Energy poverty is not recognized in Finland

About 7–15 percent of Finnish households are energy poor, which at the highest estimate means about 300,000 homes. According to a recent study by Aalto University and the Finnish Environment Institute, energy poverty is linked, among other things, to the form of heating, place of residence, labour market situation, family size and gender. 

Energy poverty refers to the simultaneous occurrence of high energy expenditure and low income. The study found that a significant share of households experiencing energy poverty heat their homes with electricity or oil. They typically live outside city centres and belong to the three lowest income deciles. 

Energy poverty is experienced particularly by women living alone. A higher number of children also increases the risk of energy poverty, whereas in families with two adults the risk of poverty is lower than in single-adult households.

According to the researchers, the societal and structural reasons for energy poverty have not been sufficiently recognised in Finland. The impacts of energy poverty on people’s everyday lives and wellbeing, as well as ways to support households in a vulnerable position, have also been examined too little.  

‘The most serious strain from energy costs is on households with direct electric heating whose residents have not been able to afford energy renovations. Another key factor causing inequality is electricity transmission charges, which in rural areas can be many times higher than in the most affordable urban areas. Women are pushed into energy poverty in part by lower wages and pensions,’ says Aalto University Academy Research Fellow Sini Numminen.

Ways to influence the size of the electricity bill vary

The ways to control the price of the electricity bill are limited in homes where heating is based essentially only on electric radiators. In these houses, intelligent control of consumption is not possible.

‘The only option may be to switch off the radiators or significantly lower the temperature. Living in the cold can have serious health, mental health and social consequences. Shame about the situation and a sense of helplessness sap people’s strength in ways that are difficult to measure,’ Numminen says.

In Finland an estimated quarter of households have direct electric heating. The roots go back to the oil crisis of the 1970s, after which Finland invested heavily in electricity production. Electric heating was easy to install and electricity was cheap for decades. Later, structural changes in the energy markets, the move away from fossil fuels, the reduction of dependence on Russia and the growth of production based on renewable energy have fundamentally changed the markets. 

‘Support for giving up oil heating and electricity subsidies during the energy crisis have largely gone to people other than those on low incomes. This shows that the most vulnerable households in the energy markets have not been identified accurately enough. The neglect of energy poverty has led to inefficient and unfair support policies,’ says Finnish Environment Institute Senior Research Scientist Santtu Karhinen. 

In the researchers’ view, energy companies and authorities also bear responsibility. Those with payment difficulties should be offered payment plans, debt collection should be ethical and energy-vulnerable consumers should also be identifiable and protected by legislation from having their electricity cut off. At the same time, the fairness of charges should be monitored more closely than at present and low-income households should be taken into account better in decision-making concerning the electricity market.

The research is part of the RePower-CEST project funded by the European Union’s NextGenerationEU instrument. The aim of the project is to support national decision-making in order to accelerate the transition to a clean energy system. 

The work has also received funding from the Academy of Finland: Saving, shifting or shivering? Mapping and measuring energy poverty in the Nordic countries (EP-Nordic).

Further information
Academy Research Fellow Sini Numminen, Aalto University, tel. 050 434 0221, sini.numminen@aalto.fi 
Senior Research Scientist Santtu Karhinen, Finnish Environment Institute, tel. 029 525 1889, santtu.karhinen@syke.fi