by adapting their behavior, for example by paying more attention to saving energy.

One thing is clear: In order to be able to pay electricity, gas and oil bills in the future, many households will need support. The IW researchers advocate targeted help for households that are just above the basic security limit. They are of the opinion that many of the measures in the two relief packages, such as the abolition of the EEG surcharge on July 1, will provide the greatest relief for this group.

They also demand that those who receive housing benefits and a one-off heating subsidy in the next few months should receive more benefits. “A permanent and flexibly adjustable flat-rate heating fee in the housing benefit, as in 2009 and 2010, can support low-income households in a targeted and permanent manner,” says the IW economist Ralph Henger.

The Swedish model, also a model for Germany?

In Sweden, since 2000, people have taken a completely different route. There, the government introduced the so-called “rents included model”, which is a success story. Apartments are only rented with a flat-rate rent including heating. This means that the landlord guarantees a fixed rent including heating and, in return, the tenant maintains a certain room temperature. If, as a tenant, you end up heating more than previously agreed, you pay afterwards. And if you heat less than previously agreed, you get money back. Energy poverty, as we are experiencing in Germany, is only possible if you are to blame.

And the Swedish model brings other advantages. It not only offers tenants an incentive to save. The landlord is also well advised to renovate his property in such a way that as little energy as possible is required to maintain the desired temperature — because the price for the room temperature remains the same. And on top of that, the climate also benefits: emissions from Swedish households have fallen by 95 percent since then.

Afterword from the translator:

In a country where you can live so prosperously and happily — especially as a migrant, although many of the native, taxpaying citizens can no longer afford Juergen Trittin’s ice cream ball — in 2004, the head of the Greens, Trittin, still claimed that the promotion of renewable energies cost average German households no more than a scoop of ice cream a month. In a few months, autumn and winter will be just around the corner. It will be interesting to see how many households will then be left behind — no light, no heating, no hot water… Maybe candles (or matches if necessary) will help to provide a glimmer of light in your apartment and to warm your hands a little.

7 thoughts on “Energy Poverty in Germany

  1. At least they are WOKE and the energy is off the charts at the rainbow bathhouse.
    Enjoy being a GAE rump vassal Germanistan.

  2. I hope that the diaspora, that ran away from my homeland, now suffers in their new “homes”, like the cockroaches they are.

  3. Can You imagine, the most prosperous country in Europe just not long ago, will be with out gas and electricity in the winter!!, that’s how you vote for this idiots, like SPD , Greens , FDP !! Good look you reckless Germans , keep bringing this parasites, savages to your country, !! It will be more “ prosperous “… very sad ..

  4. And this despite the fact that we are now spending much less on electricity now.
    My German Bosch refrigerator consumes much less energy than the Belarusian Atlant, which went to a landfill due to old age, and the light bulbs at home are LED. In the past, with the same lifestyle, I spent 4 times more on electricity.

  5. This article is trash.

    Blaming the increase in numbers of those who can no longer afford energy on the Russians is disingenuous. The continued stupid and poorly thought-out reaction of the American NATO lapdogs to Russian actions determines the price. And Putin is laughing all the way to the банк.

    But the whole point of the article is to deflect any blame or inquiry into the stupidity of German energy policy. Likely the effort is wasted though since most of those fools gullible enough to uncritically believe everything which is written either do not read or are German.

  6. The real energy poverty will be from the tax sucking leeches and Islamic cancer growths encouraged all over western societies.

  7. To the tune of “Can’t turn a w**** Into a Lady.” by Rebel Son

    Well friend, you’ve got a solar panel, and you think it’s really somethin’
    But they’re using you to play their game,
    Even when you pay your taxes, do your homework, the real fact is,
    Natural gas is for what you must pay.

    So don’t be anti-nuclear cause it’s left you broken, flustered with 18GWe clean energy out of play,
    They’ll lie to you and leave you, with nothing but a blackout, brown coal, nat gas and shame.

    Cause you can’t use volatile for baseload, unless you want to off yourself,
    You have to be willing, to use load following, or else you’ll freeze to death.
    You can try and try, but you just can’t make power consistent enough to help,
    NOOO you can’t use volatile for baseload, unless you’re tryna off yourself.

    I know you think you got it made, but come catch my fade, don’t pretend you even know what’s right.
    Your emissions barely budged since 2001, (not to mention on a windless night)
    So when you hear Putin laugh, you’ve fallen in his trap, with nobody but yourself to blame.
    He’ll lie to you and leave you with nothing but depression, poverty, guilt, and shame.

    Cause you can’t use volatile for baseload, unless you want to off yourself,
    You have to be willing, to use load following, or else you’ll freeze to death.
    You can try and try, but you just can’t make power consistent enough to help,
    NOOO you can’t use volatile for baseload, unless you’re tryna off yourself.

    My son, attend unto my wisdom, and bow thine ear to my understanding:
    That thou mayest regard discretion, and that thy lips may keep knowledge.
    For the lips of a strange woman drop as an honeycomb, and her mouth is smoother than oil
    But her end is bitter as wormwood, sharp as a two-edged sword.
    Her feet go down to death; her steps take hold on hell.

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