6 Households off the gas grid
67. In 2007, around 2.7 million (13%) of households
in England were not connected to the mains gas grid. Around a
quarter of those households (23%) were in fuel poverty.[102]
Heating homes off the gas grid requires more expensive fuel, and
the percentage of such households in fuel poverty is comparatively
very high. The figures below, provided by National Energy Action,
indicate the scale of the problem:
| Space and water heating costs by fuel type - North of England October 2009
|
| Fuel type
| Heating system
| Annual cost
|
| House coal | Open fire with back boiler
| £1194 |
| Electricity | Storage heating and radiators
| £1220 |
| Natural gas |
Gas-fired boiler and radiators
| £878 |
| Liquid propane gas |
LPG-fired boiler and radiators
| £1699 |
| Oil kerosene | Oil-fired boiler and radiators
| £1090 |
| Fuel poverty in England - 2007 - by fuel used for main heating source
|
| % households
in group
| Number of households in group
| Total number of households in group
|
| Fuel | Not fuel poor
| Fuel poor | Not fuel poor
| Fuel poor |
|
| Gas | 88.0
| 12.0 | 15,806,000
| 1,936,000 | 17,742,000
|
| Oil | 76.9
| 23.1 | 711,000
| 214,000 | 925,000
|
| Solid fuel | 63.0
| 37.0 | 139,000
| 82,000 | 221,000
|
| Electricity | 82.6
| 17.4 | 1,256,000
| 264,000 | 1,520,000
|
| Communal | 90.2
| 9.8 | 256,000
| 28,000 | 283,000
|
| Total | 87.8
| 12.2 | 18,167,000
| 2,524,000 | 20,691,000
|
68. The Government notes that the modelled bill (modelled
to meet the adequate standard of warmth used in fuel poverty estimation)
for homes without a mains gas connection is around £250 higher
annually than for those with a connection. DECC's memorandum points
out that, in addition to having to rely on more expensive fuels,
homes off the gas grid tend to be larger - and therefore more
expensive to heat - than those on it. This results in higher levels
of fuel poverty.[103]
69. DECC told us about a range of measures underway
designed to help households not connected to the gas grid, including:
- Almost 20,000 households could
be connected to the mains gas network due to new partnerships
between gas distribution networks and agencies that provide grants
for heating systems or for energy efficiency;
- The Renewable Heat Incentive (RHI) should provide
financial support to people that use heat from renewable sources.
Those switching from oil or LPG should benefit as tariff rates
have been calculated on the basis of switching from gas to renewable,
and oil and LPG tend to be more expensive than gas;
- The Feed-In tariff (FTI) should also support
investments in renewable electricity generation;
- The Government will consult on measures to help
low-income households take advantage of clean energy cash-back;
- DECC has funded NEA to study the role credit
unions could have in helping people budget and save for heating
oil; and
- Focusing social price support via a rebate on
electricity bills.[104]
70. The Government also told us that "Warm Front
is currently undertaking trials to assess the suitability of low
carbon heating technologies and solid wall treatments to determine
whether they are suitable, in terms of both carbon savings and
usability, for the vulnerable households the Scheme is aimed towards".[105]
Concerns were raised with us, however, about the adequacy of those
trials. Derek Lickorish of the Fuel Poverty Advisory Group told
us "I understand we have around 51 air source heat pumps
about to be trialled and this just is not enough".[106]
71. When asked about trials of novel technologies
to help solve the problems faced by people off the gas grid, the
Minister said that he was "very enthusiastic" about
such work but that, unfortunately, pilots carried out by Warm
Front of solar thermal installations "had not gone particularly
well in terms of delivering cost savings". For that reason,
he felt with regard to the 51 air source heat pumps being trialled
that "it is right to start small... and find out whether
it works or not. I would be absolutely enthusiastic about scaling
up a pilot quite quickly once I was sure that it was delivering
effective benefits to people".[107]
72. We are pleased to note the Minister's enthusiasm
for the potential for novel technologies to help alleviate fuel
poverty for people off the gas grid, but are disappointed about
how long it has taken to assess these technologies. It is clear
that work on this is at a very early stage and we urge the Department
to report back on the trials currently underway at the earliest
opportunity. Households off the gas grid pay more for their fuel
and are more likely to be in fuel poverty and the Government should
ensure that it takes effective steps to help them.
73. People off the gas grid buy their fuel in a market
which is largely unregulated. We raised with the Minister the
prospect of regulating these markets, but he was not convinced
of the case for doing so. He noted that, at a meeting with members
of the Bill Committee looking at the Energy Bill, representatives
of the Office of Fair Trading, the Competition Commission and
Consumer Focus concluded "that they did not think more regulation
was the solution".[108]
He understood that it might be possible to "reach some bigger
players" if the regulation was aimed at the major players
in the oil industry, rather than the myriad small-scale suppliers,
but he was "not convinced" that regulation would bring
benefits, "given the findings the Competition Commission...
reported last year after a five-year investigation, and the extra
costs we would put on an industry that feels under pressure".[109]
74. One modest but potentially helpful step the Government
could take for people who rely on filling expensive oil or gas
tanks concerns the timing of Winter Fuel Payments. We put it to
the Minister that there might be benefits to bringing forward
in the year the timing of payments to assist people who have to
fill such tanks, when they could do so at a cheaper cost than
in the middle of winter. He noted that it was the Treasury's responsibility
to determine the timing of such payments, but he did "think
there was something" in the argument for making the payments
earlier.[110]
75. We note the difficulties inherent in seeking
to regulate the market for fuels bought by people off the gas
grid. However, this group is disproportionately likely to be fuel
poor and we believe the Government must review urgently the case
for regulating this market. As a more modest step, we urge DECC
to discuss with HM Treasury the case for flexibility in the timing
of winter fuel payments, so that people off the gas grid have
the opportunity to maximise the fuel they are able to buy.
102 FP01, para 37 (DECC) Back
103
FP01, para 38 (DECC) Back
104
FP01, paras 39 to 45 (DECC) Back
105
FP01, para 40 (DECC) Back
106
Q73 (Fuel Poverty Advisory Group) Back
107
QQ162 and 163 (DECC) Back
108
Q160 (DECC) Back
109
Q161 (DECC) Back
110
Q162 (DECC) Back
|
