Energy Justice – the policy challenges What is the policy context and the issues we are grappling with?

Overview Fuel Poverty policy framework Carbon reduction targets and policies Implications of policies on consumer bills Housing policy Social and Environmental Impact assessments

NEA – what is our role in this agenda? Mission – End to fuel poverty Strategic Objectives to facilitate access to, and understanding of energy efficiency and other solutions to fuel poverty; to influence decision makers and provide solutions to fuel poverty

The conflict

Fuel Poverty Legislative Context The Warm Homes and Energy Conservation Act 2000 The Warm Homes and Energy Conservation Act requires the Government to eradicate fuel poverty, as far as is reasonably practicable, by 2016. HECA (under review) Fuel Poverty reporting Regulated Consumer Protection under supplier licence conditions and incentives to stimulate innovation in tackling access to affordable energy The Government commissioned a review of the fuel poverty definition and fuel poverty targets with interim report available.

Mitigating policies –current and proposed Low household income - Winter Fuel Payment and Cold Weather Payment (Treasury funded) High energy costs - Warm Home Discount (Consumer –funded) Poor standards of heating and insulation - Warm Front, and Decent Homes (Treasury-funded) The Carbon Emissions Reduction Target and the Community Energy Saving Programme replaced by Green Deal and ECO

Fuel Poverty in England Number of fuel-poor households Year England 1996 5.1 million 2001 1.7 million 2003 1.2 million 2005 1.5 million 2007 2.8 million 2009 3.8 million 2011 5.1 million (?)

Carbon Reduction Target to reduce greenhouse gas emissions by at least 34% by 2020. Target to reduce greenhouse gas emissions by 50% by 2025. A legally binding target to reduce greenhouse gas emissions by at least 80% by 2050. Renewable Energy target 20% by 2020 EMR policy proposals

Implications for energy bills Charges to consumers 2009-2010 Charges to consumers 2012-2013 Renewables Obligation £12 EU Emissions Trading Scheme £24 Carbon Emissions Reduction Target £46 - Community Energy Saving Programme £3 Energy Company Obligation £80 Feed-in-Tariff £6.50 Carbon reduction policies £85 £122.50

How to reconcile tensions fairly The Green Deal Radical overhaul of housing stock Market-based energy efficiency programme Able-to-pay households Heating and insulation measures Finance up to £10,000 Must comply with the ‘Golden Rule’ Framed as a cost saving programme But…not appropriate for low-income households

Will this be enough? ECO Intended to support low-income households - funded through levy on domestic consumers - uncertain budget (between £1 billion and £2 billion per year) - split between carbon reduction and affordable warmth elements - will fund expensive measures for able-to pay households - intended to drive and develop solid wall insulation market - details will be subject of intense political discussion - annually - ECO should be devoted entirely to benefit of disadvantaged households

Fuel poverty in relation to energy efficiency standards Energy efficiency and fuel poverty % Households Number of Households SAP 2005 Fuel poor Not fuel poor % of fuel poor Below SAP 20 63.9% 36.1% 422,000 239,000 10.6% SAP 20-30 46.2% 53.8% 365,000 426,000 9.2% SAP 30-40 29.3% 70.7% 616,000 1,485,000 15.5% SAP 40-50 20.6% 79.4% 897,000 3,460,000 22.6% SAP 50-65 14.8% 85.2% 1,321,000 8,896,000 33.3% Above SAP 65 7.3% 92.7% 343,000 4,730,000 8.7% Total 18.4% 81.6% 3,964,000 17,571,000 100.0%

Social and Environment Impact assessments How impacts are measured Wider considerations Developing mitigating policies - governance Long-term targets and investment decisions/short term political decisions

Policy Impacts – getting it right?

Or getting it wrong

Questions Are we being honest enough about the tensions between achieving affordable energy and carbon reduction policies and are the tensions just about energy prices? Can and should we rely on a light regulatory approach to energy generation and supply to achieve our social and environmental goals? What are the least regressive policies to deliver carbon reduction and affordable warm and are they being embraced?