Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

UK faces billion-pound funding gap as fuel poverty work stalls

EUA trade body argues that new findings show government commitments to improve energy efficiency of domestic heating have stalled, raising important questions around low carbon funding

Government efforts to improve energy efficiency in fuel poor homes are falling short of official targets and wider low carbon ambitions set out in the UK Clean Growth Strategy, a new report from the Committee on Fuel Poverty has found.

The conclusions were made in the latest annual report by the committee, which was established by the Department for Business, Energy and Industrial Strategy (BEIS) to monitor government progress on trying to curb costly and inefficient heating in the UK.

Progress in trying to curb the number of UK fuel poor homes - defined as properties where 10 per cent of annual income is spent on powering heating systems - was viewed by the committee as “stalling”.

Key recommendations form the report include urging the Treasury to assign £1 billion in funds to support a new Clean Growth Challenge fund that can run between 2019 and 2021 to ensure more energy efficient homes.

The findings serve to highlight the importance of ensuring sufficient funding approaches are in place to try and realise more innovative heating approaches both through gas and electricity solutions.

The committee’s annual report stated, “BEIS forecast progress on upgrading the energy efficiency levels of fuel poor homes is two per cent to six per cent lower than previously forecast. We estimate that the funding needed to complete the strategy has therefore grown from £15.4 billion in our 2017 Annual Report to £17.1 billion.”

Trade association the Energy and Utilities Alliance (EUA) said the conclusions of the report highlighted that government was failing to listen to advice on curbing the number of fuel poor homes and the level of support to support more efficient heating.

The organisation said improved and targeted funding needed to be introduced to ensure homes that are most susceptible to fuel poverty can adopt more cost and energy efficient systems.

Efforts to realise upcoming fuel poverty targets for 2025 and 2030 now faced significant spending gaps, according to the EUA.

EUA chief executive Mike Foster welcomed the publication of the committee’s latest report that included recommendations recognising a role for Gas Distribution Networks that can connect more low-income homes to the grid.

He said, “The Committee on Fuel Poverty report makes a number of recommendations of which we endorse, such as government funded household energy efficiency schemes, enforcement of health, wellbeing and safety-related regulations in the privately rented sector, and funding for a new ‘Clean Growth Challenge Fund’ for 2019-2021.”

Funding concerns

Mr Foster’s comments coincided with a special event considering the role of gas in meeting UK heating and transportation needs over the next 50 years, as well as the emerging challenges and limitations in trying to meet national targets for drastically curbing carbon emissions.

Figures from across the heating industry gathered at the event in Leicester and warned that the issue of new funding mechanisms will be central to meet government aims of transforming existing heating infrastructure towards lower carbon approaches.

This low carbon approach is expected to require a combination of gas and electric approaches, as well as looking at alternative off-grid approaches to fuel, delegates at the event said.

Geoff Randall, deputy director of gas network price controls with Ofgem, said that decarbonisation of heating posed a massive challenge for UK industry and government, yet there was significant potential to realise this through looking at a switch towards hydrogen and other alternative gasses.

He said, “We do think however that the path is quite uncertain, particularly until the mid-2020s when the government will have to make a decision on the future of heat and what that then means for gas policy.”

Mr Randall also considered the current implications of funding mechanisms such as the RIIO price controls initiative that was launched in 2013 and includes requirements that organisations managing gas and electric transmissions invest in safe, reliable and lower carbon solutions.

A consultation was now underway on a second iteration of these price controls that will consider a possible extension of innovation funding that can try and better address consumer vulnerabilities to inefficient heating.

Chris Clarke, director of energy strategy for Wales and West Utilities, told delegates during the event said he would encourage Ofgem in its role as gas and electricity regulator to maximise future innovation funding where possible into the grid to support low carbon innovation and curbing costs.

He said, “The risk is, if we don’t invest in gas network innovation, gas quality specifications and getting green gases onto the network as much as we can, then the burden will fall to the electricity networks and the electricity customer.”

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.