Exploring the energy burden disparity across Dutch income groups: A historical perspective

Abstract

In the Netherlands, rising energy prices have raised concerns about energy affordability and inequality among Dutch households in recent years. These price shocks have exacerbated disparities in household Energy Burden (EB), which is defined as the share of disposable income spent on energy. How structural drivers have shaped these disparities remains poorly understood. This study investigates how EBs evolved between 2006 and 2023 and how energy prices, energy consumption, income, and the energy mix contributed to changes across income groups, offering a comparison with earlier, more stable periods. Using detailed microdata from Statistics Netherlands, households were classified into four income groups, and EB trends were examined longitudinally. A Log-Mean-Divisia Index decomposition quantified the contributions of each component, complemented by counterfactual EB trajectories to isolate effects over time. Results show that median EBs declined until 2017, after which they rose again due to sharp energy price increases. Meanwhile, EB inequality widened: Low-Income Households (LIHs) faced persistently higher EBs that declined much less than those of High-Income Households (HIHs). LIHs experienced stronger price effects, which were offset by reductions in consumption and modest income growth, while HIHs benefited from a proportionately larger cushioning effect of income growth. This underscores the importance of adopting a longitudinal perspective as it reveals that LIHs maintained stable EBs not through improved affordability, but by sharply reducing energy use. Changes in the energy mix only played a minor role. Further, analysis of housing tenure revealed that social renters have substantially higher EBs, but homeowners are most vulnerable within the lowest income group. By offering a unique long-term perspective, this study provides valuable insight into the evolution of energy affordability and inequality in the Netherlands. Thus, it calls for inclusive targeted energy policy to empower those least able to adapt.