National energy policy in the United Kingdom has made some notable progress in the past few decades. But it is still leaving many poor and vulnerable households behind. Yesterday Professor Benjamin Sovacool, Director of the Centre on Innovation and Energy Demand and Professor of Energy Policy at the University of Sussex, presented research to the Westminster Energy, Environment & Transport Forum conference, that suggests that adopting market approaches that expect people to pay for energy efficiency are unlikely to work. Sovacool identifies a previous government-run scheme, the “Warm Front” programme, as a more successful model for tackling the problem.
“There is an often expressed sentiment that the problem of fuel poverty—where household expenditures on energy and fuel become a financial burden—is inexorably daunting and difficult to address, that solutions are elusive,” Sovacool says. “But we forget that the UK actually had a working solution which operated for more than a decade: the Warm Front program. That scheme ‘failed’ only because it was underfunded and prematurely terminated.”
The Forum conference aimed to identify the next steps for the future direction of energy efficiency policy for households and identify options for the government, which is expected to announce a successor scheme to the Green Deal in the next few months.
The conference came a week after a National Audit Office report criticised the government’s Green Deal and Energy Company Obligation (ECO) energy efficiency scheme, saying that the scheme had not achieved value for money or generated additional energy savings because it did not successfully persuade householders that energy efficiency measures were worth paying for.
The Green Deal scheme involved the Department of Energy and Climate Change (DECC) and private companies providing money to the Green Deal Finance Company to create a market for energy efficiency loans. The commercial, low-interest, pay-as-you-save private loans allowed households to make their homes more energy efficient, paying back their loans through their reduced fuel bills. But there was little take-up by households and the scheme was closed in 2015 after only 15,000 homes had taken part. The scheme cost taxpayers £240 million, including grants to stimulate demand.
Sovacool suggests that Britain already had a more successful alternative that they scrapped before the Green Deal. Sovacool’s research, published in the December 2015 issue of the international peer-reviewed journal Energy, found that the scheme’s market approach to energy efficiency was ineffective for addressing the high levels of fuel poverty in the country. “Paying for energy efficiency and relying on market approaches,” Sovacool notes, “seems incommensurate with actually addressing fuel poverty.” This trend becomes even clearer when groups like National Energy Action quoted figures at the Westminster Forum suggesting that the NHS spends some £3.6 million per day addressing the health impacts of fuel poverty. “Clearly,” Sovacool adds, “the market is not adequately addressing this problem.”
Warm Front: successful at reducing fuel poverty
Despite the failures associated with the Green Deal, the government’s previous energy efficiency scheme, called Warm Front, which ran from 2000 to 2013, was found to have been generally successful at reducing fuel poverty in England.
The government-funded programme aimed to tackle fuel poverty and to reduce winter deaths by weatherising doors and windows, installing insulation and giving free energy audits on people’s homes. The scheme improved the energy efficiency of 2.3 million homes – 11 percent of all homes nationwide – saving households money on fuel bills and increasing income per customer by £1894.79 per household. The Warm Front scheme has also been credited with cutting greenhouse gas emissions per home by 1.5 tons per year, and it had high customer satisfaction rates.
Despite its successes, the government cut the Warm Front budget in 2010 and then replaced it with the Green Deal in 2013. This meant energy companies were left to tackle the problem of rising fuel poverty, rather than the government.
Fuel poverty is on the rise and as urgent an issue as Climate Change
It has long been known that more people die in winter than in summer. Living in cold, draughty houses exacerbates circulatory and respiratory diseases, increases the risk of falls, mental health illness and likelihood of hospital admissions. Last year, according to The Office for National Statistics, England and Wales experienced the highest number of ‘excess winter deaths’ in fifteen years, with 43,900 dying. ‘Excess winter deaths’ refer to the extra deaths that occur in the four winter months compared to the preceding and succeeding four months. 43,900 people died in the winter months in 2014 – 2015 – 27% more than during the non-winter months.
Households living in fuel poverty spend more than 10 or 15 percent of their monthly income paying for energy services. The research cites a World Health Organisation (WHO) study, which projected that there were 278,409 ‘average excess winter deaths’ in a dozen countries in 2008. This number exceeds the number of people who died from the effects of climate change in the same year. Numbers such as these make fuel poverty “as urgent a health issue as climate change”.
The research also reveals that the national rates of fuel poverty have been increasing. The percentage of English households living in fuel poverty has tripled since 2004, to the point where one in five households are fuel poor. This number could rise even further in 2016 to almost half of UK households—a pertinent reminder that for all too many British residents, warm, comfortable homes necessary for their physical health and mental wellbeing remain something to be wished for.