Energy bills can come as a shock to us all. But even if fuel prices are expensive round the board, do they affect single pensioners living in old, countryside houses or students living in 5-bedroom flats disportionately? And what does British government do to deal with fuel poverty in the United Kingdom?
According to the UK government’s definition, a household is in fuel poverty if:
- Its income is below the poverty line (taking into account energy costs) and;
- Its energy costs are higher than is typical for their household type
In England, an estimated 2.55 million households were affected by fuel poverty in 2016 (Action for Warm Homes). Although the situation has marginally improved since 2012, the government has failed its legal obligation to eradicate fuel poverty by 2016, as was the target set in 2000. Fuel poverty related benefits have been implemented, yet thousands of low-income people living in energy inefficient houses still struggle to heat their home sufficiently. This leads to preventable health problem, which then taxes on NHS. In fact, 9000 people died due to cold housing in England and Wales in the winter of 2014-15 (BBC, 2016).
What causes fuel poverty?
There are three main causes for fuel poverty:
1. Low income: poorer households are more vulnerable than affluent households. They have to spend higher proportion of earnings for energy.
2. Rising fuel prices: fuel price has been increasing in the past 3 years (Ofgem, 2019). This was the main reason why fuel poverty rate increased despite the government’s commitment to eradicate fuel poverty.
3. Energy inefficiency: less energy efficient houses require more energy to heat their rooms. Thus, energy bill will be more expensive. The increasing fuel price makes a big gap between cost of energy for an efficient home and an inefficient home. This means that poor people living an energy inefficient house is likely to suffer from severer fuel poverty.
What can be done to reduce the number of fuel poor household?
The government has provided financial aid via ‘Winter Fuel Payment’ for those who cannot heat their home sufficiently. However, this does not reduce the number of people suffering from fuel poverty. Brenda Boardman, one of the most experienced British expert on housing energy efficiency, stresses the importance of improving energy efficiency as an ultimate solution to eradicate fuel poverty. The government has provided funds to refurbish old energy inefficient houses via ‘Warm Front’ and other energy efficiency related programs. However, those policies have not resulted in any prominent improvement. One of the main reasons for this failure is, according to Boardman, a mismatch between eligible households and those actually suffering from fuel poverty. Only 20% of fuel related benefits have got to the fuel poor. Furthermore, the rise in continual fuel prices undermines the impact of efficiency improvement. Empirical evidence showed that fuel poor households that had been refurbished were still required to pay almost same amount in fuel bills (Atkinson et al., 2017). Therefore, energy bills need to be cheaper to save fuel poor households.
Solar Thermal Collector is a renewable solution which can lower the cost of heat. It may be a desirable solution for remote areas where there is no gas connection: fuel prices in off-gas areas are generally higher since residents rely on expensive and carbon-intensive oil or electricity to heat their homes. Money remains to be a problem for Solar Thermal Collector. It is impossible for low income households investment initially. The solution needs to be subsidized to make it accessible for people who need it the most.
Low housing energy efficiency and relatively expensive fuel make fuel poor live in cold houses, costing the lives of thousands of people every winter. The government is failing to eradicate this inequality with insufficient and ineffective policies. Both energy inefficiency and rising fuel price have to be addressed to solve fuel poverty. As long as fuel price surges, fuel poverty will never be eradicated.
Action for Warm Homes (2018). Fuel Poverty Statistics. Available at
https://www.nea.org.uk/about-nea/fuel-poverty-statistics/ [Accessed 12 Mar. 2019].
Atkinson, J., Littlewood, J., Karani, G. and Geens, A. (2017). Relieving fuel poverty in Wales with external wall insulation. Proceedings of the Institution of Civil Engineers – Engineering Sustainability, 170(2), pp.93-101.
BBC (2016). Cold homes caused 9,000 deaths last winter, study suggests. [online] Available at: https://www.bbc.co.uk/news/uk-35862763 [Accessed 6 Mar. 2019].
Boardman, B. (2010). Fixing Fuel Poverty: Challenges and Solutions. London: Earthscan
Ofgem (2019). All wholesale gas charts and indicators. Available at
https://www.ofgem.gov.uk/data-portal/all-charts/policy-area/gas-wholesale-markets [Accessed 12 Mar. 2019].