The importance of energy efficiency to reduce fuel poverty

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Jenny Saunders, Chief Executive of National Energy Action discusses the importance of energy efficiency to reduce fuel poverty

With winter approaching it is likely that fuel poverty, or more generally the issue of energy unaffordability and its impact on the health and wellbeing of the poor and elderly, will once again feature heavily in the news headlines. Around 2.5 million households in England (around 10%) are still classed as living in fuel poverty, and unable to afford to heat their homes, despite years of campaigning by National Energy Action and a government commitment 14 years ago to eradicate the problem by 2016.

Fuel poverty is caused by 3 factors – poor quality energy inefficient housing, low incomes, and high energy prices. Of these 3, the popular narrative tends to focus almost exclusively on energy prices, however improving the energy efficiency of our housing stock is by far the most effective way to tackle the problem in a long term and sustainable way. Government surveys show that 35% of households living in the least energy efficient properties live in fuel poverty compared to only 2% in the most efficient; that 65% of fuel poor households live in properties with Energy Performance Ratings of E, F, or G (on a scale of A-G), lacking adequate insulation and efficient heating systems.

There is also a strong correlation between fuel poverty and general poverty, and capping energy prices and mandating rebates on fuel bills for those in the lowest 3 income deciles can bring some relief, but improving the energy efficiency of their homes could save them hundreds of pounds every year, making them more resilient to anticipated future price rises.

For over 30 years NEA has promoted the benefits of energy efficiency, increasing understanding amongst policy makers and building capacity in communities and companies. Last year we assisted 27,000 low-income households – working through our Warm Zone subsidiary company and with project partners we provided insulation, heating, energy advice and income maximisation services. We supported 10,000 stakeholders to improve advice and services for their clients, and trained 2852 front-line advisors working with vulnerable people. Our experience, and the evidence that we have gathered through research and evaluation, has demonstrated that whilst improving energy efficiency is the most effective way to tackle fuel poverty, it also offers much wider benefits to society – releasing additional money into the local economy that would have been wasted on energy; enhancing streetscapes, and reducing the burden on over-burdened health services.

At a political level this has been recognised, however resources to tackle domestic energy efficiency have been inadequate. Whilst 2 million low-income households benefited from heating and insulation measures funded directly from the Treasury via the Warm Front scheme, the government’s approach to funding these measures since 2011 has been via obligations placed on energy supply companies (ECO). This market mechanism has not been entirely successful in reaching the most vulnerable and a mid-term policy review caused a hiatus in delivery and disruption in the supply chain.

We are now at something of a crossroads. The government has recently reasserted its commitment to tackling fuel poverty, this time with a new statutory target for England to ensure that as many fuel poor homes ‘as is reasonable practicable’ achieve a minimum energy efficiency standard of band C by 2030, with interim targets of Band E by 2020 and Band D by 2025. This is supported by a new fuel poverty strategy for England which is currently under consultation, presenting the most significant opportunity in a decade to influence the future direction of fuel poverty policy in England.

However, whilst NEA agrees with the overall aspiration, to reach it will require enhanced and coordinated action and additional resources. Central to the success of the strategy will be the provision of a sustainable, long-term, Treasury-funded energy efficiency infrastructure programme that is better targeted to meet the needs of fuel poor households and will ensure that help is directed to those who need it the most via locally led partnerships. We are urging the government to act on NEA recommendations which will ensure that by 2025 95% of households currently affected by fuel poverty will have affordable warmth and that future generations will not have to endure the misery of living in cold, damp homes. National Energy Action (NEA) is a national charity which campaigns for greater investment in energy efficiency to help those who are poor and vulnerable, and deliver advice and services to eradicate fuel poverty.

 

Jenny Saunders

Chief Executive

National Energy Action

www.nea.org.uk

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