Category: News

Ofgem, the regulator for domestic gas and electricity markets, are consulting on proposals to improve outcomes for prepayment meter consumers who self-disconnect (not topping-up their meter) and/or self-ration energy (limiting energy use).

In 2018, Ofgem’s Consumer Engagement Survey identified that 1 in 10 prepayment consumers had self-disconnected in the last year. This equates to 350,000 gas and 450,000 electricity customers. End Fuel Poverty Coalition member, Citizens Advice, have previously reported that 16% of prepayment meter customer report running out of credit annually, with 50% citing keeping their meter topped up as being a significant daily concern. 72% of prepayment customers who self-disconnect are vulnerable to cold homes (i.e. households containing children or someone with a health condition).

Ofgem aims to reduce the proportion of customers who engage in self-disconnection and self-rationing practices and in so doing, reduce the detriment caused. The consultation includes the following proposals:

•  Introducing a requirement on suppliers to identify consumers and provide support to those self-disconnecting and self-rationing.
• Formalising emergency, friendly and discretionary credit offered by suppliers to those in temporary crisis situations.
• Incorporating the Ability to Pay principles (requiring suppliers to consider a customer’s ability to pay when setting debt repayment rates) into the supply licence condition.

The full consultation document can be accessed here. Responses can be sent to response CDconsultations@ofgem.gov.uk  by September 20th 2019.

The Department for Business, Energy and Industrial Strategy (BEIS) have opened a consultation on the fuel poverty strategy for England. This will assess the implementation of the 2015 strategy and seek views on proposals for an updated fuel poverty strategy. The full consultation document is available here.

The Government will retain the fuel poverty target and milestones set out in the 2015 strategy, which aims to bring as many fuel poor homes as reasonably practicable up to a Band C by 2030, Band D by 2025 and Band E by 2020.

However, BEIS propose to change the way fuel poverty is measured (currently ‘Low Income High Cost’) by implementing a ‘Low Income Low Energy Efficiency’ (LILLE) metric. Under this definition, households will be deemed fuel poor if their disposable income (after housing and energy costs) is below the poverty line and they live in a property with an energy efficiency rating of Band D or lower. The LILEE measure would increase the number of households considered fuel poor by approximately 1 million, bringing the total number of fuel poor households in England up to over 3.6 million.

Also included in the document, is an update to the vulnerability principle to clarify those most at risk to the impacts deriving from cold homes. This may include better aligning vulnerability with that outlined in the National Institute for Health and Care Excellence (NICE) guidance on cold-related ill health. BEIS also propose adding a new principle to the strategy which would ensure policies relating to fuel poverty complement other Government priorities including the Clean Growth Strategy.

A spokesperson for the End Fuel Poverty Coalition (EFPC) said:

“The UK Government’s consultation on updating its fuel poverty strategy suggests that there are over 1 million more households in fuel poverty than previously recognised. 3.7 million households are now reckoned to live in cold, inadequately heated and insulated homes. The EFPC urges the UK Government to invest £1bn of public funds in a programme to bring it back on track towards meeting its statutory fuel poverty target. This is a key recommendation of the Government’s advisory group, the Committee for Fuel Poverty“.

The consultation will close on Monday 16th September 2019 at 11:45pm. Responses can be submitted online or by email (fuelpoverty@beis.gov.uk).

EFPC member National Energy Action’s initial response to the consultation can be read here.

The Business, Energy and Industrial Strategy (BEIS) Committee have published a report assessing the Government’s action on energy efficiency.

‘Energy efficiency: building towards net zero‘ highlights the important role of energy efficiency measures in tackling fuel poverty, reducing energy bills, meeting net zero greenhouse gas emissions and unlocking significant long-term economic returns. However, with the UK housing stock remaining among the least efficient in Europe, the Committee stresses that the Government is not set to meet its targets. 

A summary of the key points and recommendations are as follows:

Investment and infrastructure. The amount of public money invested in residential energy efficiency schemes in England per capita, is lower to that in devolved nations.

Recommendation: The Government should be clear about how much public investment is needed to meet EPC targets.

Retrofitting homes. As the Government’s only energy efficiency scheme, the Energy Company Obligation (ECO) is unsuitable due to limited funding, households required to make a financial contribution towards measures and the focus on low-cost rather than need. The introduction of new regulations in the private rented sector is welcome but the impact and scope is limited.

Recommendation: A three tier funding system should be established to support fuel poor households. This would consist of ECO, centrally funded local authority schemes and an additional national funding safety net. Higher standards of installation should be enforced and a comprehensive advice network established.

Recommendation: The cost cap in place for landlords should be increased and local authorities should receive adequate resources to enforce standards.

New homes. Most large housebuilders are only likely to raise the energy efficiency of stock  if they are required to by regulation.

Recommendation: Government should legislate the Future Homes Standards as soon as possible. The Building Regulation regime should also be revised to remove the loophole which permits developers to build homes to outdated energy efficiency standards.

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Independent responses from End Fuel Poverty Coalition members the Energy Saving Trust and National Energy Action, can be read by clicking on the members name.

The Committee on Fuel Poverty has published a proposal for a £1.08 billion Treasury-funded household energy efficiency programme ‘Challenge Fund’.

This follows, the CFP’s Third Annual Report, which stated that current resource, programmes and policies were insufficient in meeting the Government’s fuel poverty target and corresponding milestones. It is estimated that by 2020 just over half of properties with an Energy Performance Certificate (EPC) of Band F or G, will have been upgraded and therefore leave a significant proportion of fuel poor households living in inadequate homes.

