Will low carbon innovation bring energy justice or further fuel poverty?


By Dr Rose Chard, Fair Future Programme Lead

Dr Rose Chard is Fair Future Programme Lead at Energy Systems Catapult. Along with Consumer Insight business lead Dr Matt Lipson and Sussex University Professor of Energy Policy Benjamin Sovacool, they published a peer-reviewed study in Energy Policy journal: Temporality, vulnerability, and energy justice in household low carbon innovations.

How do we convince over 22 million households to swap their gas boilers to something greener, without making life worse for the 2.5 million who struggle to afford to warm their homes today?

These two huge societal problems – reducing carbon emissions and tackling fuel poverty – are not irreconcilable. In fact, innovations aimed at speeding up decarbonisation could help reduce fuel poverty.

However, there are also risks. Such a monumental transformation could change the way that people use and buy energy, restricting their options, if it unfolds without regard to the consumer. This would inevitably raise questions around the impact this could have on people’s lives, particularly those from vulnerable groups.

For instance, it is increasingly clear that smart home technology, and the ensuing data which provides insights into people’s homes and lifestyles, will be key to reducing carbon emissions in the energy system.

But what if you’re one of the 9% of UK citizens that has never used the internet? Could a sudden emphasis on smart tech lead to these people getting left behind, and suffering as a result? There are rewards to be reaped from the decarbonisation challenge, but only if we pre-empt these problems and act to mitigate them.

If we do this in the right way, many people could stand to benefit from decarbonisation. By finding a path that goes with grain of human nature, rather than trying to change it. We could design decarbonisation in a way that takes account of the fact that people want to lead different lives because they have different preferences. For instance, recent trials by Energy Systems Catapult have been looking at how we can sell people ‘heat as a service’ instead of kilowatt hours (kWh), which most people don’t really understand.

By collecting data about people’s homes and lifestyles (in our Living Lab of 100 real world homes), to understand how they like to use energy, innovators are able to offer households the chance to choose how much to spend getting the comfort they want.

For example, if Mrs Bloggs wanted her living room and bedroom to be 22°C between 5pm and 9pm on weekdays, we could give her a price for that exact outcome that will not change (even if it’s freezing cold outside). Under this ‘heat plan’, the energy provider becomes responsible for making sure their customers get the comfort they actually want for a fixed price. Consumers find this a lot simpler than trying to control the number of kwh they use to get comfortable.

With around two-thirds of UK households plagued by drafts, damp, mould or overheating (even in winter), energy services may hold the key to driving vast innovation in the energy sector. Crucially, if customers are buying guarantees of comfort instead of units of energy, it could make the task of replacing people’s gas central heating with low carbon alternatives much more palatable. That’s because consumers care more about their experiences than how they’re delivered. As long as they can get the outcomes they want, like comfort, they don’t really care whether it comes from a gas boiler, or low carbon alternative. After all, if you enjoy a nice meal, you don’t ask what oven it was cooked in.

However, whilst innovations like this could be a key tool in solving the challenge of decarbonising residential heating, which is responsible for around 20% of the UK’s total carbon emissions, it is important that we pause to think about the wider implications for everyone.

To coincide with this ‘heat as a service’ trial and in collaboration with academics at the University of Sussex, we have been exploring how low carbon innovations could complement, or possibly complicate people’s lives, particularly those from vulnerable groups.

The study offers a sobering reminder that many of the things we need to tackle climate change, such as greener vehicles or more efficient homes, can still generate degrees of injustice as they become accepted as a societal norm.

For the study, we assessed four household innovations – energy services, electric vehicles, solar PV panels and low carbon heating. For each innovation we looked carefully at four areas: affordability, resource efficiency and environmental performance, equity of accessibility and fairness for vulnerable groups.

As one might expect, we found a mix of positive and negative impacts. For example, tailored energy services could improve comfort, enhance control of costs and raise product performance for consumers, which could also enable service providers to attract and retain their consumers more easily.

Conversely, we found energy services could cause problems for households if they are rolled out without considering the needs of everyone, for instance homes without the internet, or renters who might be unable to install the necessary technology.

However, with some careful consideration and planning, energy services could offer policymakers new routes to deliver important societal goals like addressing vulnerability to fuel poverty. For instance, data could provide much more exact targeting of government support, such as improving the affordability of specific levels of energy service, rather than based on simpler measures such as monitoring the number of homes being insulated.

Energy service providers would also have a commercial incentive for delivering energy services as efficiently as possible, encouraging them to find the best mixture of fabric and appliance efficiency in each home.

If opportunities are harnessed, energy innovation could mean more people are able to afford access to basic energy services, and vulnerable people’s lives could be enriched by it.

Ultimately, we must accept that the rapid rollout of low carbon technology that will be necessary to meet national carbon targets could risk pushing people into new forms of fuel poverty if done irresponsibly. However, if carefully considered, decarbonising our energy system has the potential to alleviate the impact of many of the problems fuel poverty causes for people today.

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Harnessing innovation to better understand and reduce vulnerability to fuel poverty by designing smarter and more effective policies, products, services and consumer protections.

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