Household Energy Burdens in Europe following the Russian Incursion into Ukraine

Poblete Cazenave, M. & Pachauri, S. ORCID: https://orcid.org/0000-0001-8138-3178 (2023). Household Energy Burdens in Europe following the Russian Incursion into Ukraine. IIASA Working Paper. Laxenburg, Austria: WP-23-011

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Abstract

Recent global events such as the COVID-19 pandemic and the Russian invasion of Ukraine have worsened the already difficult situation of households at risk of energy poverty in Europe. Estimates for 2020 suggest that 43% of natural gas in the EU was supplied by Russia, a substantial share of which met household heating and cooking energy needs. Severe supply constraints and corresponding price volatility following the Russian invasion of Ukraine have substantially affected household energy affordability across Europe.

In this work, we quantify how the prior dependence of European countries on gas imports from Russia affected the direct energy burdens suffered by households following the Russian offensive. We then consider how these energy burdens may evolve under different scenarios of the duration of the conflict. We use microdata from the European Household Budget Survey (HBS) from 2010 and 2015 to analyze household energy burdens, measured in terms of the share of the total household budget spent on energy, and the factors affecting these across EU countries and across income levels within countries. We also use data on national energy price trajectories from Eurostat and time series autoregressive integrative moving average (ARIMA) models to predict future energy prices under alternative scenarios of the length of the conflict. Finally, to predict changes in the energy burden of European households under these alternative scenarios, we use XGBoost (eXtreme Gradient Boosting) a state-of-the-art machine learning algorithm.

We find that households that use gas tend to have a higher energy burden than those that do not. Moreover, for households that live in a country where most of the gas imports come from Russia, this is exacerbated, particularly for those at lower income levels. Under alternative scenarios of the length of the conflict, we find that that low-income households would be the most affected, with a longer war likely to raise the energy burden across all income groups.

Our findings are useful to inform policies to address energy poverty, particularly households most vulnerable to energy price volatility in Europe. In the short-term, targeted transfers and assistance hold promise and are necessary to address the exacerbated energy poverty burden, particularly for low-income and vulnerable households. However, in the longer term, efforts to improve the efficiency of the European building stock and heating systems, as well as to enhance energy security will likely be needed.

Item Type:	Monograph (IIASA Working Paper)
Research Programs:	Energy, Climate, and Environment (ECE) Energy, Climate, and Environment (ECE) > Transformative Institutional and Social Solutions (TISS)
Depositing User:	Luke Kirwan
Date Deposited:	12 Dec 2023 15:23
Last Modified:	12 Dec 2023 15:23
URI:	https://pure.iiasa.ac.at/19256

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