With energy prices rising for the second time this year, Max Halliwell, Product Manager at Mitsubishi Electric, explores the impact this is likely to have on fuel poverty and looks at what can be done to help.
As we move from a scorching summer towards the cold of winter, the price of energy is in the news again as Ofgem, the industry regulator raised the cap on prices for the second time this year to cover higher wholesale costs that the energy suppliers are facing.
Scottish Power announced an increase of 3.7% or an average of £46 a year for just under a million customers and this news follows similar rises from British Gas with both companies blaming the continuing increases in the price of wholesale energy in the market.
The Telegraph also reported that the price of gas is likely to soar to a near 50% price increase from this time last year and The Guardian predicted that UK households will be paying around £60 more when all the energy suppliers pass on the higher cost to consumers.
Eating or heating
Whilst no-one likes to pay more and £46-£60 a year doesn’t sound much, to those living in or near poverty, any increase may be the final straw leading to more households ending up in fuel poverty with many more now facing the stark choice of ‘eating or heating.’
The Joseph Rowntree Foundation estimates that around 14 million people in the UK face a daily struggle to make ends meet and this number in poverty is only expected to grow, so any increase in fuel prices will have a major impact on these people.
The rises could also put more lives at risk with around 20,000 people already dying from cold every winter.
And this is before any Brexit impact on overall prices that may or may not arise after the end of March next year, when we either leave Europe without a deal or start the process of negotiating a new one.
So what can be done?
Through Ofgem, the government has been seeking to get the energy suppliers to reduce tariffs to help. This saw the introduction of the cap last year for customers on pre-payment meters or on the poor value standard variable tariffs.
However, a rise is a rise and if you are already on the breadline, you need practical help to get you through the winter safely and this is where many social housing providers have turned to renewable heating to help their tenants reduce their monthly running costs.
Over the past decades we’ve worked with hundreds of housing associations to install renewable heat pumps into thousands of tenants’ homes and this has had an immediate impact with benefits extending way beyond reduced fuel bills.
Firstly, whilst the lower costs help tenants on the poverty line, the fact that the system works best when left running all the time means that tenants also have warmth throughout their home and not just the one or two rooms that they could previously only afford to heat.
Secondly, this more even heating throughout the entire property during the coldest months helps protect the fabric of the structure helping reduce damp and mould and therefore reducing maintenance costs for the social housing provider.
Savvy housing associations are also reaping the benefits of the Renewable Heating Incentive and using the seven years of quarterly payments to help pay for new renewable heating systems such as an Ecodan Air source heat pump while also improving the thermal properties of the housing stock.
The other factor that needs to be born in mind is the fuel security of the country.
We are currently predicted to need to import around three quarters of our gas requirements by 2030 so a move to electric heating in the form of heat pumps is not only sustainable in terms of the environment, but also sustainable in terms of fuel supply.
Some are advocating fracking in the UK but – even ignoring the technological challenges of this controversial method of fuel supply, whilst this may help balance our over reliance on imports of gas, I don’t believe this is the answer to our future heating needs.
Instead, we have to look more at utilising the growing clean grid and using electric to deliver controllable, comfort at the lowest cost – ideally using air source heat pumps, which harvest ‘free’ renewable heat from the outdoor air.
The government has already signalled the end of oil and gas heating in the UK and pointed to sales of one million heat pumps a year by 2030, so the writing is on the wall already for high-carbon heating.
As we get towards more and more of our electricity supply coming from renewable sources, this makes the case for electric heat pumps which will upgrade the energy they use even further stronger still.
To hear more on this topic, join Max at UK Construction Week’s REA Theatre on Thursday 11 October for his talk, There’s still more to do to combat fuel poverty in the UK.
Prior to joining Mitsubishi, Max spent many years at the Building Research Establishment (BRE), working on a variety of sustainability initiatives. Max is now Business Development Manager for Mitsubishi Electric Heating Systems, promoting advanced air source heat pumps as the UK’s answer to mass-market, low carbon heating. The company has campaigned hard to gain recognition for air source heat pumps and Max has been instrumental in pushing forward changes to SAP Appendix Q.