1.
Introduction
1.1
In
2000, the UK government set a target to end fuel poverty by
2016. In 2010 Wales launched its fuel poverty
strategy[1].
Since that time, rising fuel prices have largely undone the
progress made through energy-efficiency improvement
programmes. There is still a pressing need to tackle cold,
unhealthy homes.
1.2
The
Energy Saving Trust is committed to reducing the UK carbon
emissions, but it is clear that fuel poverty and the sustainable
use of energy can only be addressed together – fabric
measures coupled with sustainable support for behaviour
change.
1.3
Tackling fuel
poverty can only be achieved in partnership. The Energy
Saving Trust is delighted to be working on the Nest
and arbed2 programmes in Wales. Delivery is achieved by
getting to the households needing support. This is achieved
through collaborative working with an extensive network of partners
and stakeholders, engaging with customers at risk of fuel or severe
fuel poverty and providing impartial and individual support.
Additional essential support is by onward referral for detailed
financial help and installation of energy efficiency measures,
where relevant.
1.4
We
want to see Local authorities taking the most proactive role
possible to tackle fuel poverty, and government guiding them to do
this through a reinvigorated Home Energy Conservation Act.
HECA was repealed in Wales because a number of sources (including
the National Assembly Audit Committee) commented it was not
working. It was superseded by the National Energy Efficiency
and Savings Plan and the standards for social housing were set
through the Welsh Housing Quality Standard[3].
But the collection of core data to make informed decisions is an
essential part of delivering the right solutions to the right
properties.
1.5
Specifically, we
want local authorities to:
1.6
Develop financing
strategies for large-scale energy efficiency retrofit;
1.7
Ensure they have
the right data about their housing stock and communities to target
action;
1.8
Work
proactively with social and private landlords in their area,
particularly those who have F and G rated homes. Local
authorities should be fulfilling their duties under environmental
health legislation to monitor homes for serious cold hazards
(leading to damp and mould);
1.9
Ensure all
householders, particularly fuel-poor householders, are able to
access free and impartial support and advise about what they can do
in their situation to better manage their energy use, reducing
their bills while maintaining their comfort.
1.10
Fuel
poverty mapping for Wales, linked to solutions implemented.
The last Wales wide mapping was produced in September 2008[4].
1.11
Energy suppliers,
government and Green Deal providers collaborating around
appropriate use of data to reach customers who can benefit from
Green Deal and ECO, for example, by making best use of Energy
Performance Certificates and other existing data;
1.12
Energy suppliers,
government and consumer groups ensuring all customers are given
effective advice and support alongside the smart meter roll out,
with further support for vulnerable customers;
1.13
Funders in the UK
and across Europe implementing research and development into how
smart technologies can support energy bill management and financial
inclusion for poorer households.
1.14
DECC’s Fuel
Poverty Advisory Group and many other organisations have argued
lessons can be learnt from policy progress in Wales and Scotland
where the Green Deal and ECO will work alongside ongoing programmes
of direct government grants for households. Looking north of
the border will allow greater information and sharing,
collaborating to better design solutions appropriate for those in
fuel poverty. The proposal to link home energy efficiency
investment to carbon taxes could be a way for all UK governments to
target revenue on this critical issue.
1.15
We
note the finding of Professor John Hills’ review for UK
government into the measurement of fuel poverty stated “the
daunting scale of the challenge” we will almost certainly
still face to address fuel poverty in 2016. So already we
have a sign the English target will not be met even under the new
definition, even though that would have represented a considerable
reduction in the numbers of those classed as in fuel poverty in
Wales. More action is required.
2.
Strategic context
2.1
In
the year 2010, the government made a commitment to the low-income
households. By 2016, it said, fuel poverty in this country
would be history. At the time, 2016 seemed a long way away;
the target appeared reasonable – more than reasonable for a
developed nation, some would say – and eminently
achievable.
2.2
It is
generally recognised that the best way to protect people against
fuel poverty is with energy efficiency improvements supported with
relevant impartial and sustained advice. But, in recent
years, all the progress made in tackling fuel poverty through
energy efficiency has been undone through rising fuel prices.
