MAGNUS DAVIDSON: Living in fuel poverty while surrounded by a wind of plenty
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I now live in fuel poverty. Something that feels a bit strange to write down for many reasons, not least because it has been a focus of some of my research at the University of the Highlands and Islands over the last two years.
April’s price cap rise tipped my household over the edge, October’s price cap is going to launch us over well and truly.
The April price cap change saw an increase in energy bills for the typical home of £693, from £1277 to £1971 per year. As I heat my home directly with electricity, my annual increase of £914, from £2564 to £3478, is greater than the typical UK home which uses gas for heating.
I pay roughly five times as much per unit of heat I put into my home compared to someone using gas. Like many others in fuel poverty, we mask the real extent by rationing heat, that is not heating the house to an adequate standard as set out by the Scottish Government.
A new act from the Scottish Parliament in 2019 changed the way fuel poverty is defined. That definition is roughly, that after housing costs have been deducted, more than 10 per cent of net income is used to pay for fuel costs, and that after certain further adjustments are made, that remaining income is insufficient to maintain at least 90 per cent of UK Minimum Income Standard.
It is not the easiest to understand or to calculate, but try to give it a go – I would bet there are many people living in fuel poverty now who are not currently aware that they do.
The price cap is in place to protect consumers from short-term changes in prices of energy. The price of gas has increased post-Covid as demand has risen, while the war in Ukraine has also threatened supplies from Russia, driving up costs.
The UK burns a lot of gas for heating homes and electricity generation, and this has driven the increase in consumer energy bills. SSE, one of the companies that burns gas for electricity, announced profits of £1.5 billion last year, up 15 per cent, leading to calls for a windfall tax, and suggesting the price cap rise is also paying for greater profits for energy companies.
Figures from 2019 show that in Highland one-third of all households live in fuel poverty – in comparison the Scottish average is around one-quarter. In 2019, Highland generated four times as much electricity as it consumed, all from renewable sources, and that number increased to five-and-a-half times in 2020.
Six out of seven local authorities significantly above the national fuel poverty average are found in the Highlands and Islands. In 2019, the Highlands and Islands generated three times as much electricity from renewables as the region consumed, in 2020 that number increased to four times as much.
I authored a report last year for the Caithness and North Sutherland Regeneration Partnership which found that in the Dounreay Travel to Work Area, generation from large onshore wind farms and the MeyGen tidal turbines in the Inner Sound, generated 1242 per cent of annual electricity consumption.
The far north is a huge exporter of renewable electricity, before we consider the ever-increasing amount of offshore wind being built around our coasts. The area boasts fuel poverty numbers well above the national average, with action groups across Caithness and Sutherland reporting some incredibly difficult circumstances.
This situation is hugely inequitable, but the drivers and solutions are incredibly complex. The governments in Edinburgh and London have different levers to pull to fix the issue, but much of the time appear to pass the respective blame to each other.
We desperately need them both to do better.
We need new community benefit models which price electricity fairly for energy rich but fuel poor communities like our own, dealing with fuel poverty to meet the Scottish Government's target of no more than five per cent of households by 2040. The price of electricity is just one factor, we need better housing, more insulation, better heating systems, and importantly, better wages.
People should not use this issue as a reason to attack renewable generation whilst the planet’s climate changes, this is a societal issue needing fixed by governments to deliver a just transition. It is a very good thing that we produce this much renewable electricity, we need to produce much more, and we have an obligation to our friends and family in the south to do so. We just want a fairer deal.
- Magnus Davidson is a researcher based in Thurso.
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