Households in the UK predominantly use electricity from the national grid as their main source of energy. Most households (approximately 23.7 million in Great Britain) use gas in their homes. Some households also use other fuels, such as heating oil and gas oil, for fuel-based generators and for heating as alternatives to on-grid options.^[1]  The need to switch to renewable energy sources for domestic energy supply is immediate and pressing (see our ‘resilient‘ well-being goal summary for further information).

There is a social gradient in fuel poverty: the lower your income the more likely you are to be at risk of fuel poverty and has a significant impact on the health, social and economic well-being of people living in cold homes. Those most vulnerable to fuel poverty and cold homes include older people, lone parents with dependent children, families who are unemployed or on low incomes, children and young people, disabled people, people with existing illnesses and long-term conditions, and single unemployed people.^[2] Respiratory diseases are worse for people living in cold homes, and other chronic health conditions are aggravated, alongside a greater risk of strokes and heart attacks (see our ‘healthier‘ well-being goal summary for further information).  Cold homes also have a negative impact on the emotional and mental well-being of all members of the household (including worrying about bills and health) and can have an effect on children’s performance at school.

Health and well-being inequalities caused by living in fuel poverty potentially lead to a greater reliance on public services for health and other well-being support. By reducing the risk of people living in fuel poverty in Wales we can help reduce the negative impact on people’s lives and the pressure on public services.

Welsh Government states that a household is to be regarded as living “in fuel poverty” if a member of a household is living on a “lower income” in a home which cannot be kept “warm” at “reasonable cost”. An estimated 144,504 households at risk of being in fuel poverty in Wales, spending between 8% and 10% of their household income on fuel costs. This is equivalent to 11% of households in Wales.^[3]

Notwithstanding some limitations to the latest data we have about fuel poverty at a local level, as at 2018, 12% of households in both Conwy and Denbighshire are considered to be in fuel poverty.^[4] The report also highlights that the modelling shows a wide range of estimated fuel poor at LSOA level. For example, the average level of fuel poverty in Conwy is close to the national average, but proportions of fuel poverty in its constituent LSOAs range from very low to very high values. This could be consistent with our findings on poverty and inequality across both counties.

Fuel poverty can be a particular problem in rural areas, which may not be attached to gas mains and may have to rely on solid fuel or gas/oil supplies which frequently costs more than electricity and gas and can only be bought in large quantities, resulting in sizeable upfront costs. add para from goal summary here and in that chapter

Older housing can also be more difficult to make energy efficient as it was constructed using building methods and materials which are not easily adaptable to 21st century standards for insulation or heating system installation. Stone built properties are a particular problem.

Up until 2020 gas prices were steadily decreasing, but have recently soared. The future of gas prices looks uncertain at this stage. Electricity prices have also steadily risen.

A report released by the Welsh Government in 2019 (Fuel poverty estimates for Wales 2018^[5]) stated:

• 155,000 households in Wales were living in fuel poverty, equivalent to 12% of households.
• 32,000 households were living in severe fuel poverty¹, equivalent to 2% of households.
• 130,000 vulnerable households in Wales were living in fuel poverty, equivalent to 11% of vulnerable households.
• 19,000 vulnerable households were living in severe fuel poverty, equivalent to 2% of vulnerable households.

Tackling fuel poverty is a key sustainable development priority for Welsh Government because it focuses on a key social issue by targeting those who are most in need; stimulates economic activity through generating opportunities for local businesses as well as employment and training opportunities; and makes homes more energy efficient and reduces greenhouse gas emissions and contributes to reducing Wales’ ecological footprint. By 2035, Welsh Government wants to see that:

• No households are estimated to be living in severe or persistent fuel poverty as far as reasonable practicable;
• Not more than 5% of households are estimated to be living in fuel poverty at any one time as far as reasonably practicable;
• The number of all households “at risk” of falling into fuel poverty will be more than halved based on the 2018 estimate^[6]

On April 1^st 2022, the energy price cap for standard variable tariffs increased by 54% from the previous price cap, due to a record increase in global gas prices, with wholesale prices quadrupling since 2021 (Ofgem, 2021). Further cost increases of 32% are predicted for October 2022.

Coupled with rising inflation, this presents significant challenges for communities in meeting their living costs and increases the risk of fuel poverty.

At COP26, a commitment was made to end the use of coal power and a transition to clean energy, moving away from fossil fuels and towards renewable energy sources. In light of the rising energy and living costs, this shift towards renewable and zero carbon energy supply is likely to accelerate, particularly in light of the forthcoming UK Energy Strategy.

Reducing reliance on fossil fuels and switching to renewable and low carbon energy solutions, will help to achieve the UK Government’s target to achieve net carbon zero by 2050, and simultaneously help reduce the risk of fuel poverty by providing communities with affordable low carbon energy supply.

[1] Department for Business, Energy and Industrial Strategy. (2021). Quarterly Energy Prices: September 2021. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1021927/Quarterly_Energy_Prices_September_2021.pdf

[2] Centre for Sustainable Energy (2013) Tackling Fuel Poverty

[3] Welsh Government. (2021). Tackling fuel poverty 2021 to 2035: A plan to support people struggling to meet the cost of their domestic energy needs. https://gov.wales/tackling-fuel-poverty-2021-2035-html

[4] Welsh Government. (2020). Welsh Housing Conditions Survey (WHCS) 2017-18: Local area Fuel Poverty estimates modelling and results summary. https://gov.wales/sites/default/files/statistics-and-research/2020-03/welsh-housing-conditions-survey-whcs-2017-18-local-area-fuel-poverty-estimates-modelling-and-results-summary-071.pdf

[5] Welsh Government. (2018). Fuel Poverty estimates for Wales 2018. https://gov.wales/fuel-poverty-estimates-wales-2018

[6] Welsh Government. (2021). Tackling fuel poverty 2021 to 2035: A plan to support people struggling to meet the cost of their domestic energy needs. https://gov.wales/tackling-fuel-poverty-2021-2035-html