The proposed Challenge Fund would run from April 2020 to April 2022 and would complement the Energy Company Obligation (ECO) and the Private Rented Regulations (PRS) requiring landlords to bring properties up to a minimum of a Band E. The fund would be primarily targeted to deliver energy efficiency improvements in private sector properties, which equate to half of all fuel poor F and G homes. Households living in a Band E property will also be able to receive support in cases where ECO is not a suitable intervention. The fund would:

• Assist in meeting Government targets in improving energy efficiency of domestic properties.
• Identify opportunities and choices for future energy efficiency programmes.
• Encourage innovation in technology and delivery.
• Develop new proxies for targeting fuel poverty using data sharing powers under the Digital Economy Act. This in turn would reduce the cost of energy efficiency programmes.

The CFP’s full proposal can be downloaded here.

The Department for Business, Energy and Industrial Strategy (BEIS), have today published the Annual Fuel Poverty Statistics in England, 2019 (2017 data). This is an annual statistical release, which provides a comprehensive view of fuel poverty in England.

Headline figures include:

• 2.53 million households in England are in fuel poverty. This equates to 10.9% of all households and represents a 0.2% decrease since 2016 (2.55 million).
• The average fuel poverty gap, which is the amount of money a household would need to heat their home to an adequate temperature and remain above the poverty line, is £321. This is down from £333 in 2016.
• Fuel poverty is highest in the private rented sector (19.4%)
• Single parents are the highest proportion of households in fuel poverty (25.4%) with a fuel poverty gap of approximately £315.
• 92.2% of fuel poor households live in properties with an energy efficiency rating of Band E or higher.

 

Ofgem, the regulator for gas and electricity markets, has today confirmed its network price control methodology.  The next round of network price controls, otherwise known as RIIO-2, will run from 2021 to 2026 and aims to deliver a smarter and sustainable energy network at a lower cost to consumers.

The methodology highlights the imperative role distribution networks have in supporting consumers in vulnerable situations. As such, the assistance network companies provide to consumers in vulnerable situations will increase. This includes:

• Enhanced licence conditions
• Incentives to ensure vulnerability is considered during customer interaction
• A reform of current innovation funding and additional funds to support projects which help vulnerable customers.

Ofgem have confirmed that the fuel poor network extension scheme, which provides fuel poor households access to free or subsidised gas network connections, will continue. A re-opener will also be introduced to allow for networks to deliver energy efficiency measures, should the Government decide that networks have a role in providing such to fuel poor households.

 

The Annual Compendium of Scottish Energy Statistics, published by the Scottish Government, has revealed that the downward trend in fuel poverty has continued.

Approximately 613,000 households in Scotland lived in fuel poverty in 2017, equating to 24.9% of all households. 7% (174,000) of these were living in extreme fuel poverty (when a household is required to spend over 20% of their income on fuel). These figures are the lowest recorded since 2005/06.

End Fuel Poverty Coalition member National Energy Action (NEA), has issued a call for evidence to better understand the successes and challenges of delivering work towards implementing fuel poverty strategies in each UK nation.

Stakeholders are invited to contribute by completing a survey. This should take no longer than 30 minutes, depending on the length of your responses and how many sections you complete. The surveys will be open until 4pm on Friday 31st May 2019.

• To complete the survey for England, please click here.
• To complete the survey for Northern Ireland, please click here.
• To complete the survey for Scotland, please click here.
• To complete the survey for Wales, please click here.

The evidence collected will contribute to NEA and Energy Action Scotland’s Fuel Poverty Monitor, an annual investigative report into fuel poverty levels in the UK and within each of the four nations. The Monitor also investigates the key policies and practices that are in place to tackle cold homes and makes country-specific and national recommendations. This years Monitor will review progress in delivering fuel poverty strategies and meeting statutory targets in each of the nations.

If you require any support in relation to the survey, please contact louise.clanfield@nea.org.uk.

As of April 2019, landlords who own homes with an Energy Performance Certificate (EPC) of Band F and G, will be required to install energy efficiency measures in order to bring the property up to a Band E. The changes are expected to affect around 290,000 properties, representing 6% of the domestic market. Householders living in these homes are expected to save an average of £180 annually. The Government’s press release can be read here.

The regulations will apply to landlords with properties in England and Wales, requiring them to spend up to £3,500  bringing homes up to a EPC Band E. However, should it cost more than this, landlords will be able to apply for an exemption.

The private rented sector has the highest level of fuel poverty, with 19.4% of households in the sector fuel poor, compared to 7.7% of owner-occupiers and the national average of 11.1%. Excess cold is the largest avoidable cause of death in this sector, with 30% of preventable winter deaths attributed to living in a cold home.

Statistics released by the Department for Business, Energy and Industrial Strategy (BEIS) reveal an increase in household energy bills in 2018.

The figures show that the average household energy bill (based on an annual fixed consumption of 3,800 kWh for electricity and 15,000 kWh for gas), increased by £65. This represents a 5.2% increase from 2017, bringing bills up to £1,314). On average, electricity bills increased by £49 and gas £16.

When based on actual annual consumption, households have seen a increase of 3.9% in cash terms (to £1,155) and a 1.9% real term increase (£1,010 in 2018) in their combined energy bills.

The figures highlight the pressing  need for Government to take urgent action to tackle fuel poverty, which affects 2.55 million households in England alone.