Electricity bills rose by 20% (in real terms) in the six years from
2007, and gas bills rose by 41% (in real terms) over the same
period[5].
2.3
The
result is that levels of fuel poverty now are estimated to be about
the same as they were when the UK government committed to abolish
the problem. The UK Fuel poverty update 2014[6]
estimates that
6.59m households were in fuel poverty, an increase of almost 2.25m
since DECC figures published for 2011, a significant 29% of Welsh
households.
2.4
The
need to tackle cold, unhealthy homes does not go away. The
Hills Review of fuel poverty (Welsh Government analysis for
Wales)
estimated that more people die because of cold homes than die on
the nation’s roads[8].
In Public Health White Paper, published in 2010, the UK Government
stated, “We could prevent the yearly excess winter deaths
– 35,000 in 2008/09 – through warmer
housing”. A large proportion of morbidity is in those
struggling with fuel bills.
2.5
Energy Saving
Trust have helped thousands of people struggling to pay their
energy bills each year, building a clearer picture of the actual
situation from direct householder engagement. We’ve
carried out analysis of our energy saving advice services in
England and Wales, finding: more than a quarter (28%) of our
customers find it difficult to heat their home; six out of 10 (62%)
worry about energy bills; one fifth (20%) say energy bills are a
cause of real personal stress.
2.6
We
also asked UK customers how much they spend on energy bills and
found: 21% spent more than a tenth of their household income on
fuel; 11% spent more than a fifth of their household income on
fuel.
2.7
If
you are in fuel poverty you are not in control of one of
life’s basis needs. It means you are not able to use
the energy you need, when you need it, to keep your home warm and
comfortable. New technology can help to give back some of
that control and the smart meter roll out will be a fundamental
step in the re-engagement of households with their energy use,
while providing mega data on consumption. But the flow of
accurate, up-to-date information from this data is vital for the
delivery of support to the households that most need
it.
3.
What does the data tell us?
3.1
Fuel poverty
across the UK in 2011 (DECC) stood at: England 15% of all
households; Scotland 25%; Wales 29%; Northern Ireland 42%.
The issue is not diminishing.
3.2
Energy Saving
Trust undertook analysis of the data available on the housing stock
in Wales, based on the most recent data – Living in Wales
2008 - for Welsh Government in 2012[9],
which concluded:
3.3
The Living
in Wales 2008 survey shows that there were 330,000 households in
fuel poverty in Wales. Analysis based on the Association for
the Conservation of Energy (ACE) refurbishment calculator estimates
that it would cost £2.45bn to remove 95% of households in
Wales from fuel poverty by improving the energy performance of
their homes. Appendix 1 details the measures applicable to
homes in fuel poverty in 2008 in order to remove 95%.
3.4
This
programme could save around £283 million per year in energy
bills, which would likely be reinvested in the local Welsh
economy.
3.5
5% of Welsh
households could not be removed from fuel poverty solely by
improving the energy performance of their homes – these
households would need some extra assistance, for example increased
income or help securing a good deal on their bills to remove them
from fuel poverty.
3.6
The approach
could reduce residential CO2 emissions by around 1.5
MtCO2e/year[10].
The Welsh Government’s 3% a year greenhouse gas reduction
target in the residential sector equates to around 0.22
MtCO2e/year, every year.
3.7
60% of
households in fuel poverty in 2008 could be removed from fuel
poverty for £333m by installing basic measures costing no
more than £3,300 per house, with a greater reduction if done
as a mass retrofit programme. Measures such as loft
insulation, cavity wall insulation, draught-proofing and new
boilers coupled with specific, relevant and credible advice on
behaviour changes to maximise savings while maintaining adequate
warmth and comfort with the consequence of improvements to health
and wellbeing. This compares favourably to the current
refurbishment projects which are working to a figure closer to
£6,000 per house
3.8
We
note from the
Welsh Government water strategy, future focus will be on reducing
water poverty and hence bills. Our recent At Home with Water
Report highlighted that 25% of the average energy bill is
attributable to hot water use in the home, a major portion of
energy bills. Simple measures and advice can be incorporated
in Nest and arbed programmes, with immediate
benefits.
