The ability to access and use energy – to be able to stay warm, clean and heat food – is essential for a basic standard of living, yet a significant proportion of society are still considered to be fuel poor.
Many people in the UK struggle to get access to the cheapest energy, afford the most efficient technology or know the best way to use the energy they buy.
The annual fuel poverty figures released this week by BEIS are moving in the right direction. They show a general improvement in the headline figures, with a reduction of 18,000 households living in fuel poverty.
However, they also highlight that we still have some way to go, as the improvements are mainly due to fuel prices (the prepayment meter price cap has contributed to reduction of energy prices mainly for low income households) and rising incomes for poorer households due to the introduction of the National Living Wage.
There are major gains to be made for these households as the energy system changes due to the three Ds – decarbonisation, digitalisation and decentralisation. As Ofgem has pointed out in this week’s consultation on its consumer vulnerability strategy for 2025, it is often felt that innovation will likely not benefit the most vulnerable.
But we truly believe that, as Ofgem said in their consultation, ‘positive innovation for consumers in vulnerable situations is possible’.
There are many examples where innovation could be used to create positive impact for consumers. For instance, finding these fuel poor households is something many in the industry struggle with.
Innovative products and services could look at what data could be used, shared and acted upon to understand the quickest, cheapest and most appropriate ways to identify these consumers and support them. Designing and testing means of identifying the households experiencing these issues could be a significant way forward.
Efforts could also be made to make better use of new and existing data to be proactive in supporting vulnerable customers, whether that be to understand if and when people are self-disconnecting, when people are living in dangerously cold homes, or when vulnerable households may not have access to energy because of maintenance or power cuts.
To tackle this problem more effectively and harness these opportunities, we need to develop our understanding of it. 1.7% of public and private sector spending goes on research and development – yet none of the public funding spent on fuel poverty is currently allocated to this.
There is great space for innovation on heating to provide healthier homes. With excess cold in UK homes estimated to cost £848 million per year to the NHS1, Energy Systems Catapult will soon be looking at how innovation could provide warmer homes for those struggling with health issues.
In work that will involve real households in fuel poverty, we will design and test how energy innovation could help these consumers with new ways of engaging with energy – such as buying it as a service instead of in kilowatt hours as is being trialed in our Living Lab.
This pioneering work forms part of the Catapult’s commitment to ensuring nobody is left behind from the transition to a low carbon energy system.