1Energy Action Fuel Poverty Conference – 6/7 February 2012

Affordable Energy Strategy

Dr Stjohn O’Connor

Energy Efficiency & Affordability DivisionDepartment of Communications, Energy and

Natural Resources, Ireland

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• Inter-departmental Group on Affordable Energy

• Appointed Indecon to assist in developing strategy

• Consultation with interested parties/government departments

• Published November 2011

• Rollout: 2012 onwards

Process

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Starting Point

Social tariffs

Energy prices Income level

Thermal Performance

Consumer ProtectionConsumer Protection

Income SupportsIncome

Supports

RetrofittingRetrofitting

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Focus on Energy Efficiency: co-benefits

Fewer energy subsidies

Reduced energy infrastructure costs

Reduced Emissions

Health Dividend

Local employment

Improved community appearance

Local spending

Higher property values

Social Dividend

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Findings: Extent of Energy Poverty: Expenditure Method

• While the expenditure share method is an arbitrary and, in many cases, unsatisfactory measure, it does give an indication of the level of household resources taken up in obtaining home heating and transport It also helps to give an indication of potential vulnerability, especially in the event of an energy price rise.

Energy Poverty in Ireland – Number of Households Experiencing Energy Poverty

Definition/Measure Energy Poor – All Households

No. of Households – 2009

% of All Households - 2009

Household Expenditure on Energy Greater than 10% of Household Disposable Income

316,712 20.5%

Households experiencing Severe Energy Poverty (expenditure greater than 15% of disposable income)

151,344 9.8%

Households experiencing Extreme Energy Poverty (expenditure greater than 20% of disposable income)

83,137 5.4%

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Findings: Extent of Energy Poverty: Subjective Method

Subjective Measures of Energy Poverty

Year Source Survey

A: Households reporting that they

cannot afford to heat their homes adequately

B: Households that had to go without heating in the past year due to lack

of money

Composite Indicator (A, B or both)

Share of Househol

ds (%)

Number of

Households

Share of Households

(%)

Number of Househol

ds

Share of Household

s (%)

Number of Household

s

2003 SILC 3.5 47,000 7.8 104,000 8.9 119,000

2004 SILC 3.7 51,000 5.7 79,000 6.9 95,000

2005 SILC 4.0 57,000 6.5 93,000 7.7 110,000

2006 SILC 4.6 68,000 6.6 97,000 8.1 119,000

2007 SILC 3.6 56,047 5.7 88,382 6.8 104,382

2008 SILC 4.2 67,139 6.7 105,483 8.0 127,984

Source: Indecon based on data provided by CSO

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Findings: Energy Poverty Rates by Income Group

100,

410

81,6

70

58,5

68

35,6

56

21,7

81

9,49

1

4,58

7

2,38

8

1,40

5

761

68.5%

55.7%

40.0%

24.3%

14.9%

6.5%3.1%

1.6% 1.0%

0.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0

20,000

40,000

60,000

80,000

100,000

120,000

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nos. of Households and Energy Poverty Rates by Income Decile

Estimated No. of Energy Poor Households in 2009

Energy Poverty Rate - Energy Poor as % of All Households in Income Decile

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94,647 9,488 56,409 63,543 3,396 6,675 9,009 4,923

49.1%

39.0%

29.6%

21.8%

15.3%

9.6% 9.2% 8.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Nos. of Households and Energy Poverty Rates by Household Composition

Estimated No. of Energy Poor Households in 2009

Energy Poverty Rate - Energy Poor as % of All Households by Composition

Findings: Energy Poverty Rates by Household Composition

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Findings: Energy Poverty Rates by Accommodation Type

171,019 139,751 2,065 334 1,086 739

24.3%

19.6%

14.7%

12.1%

9.5%

5.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Nos. of Households and Energy Poverty Rates by Accommodation Type

Estimated No. of Energy Poor Households in 2009

Energy Poverty Rate - Energy Poor as % of All Households by Accommodation Type

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• Low income, particularly where a household falls within the lowest income decile (where 68.5% of households are energy-poor) or where the head of household falls within the ‘working poor’ group (51.1%)

• Where a household is occupied by older people, and particularly if they are living alone (49.1%) or where the main breadwinner is widowed (50.5%)

• Households renting their homes from a local authority (39%)

• Households living in accommodation built prior to 1945

Findings: Key Risk Factors

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Implementation

• Starting point: Income supports, efficiency measures and customer protections

• Recognise the environment we operate in

• Focus on what we can achieve (lots)

• Requires a co-operative effort

• Innovate

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Income Supports

• Weekly Payments (unemployment assistance)

• Fuel allowance payments

• Household Benefits Package (Free electricity or gas units)

• Heating supplements under the SWA scheme (Assists people who have special heating needs e.g. disability, ill health or infirmity)

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Thermal Efficiency Measures

• Measures targeted at 3 areas:– Private housing– Social housing– Voluntary housing

• Important to understand the housing stock/skills that are in the market

• 2 million housing units– 1.6 million occupied and in private ownership– 130,000 social housing units– 25,000 voluntary housing units

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Domestic Efficiency Measures

• Three strands:– Private Housing; Social Housing and Voluntary Housing

• Private Housing (DCENR & SEAI)– Delivered by community-based organisations and private

contractors– 80,388 homes have been upgraded since 2001 to date under

the WHS

• Social Housing (DoEHLG)– Delivered by local authorities and private contractors– €47million spent on energy upgrades in 2009 and 2010

• Voluntary Housing – Covered by both DoEHLG and DCENR/SEAI

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Domestic Efficiency Measures

Other Initiatives– Central heating scheme for social housing– Housing adaptation grants for older people

and people with disabilities– 2010 building regulations– Better Energy: Homes– Energy saving targets for energy suppliers

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Irish Energy Prices

• Fully liberalised market

• All-island energy market

• High level of supplier switching amongst customers

• Customer charters for energy suppliers

• Disconnection policy

• Dedicated information portal (www.energycustomers.ie)

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Future Direction

• Early action essential• Implement strategy (48 actions), which means:

– 5 priority work packages– Area-based approach– Ensure greater access to energy efficiency

measures– Reform eligibility measures– Review the National Fuel Scheme and

Household Benefits Package

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Thank you

stjohn.oconnor@dcenr.gov.ie