4.
Energy company obligations (ECO)
4.1
We
strongly believe
the best way to protect householders from rising energy bills in
the long term is home energy efficiency measures with relevant
advice and support. In the context of last winter’s
political debates about energy bills, we do not agree with the
Westminster Government’s decision to cut the ECO programme in
order to deliver short term reductions in bills.
4.2
We
are concerned at the detrimental impact of the cuts, for example on
the delivery of solid wall insulation, a key measure for the
transition to an energy efficient building stock and a low carbon
economy, particularly relevant to such a significant proportion of
the Welsh Housing stock.
4.3
Commitments
have
now been made at the highest level and achieving a
£30-£35 cut on consumer bills from ECO is seen as a
political necessity, but will not make much of an impact to those
in, or approaching fuel poverty. We strongly believe that the
cuts proposed in the current consultation go beyond what is
required to achieve that level of reduction on bills, while leaving
a legacy for those in fuel poverty and living in “leaky
homes”.
4.4
As
evidence, we point to the
rapidly falling price in brokerage for all three
sub-programmes. Analysis by ACE shows that DECC’s
Assessment of Impacts may underestimate carbon emissions reduction
obligation (CERO) delivery achieved to date. If so, only a
very small element of additional delivery is required under CERO to
meet the 2015 delivery target. In the light we are
concerned
there will be a reduction in delivery, and as such, fuel poverty
reduction.
4.5
We
support action to
improve ECO in order to: minimise
additional customer contributions within home heat cost reduction
obligation (HHCRO). Customers also need greater clarity and
advice about these charges; ensure
more
support from HHCRO reaches electrically heated homes;
ensure
the
2015-2017 ECO programme reaches groups who have not fared well
under ECO and its predecessor obligations – such as private
rented tenants and people in remote rural areas;
expand
relevant use
of ECO funds for innovative solutions such as recent work on park
homes.
4.6
Energy
Saving Trust works closely with all devolved governments. It
is important that changes to ECO (for example in regard to
additionality rules) do not restrict devolved governments
from promoting the
use of ECO finance alongside devolved government programmes to
maximise the benefits for those in fuel poverty. Even through
the consultation has not reached a conclusion, there are already
changes being implemented in the approach adopted by energy
obligated companies in the way some funding is allocated and the
measures targeted.
Appendix 1
|
Measures installed
(as modelled):
|
Number of measures
|
Cost (£m at 2008 prices)
|
% of Welsh properties requiring
measure
|
|
Loft top-up
|
145,000
|
£26m
|
44%
|
|
Loft – full insulation
|
44,000
|
£11m
|
13%
|
|
Cavity wall insulation
|
52,000
|
£13m
|
16%
|
|
Internal wall insulation
|
7,000
|
£17m
|
2%
|
|
External wall insulation
|
62,000
|
£572m
|
19%
|
|
Double glazing
|
16,000
|
£75m
|
5%
|
|
Draught proofing
|
108,000
|
£11m
|
32%
|
|
Energy efficient lighting
|
288,000
|
£6m
|
87%
|
|
Gas condensing boiler
|
134,000
|
£266m
|
40%
|
|
Oil condensing boiler
|
77,000
|
£230m
|
23%
|
|
Biomass boiler
|
16,000
|
£114m
|
5%
|
|
Air source heat pump
|
1,800
|
£14m
|
1%
|
|
Ground source heat pump
|
11,000
|
£143m
|
3%
|
|
Improvements to heat distribution
|
28,000
|
£173m
|
9%
|
|
Solar water heating
|
87,000
|
£416m
|
26%
|
|
Solar electricity generation
|
67,000
|
£365m
|
20%
|
|
Total
|
|
£2,450m
|
|
Table
1:
Measures applied to Welsh homes to remove 95% of these households
from fuel poverty (2008 data baseline)