Memorandum submitted by eaga (EEFP 44)
The Committee will consider in particular the
following:
1. Defra's Departmental Report 2008 shows
slippage against PSA 7 on eliminating fuel poverty in vulnerable
households by 2010, with a rise in the number of households in
fuel poverty. Does Defra need to redefine its approaches to ensure
it meets the statutory 2010 target?
The elimination of fuel poverty in vulnerable
households by 2010 was always a challenging target. It was set
at a time of relatively stable energy prices, and a less volatile
energy security background. The significant rise in the number
of households in, or at risk of, fuel poverty has added to the
challenge, and the Prime Minister's recent announcement of measures—including
reinstating Warm Front funding for this year and next—has
been welcome. We understand Defra's target to be subject to judicial
review and it would not be appropriate to comment further.
2. How effectively can policies aimed at addressing
the energy efficiency of dwellings tackle fuel poverty, given
recent rapid increases in fuel prices, and how can strategies
be developed to join up energy efficiency approaches with those
on fuel prices and income maximisation?
There are three elements which contribute to
fuel poverty: the energy inefficiency of homes; household income;
and the price of fuel. None of these elements lends itself to
a quick fix. From the point of view of the fuel poor it would
clearly be easiest and most immediately beneficial to lower fuel
prices and/or increase household income. Such action would do
nothing to reduce fuel use or increase the energy efficiency standards
of the housing stock; nor would it necessarily target the fuel
poor.
Against the background of pressure on energy
resources, and the need to cut emissions, the priority must be
to increase energy efficiency and thus reduce the amount of fuel
used to achieve a similar or better level of heat and/or comfort.
Nevertheless, eaga's experience with Benefit
Entitlement Checks has shown that initiatives to increase household
income can run effectively alongside schemes aimed at housing
stock, and can increase levels of eligibility for such schemes.
Little has been done to date to assist fuel
poor households by reducing fuel costs. Eaga believes there to
be scope for additional beneficial tariffs for fuel supplied to
fuel poor households, but this will need significantly increased
co-operation between Government, the fuel utilities and other
providers.
3. Does the UK Energy Efficiency Action Plan
2007 give sufficient weight to the need to address fuel poverty
as well as tackle greenhouse gas emissions through increased use
of energy efficiency measures?
The UK Energy Efficiency Action Plan 2007 treats
the issue of fuel poverty as a small but not insignificant element
of the need to raise levels of energy efficiency. It does not
look at the treatment of fuel poverty in any but energy efficiency
terms; ie it does not deal with income and expenditure related
elements of fuel poverty. The Action Plan needs to be looked at
alongside the fuel poverty strategy and other elements of the
Government's plans for tackling inequality in wealth and energy
use.
4. What should be the comparative contribution
of government and energy supply industry programmes to achieving
fuel poverty objectives, and what levels of investment are required
(for example for Warm Front, the Carbon Emissions Reduction Target
(CERT) and the Supplier Obligation post 2011)? How can these programmes
be better integrated?
It is not for eaga to say what the levels of
investment should be for Government or the utilities. There is
already a significant level of integration at the household level
between CERT and Warm Front (and between both and Warm Zones),
much of it engineered by eaga as managing agent of Warm Front.
There are risks—albeit low—in such integration of
duplication, and, conversely, of some approaches to the fuel poor
falling down the cracks between schemes. On the whole, co-ordination
and integration of basic heating and insulation measures is effective
and has led to a significant increase in the numbers of vulnerable
households able to benefit from Warm Front measures.
5. What should the longer term strategies
be, in particular for those in the social housing sector after
Decent Homes, and what role should the energy supply industry
have post CERT (post 2011)?
6. How can we make greater progress on hard
to treat homes (for example solid wall properties or those not
connected to mains gas supplies)?
As we say below, the use of new heating technologies
will be vital for those households off the gas network. These
technologies exist, as do effective methods for insulating solid
wall properties. It would not be administratively difficult to
include these technologies in a scheme such as Warm Front, or,
in principle, into CERT.
7. How should smart metering, new technologies
and microgeneration be deployed and incentivised in fuel poverty
approaches? Is there sufficient scope in current approaches to
apply the most appropriate solutions?
There are concerns about introducing new technologies
for vulnerable people, who should not be used as guinea pigs.
However, there are renewable and microgeneration technologies
which are well established and could be introduced into fuel poverty
schemes successfully. This is particularly true for households
off the gas network where the only heating systems available until
now have been oil-fired or electric, the installation of neither
of which represents the most economic help for the fuel poor at
a time of rapidly rising energy costs. The introduction of solar
thermal (hot water heating) or air source heat pumps could provide
a practical and relatively low cost alternative for these households.
A start has been made within Warm Front, but much remains to be
done, and the Scheme architecture would need amending to support
large scale intervention of this kind.
Smart metering may help towards behaviour change.
It is questionable as to whether this will help more in the fuel
poor sector or for households with higher fuel consumption. Awareness
of the level of consumption is important for all households, but
at a time of limited Government financial resources, smart metering
ranks lower than efficient heating and insulation as a measure
to help the fuel poor.
8. Is there a problem identifying those who
are already, or are at risk of becoming, fuel poor, and how can
data sharing across the public and private sector be improved
so that assistance can be targeted?
Eaga has much experience in identifying those
households who may be in fuel poverty. We use a number of sophisticated
mapping techniques to show where households have a propensity
to be in fuel poverty. Eligibility for Warm Front and similar
schemes is, however, determined by use of the proxy measure of
benefit receipt. This has some limitations in identifying the
fuel poor. Only a more intrusive test involving household income
and fuel expenditure could positively identify those, unless there
were to be data sharing between the fuel utilities, the public
sector and those delivering measures on behalf of the public sector.
The Digital Switchover Help Scheme (which eaga
administers on behalf of the BBC) broke new ground when DWP introduced
legislation to allow the Scheme carefully controlled access to
names and addresses of people eligible for the Scheme by virtue
of their age and benefit status. A similar provision for schemes
for the fuel poor would allow a more focused approach, but would
need input from the fuel utilities to allow the focus to be on
the fuel poor rather than on the vulnerable more generally. The
ability to share data across Government schemes targeted at similar
population groups would also help to join up provision more generally.
9. What are the specific issues for new homes
and how can strategies ensure that all new homes minimise the
potential for occupiers to experience fuel poverty?
10. How does the Winter Fuel Payment system
impact on fuel poverty and could this funding be better utilised
to tackle the underlying issues leading to households becoming
fuel poor?
There is a great deal of anecdotal evidence
that the Winter Fuel Payment is simply used as an addition to
general household income and not prioritised for paying fuel bills.
Nor is it targeted at those who have most difficulty paying fuel
bills. There is no necessary correlation between age and fuel
poverty, and a better targeted contribution to the fuel poor's
ability to pay for fuel would be more appropriate.
eaga
October 2008
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