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HPM October 2012

INDUSTRYWATCH WWW.HPMMAG.COM Got a story? Ring us on 01732 748041 or e-mail twood@unity-media.com Addressing fuel poverty in the UK In this month’s article, Mike Foster, chief executive of the Energy and Utilities Alliance, looks at the hidden problem of rural fuel poverty and the extra challenges it brings to policy makers... Inorth Herefordshire, where the unemployment over 75-year-olds are placed on the cheapestpaying more than they should for their fuel.Arguably, this is something that can be partlyaddressed by Ed Miliband’s policy of ensuring allt’s not often that you will see in a ranking ofpoverty by parliamentary constituency the worstoffender being, many peoples’ idea of rural idyll, rate is below average at 2.8% (August 2012) and energy tariff available. the best performer being in London’s Poplar and Limehouse, where unemployment is above SHORT-TERM QUICK WINS average at 10.1%. But that is the reality of the fuel In an era where public finances leave little room poverty statistics compiled by the Department of for manoeuvre, there are short-term quick wins Energy and Climate Change for 2010. available to tackle fuel poverty in rural (and North Herefordshire has 11,128 fuel poor urban) areas. Half a million households have a households, 30% of the constituency compared to gas supply in their home, but do not have gas Poplar and Limehouse with 3,441 households, or heating. Over a third of these are fuel poor. just seven per cent. Installing high efficiency gas central heating would be transformational and help alleviate the A SERIOUS NATIONAL PROBLEM problems highlighted by professor Hills. A further Fuel poverty is not limited to just rural areas, far 1.3 million homes are located in ‘gas postcodes’ from it, with 15 of the worst 25 outcomes being but do not have a gas supply. in the classic urban deprived constituencies. For many, with a relatively small outlay, it However, rural fuel poverty is an issue that The challenge of tackling fuel poverty (not just would be cost effective to connect to the gas provides extra challenges to policy makers. limited to rural areas) remains a formidable one network, and installing gas heating would make Professor John Hills’ final report of the Fuel sizeable inroads in tackling fuel poverty. I’ve seen Poverty Review, ‘Getting the measure of fuel The relative energy efficiency of dwellings is a first-hand this work in the East Midlands, carried poverty’ reminds policy makers that: “fuel poverty major determination of consumption levels. A out by Affordable Warmth Solutions, an arm of is not only distinct, but also a serious national third of rural homes are pre 1930’s properties National Grid. problem” with severe health and well-being with solid wall construction, making them Another simple, and cost-neutral way to help consequences (contributing to 27,000 excess relatively inefficient (35% of heat can be lost address fuel poverty which can bring added winter deaths each year but also to a much greater through uninsulated walls) and expensive to benefits to off-grid consumers, as suggested by number of ill-health incidents and their demand improve (up to £13,000 for a three-bedroomed Consumer Focus, is to bring forward the payment upon the NHS, as well as poor outcomes for semi) compared to cavity wall (£600) and loft of the Winter Fuel Allowance to the summer young people). insulation (£350). months. Potentially allowing for the purchase at Rather than face elimination by 2016, fuel lower summer prices of heating oil, and certainly poverty, claims Professor Hills, will still impact GEARED FOR URBAN AREAS allowing for central heating systems to be serviced upon an estimated nine million people, with the Existing schemes to improve energy efficiency in (at a quieter time for installers) improving energy fuel poverty gap increasing from £1.1 billion in the home, such as the Carbon Emissions efficiency and reducing consumption and cost. 2009 to £1.7 billion by 2016. Reduction Target and the Community Energy Figures from OFTEC suggest a typical rural Broadly speaking, fuel poverty is a consequence Saving Programme, tend to be geared towards household could have saved £170 if heating oil of low incomes, energy consumption levels and urban areas with easier identification of the was bought in June 2010 compared to January energy unit costs. Rural areas face added problem and at the same time offering greater 2011. Nearly doubling the value of the Winter disadvantages providing further challenges for economies of scale and hence lower costs. This Fuel Allowance. policy makers that governments, of whatever may still apply to new schemes such as ECO, the With fuel poverty set to worsen in the UK; with complexion, will need to address. Renewable Heat Incentive and the Green Deal. the scrapping of schemes that are tried and tested, The Energy and Climate Change Select The choice of energy is a major factor too. such as Warm Front, the challenge of tackling Committee heard evidence that rural fuel poverty Rural fuel poverty is a particular problem, if rural fuel poverty remains a formidable one. does not align itself with social poverty, as it does households are not connected to mains gas, they Professor Hills maintains that energy efficiency in urban areas, and that the relative isolation of will face higher unit energy costs. measures, both supplier and exchequer funded, properties and geographical sparsity prevent Evidence submitted by National Energy Action are the most cost-effective ways to address fuel identification of fuel poverty in rural areas. shows comparative cost for space and water poverty. I’ve said it before, tackling fuel poverty is Examining the income component of fuel heating, with natural gas £1,259 per annum being a social imperative that our sector should be poverty, the Select Committee heard evidence that substantially lower than oil (£1,649) and LPG concerned about. It doesn’t sit right having the benefit take up in rural areas is lower than in (£2,331). Electricity is the fuel of choice for 28% world’s seventh largest economy experiencing urban areas; median earning levels for those in of households in rural areas (annual space and 27,000 excess winter deaths each year. It is also in work is lower in rural areas and the age profile is water heating cost £1,314). our financial interest to do so as it will be our skewed with a larger proportion of retired people Electricity supplier switching rates are also said products that lead the way to improved efficiency on fixed incomes living in rural areas. These to be lower in rural areas; as a consequence many levels. That’s why campaigns to promote energy provide the backdrop for fuel poverty to prosper. rural households are on expensive tariffs and efficiency awareness should be supported. 12 OCTOBER 2012 HEATING & PLUMBING MONTHLY


HPM October 2012
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