1. Introduction and background

This document sets out Arun District Council’s strategy in relation to both energy efficiency and fuel poverty for the period 2020-2025.

The strategy sets out the overall task that is currently being faced, beginning with a brief overview why energy efficiency and fuel poverty have become such important issues in modern times and how the Arun district compares to the rest of the UK. The strategy highlights the key areas of work where the Council is targeting energy efficiency and fuel poverty and future opportunities. The strategy elaborates on the Council’s HECA report and includes a detailed, annually updated action plan of activities and campaigns.

1.1 Energy Efficiency

Energy is a fundamental part of our way of life; powering appliances, heating homes and running industry. Energy is not a luxury; it is essential to society and the UK economy. In challenging economic times, it is even more important that energy remains affordable to all, while also making sure environmental pollution and climate change are addressed to reduce the harmful emissions that are affecting our local environment and the whole planet.

The UK has the oldest housing stock of the EU Member States, with nearly 38% of its homes dating from before 1946⁶. The England Housing Survey and a Eurofound study both suggest that the greatest housing risk to people’s health in the UK is from excess cold⁷.

Energy use in domestic properties accounts for a large and increasing proportion of national energy consumption. In 1970 it accounted for 24-27% but has increased to 28-31% of UK energy consumption7. This increase can be attributed to an increase in the number of installed central heating systems and technological improvements. Improving energy efficiency of buildings will help to control this increase in energy use.

Generally, the existing housing stock in the UK has poor energy efficiency and most of these properties will still be in use for the next 50 years. It is therefore crucial that the energy efficiency and carbon emissions of these buildings, is tackled if the UK is to meet and sustain its carbon reduction and fuel poverty targets.

Energy efficiency is a measure of energy used for delivering a given service so improving energy efficiency is simply a means of getting more from the energy that we use. There are several different ways to improve energy efficiency, such as:

• Innovation which can lead to the equal or greater output with less energy
• Reducing wasted energy while maintaining output
• Modern technologies such as heat pumps, which require less energy to provide greater heating output than other heating technologies.

Energy efficiency is not just for environmental and health purposes. Finding ways to do the same, or more, with less makes economic sense too; it can help households and businesses reduce their energy bills at a time of increasing energy prices.

Lower domestic energy bills can lead to higher disposable incomes which can be spent elsewhere in the economy. Simple changes in energy use behaviour can deliver some of these benefits with little up-front cost. In addition, longer term investment in energy efficiency technology can help innovation and lead to cost reductions which can make it cheaper and easier to invest in energy efficiency in the future.

When approaching energy efficiency, the basic principles of the energy hierarchy should be applied when deciding on priorities; seeking first to reduce energy use before meeting the remaining demand by the cleanest means possible. By prioritising demand-side activities to reduce wastage and improve efficiency, the hierarchy offers an easy to use approach to many different sectors of energy management.

 

Energy Generation: Renewable & sustainable energy

Energy efficiency: Improve the efficiency of buildings and products

Energy conservation:Reduce or eliminate unnecessary energy use

Figure 1. The Energy Hierarchy (prioritise from the bottom first)

1.2 Fuel poverty

Everyone should be protected against the cold in their home

Chris Skidmore MP

(Interim Minister of State for Energy and Clean Growth)

A household is said to be in fuel poverty when its members cannot afford to keep adequately warm at a reasonable cost, given their income.

Fuel poverty is caused by low incomes, high energy prices and energy inefficient housing.

Fuel poverty in England is measured using the Low Income High Costs (LIHC) indicator. Under the LIHC indicator, a household is considered to be fuel poor if:

• their necessary fuel costs are above average (the national median level)
• were they to spend that amount, they would be left with a residual income below the official poverty line.

There are three important factors in determining whether a household is fuel poor:

• household Income
• household energy requirements
• fuel prices

The Department of Business, Energy and Industrial Strategy (BEIS) estimates that, using the new Low Income High Cost definition, fuel poverty affects 2.53 million households in England (2017).

Fuel poverty is a widely recognised issue in the UK and is closely linked to several health and housing problems. Tackling fuel poverty is generally about helping people on low incomes who cannot keep their homes warm at reasonable cost. However, it is important to recognise that fuel poverty is an issue which is distinct from more general poverty and the Government have clarified that it should not be considered that all low-income households are living in fuel poverty. There is a growing body of evidence that certain vulnerable groups, such as households with older people and children, are at the most at risk of health problems associated with cold homes, such as respiratory and cardiovascular illnesses.

There are many other negative effects on wellbeing of people of all ages as a result of living at risk of or in fuel poverty, both direct and indirect. These include social isolation, mental health problems and, for children, underachievement in school.

Regardless of the size of home, increased energy efficiency cuts the cost of heating, making a warm home affordable and reducing the negative effect of increases in fuel costs. In fact, improving the energy efficiency of the home is often the most cost-effective way of making a sustained reduction in household heating costs and removing that household from fuel poverty.

Energy efficiency, household characteristics and composition and fuel poverty are intrinsically linked. This has recently been highlighted in the Fuel Poverty Strategy and related Statistics Report 2019 where it states

Households with insulated cavity walls are least likely to be in fuel poverty (7.5 % of households with an average fuel poverty gap of £237) compared to households with uninsulated solid walls (16.8% and an average gap of £420). The fuel poverty gap is the reduction in required spending which would take a household out of fuel poverty.

Older dwellings tend to have a higher proportion of households in fuel poverty compared to newer dwellings. Households in dwellings built between 1900-1918 were most likely to be fuel poor (18.6%) with an average gap of £377. This is compared to just 4.1% of fuel poor households in dwellings built post 1990 with an average fuel poverty gap of £207.

The level of fuel poverty is highest in the private rented sector (19.4%) compared to those in owner occupied properties (8.0%). Those in the private rented sector also tend to be deeper in fuel poverty, with an average fuel poverty gap of £336, compared to £214 for those in local authority and housing association properties.

When considering household composition, couples with dependant child(ren) have an average fuel poverty gap of £380 compared to a single person under 60 (£274). However, the highest prevalence of fuel poverty is seen for lone parents with dependent child(ren) (25.4%)⁸.

⁶https://www.bre.co.uk/filelibrary/Briefing%20papers/92993_BRE_Poor-Housing_in_-Europe.pdf

⁷https://www.bre.co.uk/filelibrary/pdf/rpts/Fact_File_2008.pdf

⁸https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/719106/Fuel_Poverty_Statistics_Report_2019.pdf