fuel poverty. structure of the presentation background: what is fuel poverty? issues to consider...
TRANSCRIPT
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Fuel Poverty
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Structure of the Presentation
• Background: What is fuel poverty?
• Issues to consider when measuring fuel poverty.
• Ways to measure fuel poverty.
• Initial suggestions for the manual.
• An example of how we measure fuel poverty in England.
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What is Fuel Poverty?
• Fuel poverty is a broad relative concept concerningthe ability of households to afford customary levels of warmth.
• The phenomenon of FP was first identified in Britain in the 1970s.
• In the UK FP is not about absolute access to power, as it may be in developing countries.
• The current definition of fuel poverty in England is:
A household is defined as being in fuel poverty if it needs to spend more than 10% of its income to achieve an adequate level of warmth.
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Issues to Consider:
• Should fuel poverty just focus on fuel for heating or cover electricity
use as well – if so all or some?
• Should cooling be included (particularly in hot countries)?
• Household fuel only or fuel for transport?
• Are there specific issues for rural areas?
• What about large countries- particularly those with big variations in
temperature across the country.
• How to assess under- heating (or home too warm)
• Wide range of issues on income (after housing costs, equivalised
etc)
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How can you Measure Fuel Poverty?
There are various ways you could measure fuel poverty. These include:
1. An Expenditure Survey
2. Small Scale Survey (for example, small scale English Housing
Survey)
3. A Large Scale Household Survey (DECC’s approach)
4. Energy Consumption data
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Strengths and Weaknesses of Approaches
• Expenditure Survey:
- is likely to contain information on household income, expenditure on fuels, household type and some property information, BUT
- based on actual spend, not required spend (so won’t identify people under/over spending) and limited property/dwelling characteristics.
• Small Scale Survey:
- if setting up, can ensure collects required key information, cheaper than large scale survey, BUT
- may not be nationally representative, will have gaps, unlikley to capture income • Large Scale Household Survey:
- can tailor survey to collect the information required, such as detailed information on the dwelling type and household characteristics, BUT
- expensive, time lags in receiving information and more burdensome on participants.
• Energy Consumption data:
- potentially full coverage, or large scale coverage of the population; BUT,
- data not collected for this purpose and won’t be ‘cleaned’. Will only include what people are actually using, won’t identify where people are under/over heating their homes. Limited information on characteristics of the housing.
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Proposed initial suggestion
Could all countries measure on a simple basis?• For example:
- the average spending of the three lowest income deciles compared to a) the overall average b) the top income deciles.
Alternatively; • Average energy use by household types• Average energy use compared to modelled energy use, by
household type• Other common approaches?
• However, serious complications in comparison between countries
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How we Calculate Fuel Poverty in England
• The FP Ratio = Modelled Fuel Costs
• Modelled Fuel costs are calculated as: required energy consumption * energy price
• Based on modelled fuel costs, not actual fuel costs.
• The model uses a variety of characteristics from the English Housing Survey (EHS) to estimate fuel costs. These include: fuel mix, household composition, heating requirements, dwelling insulation and dwelling type and size.
• It produces an estimate for four key areas: space heating, water heating, lights and appliances and cooking.
Income
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Modelling FP in England (cont’d)
• The current measure does not include other fuel requirements, such as cooling (limited use in UK) or fuel for transport.
• Energy prices come from DECC’s survey of energy companies.
• The EHS collects data on household costs and household income, which also feeds into the measure.
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Strengths and Weaknesses of the Current Definition
Strengths
Needs-based Sensitive to three key drivers- Modelled assessment of fuel needs - Income- Doesn’t count being cold as success - Energy Efficiency
- Prices
Weaknesses
Fixed threshold Over-sensitive- No clear rationale - Is unduly dominated by prices- No longer current - Technical issues also have big
impact (e.g. low reported incomes and temperature standards)
RatioNumerator / denominator problem Unreliable
- Misreports trends- Distorts policy choices
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A Potential New Indicator: What does it cover?
Under this indicator, a fuel poor household is one that:- faces higher than typical costs; and- were it to spend that amount, would fall below the poverty line
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The Fuel Poverty Gap
-The number of households with low incomes and high costs (LIHC) represents the extent of fuel poverty
- The difference between the energy costs of a household and the energy costs needed to take it out of the LIHC quadrant is the fuel poverty gap. This represents the depth of fuel poverty
Fuel poverty
gap
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Comparison of the two indicators