Does renewable energy cause fuel poverty?

There has been a great deal in the news over the past 12 months over how renewable energy subsidies are increasing the prices of energy, and how they are increasing fuel poverty. But how true is this? What real effect does renewable energy have on bills?

It is true that bills are increasing, and that this is having an impact on fuel poverty levels. A detailed breakdown of cost increases is given in the report “Household energy bills – impacts of meeting carbon budgets” by the UK Government’s Committee on Climate Change, the bill increases were split up as follows (excluding profit margins) from 2004 to 2010 for an average dual fuel bill (electricity and gas) [1].

energy price increases in the UK - keyenergy price increases in the UK - wholesale gas = 64%, transmission & distribution = 15%,  VAT = 4%,  renewable energy = 7%, energy efficiency = 10%

Figure 1: UK dual fuel price increases 2004-2010 – notice the wholesale costs of fossil fuels dominate the price rises [1]

So, we now know the different factors that caused the bill increases. But, excluding profit, how are electricity and gas bills split up? Currently,  bills are set out as follows:

Electricity Gas
Wholesale Fossil Fuel Costs
59% 65%
Transmission, distribution and metering 22% 26%
Renewables/energy efficiency/carbon price 14% 4%
VAT 5% 5%
Table 2: Fuel cost makeup in the UK [1]

It is important to stress that money funding low carbon measures, such as Carbon Emissions Reduction Target (CERT), was used to insulate homes, and thus although the low carbon measures have slightly increased bills, this money is being used to lift the most vulnerable out of fuel poverty.

From the graph above, it can be seen that renewable energy is not increasing bills. The reliance on wholesale prices of gas are a major contributor, and it seems likely that fuel bills will continue to increase with the wholesale price of fossil fuels, which are showing a general long term increasing trend.

The Future

It is important to state that a greater dependence on renewable energy will protect the UK somewhat from these increases, the UK expects to have 30% of electricity from renewables by 2020 [2] . The gas grid will be mainly natural gas, unless there is a considerable increase in the production of gas through methods such as anaerobic digestion. Currently this is limited to a few brewery waste and sewage schemes, so there is considerable growth potential.

Work by the Committee on Climate Change has shown that if renewable energy systems continue to be invested in, this will increase energy bills by £100 by the year 2020. However, not investing in renewable energy could lead to far higher bills. For example,  if fossil fuel gas is the main component of the energy system in the UK in the future, then bills could increase by £600 by the year 2050 [3].

In short, renewable energy is not the major cause of energy price increases, and not supporting renewable energy will cause bills to be increased even more.

[1] – Household energy bills – impacts on meeting carbon budgets, Committee on Climate Change, 2011

[2] – National Renewable Energy Action Plan for the United Kingdom“, UK Government, 2009

[3] – Energy prices and bills – impacts of meeting carbon budgets“, Committee on Climate Change, 2012

The effects of fuel poverty on children

Narec Distributed Energy have been carrying out a range of work to use renewable energy and low carbon technologies to fight poverty, specifically fuel poverty, but this also has a major impact on child poverty.

Fuel poverty can have major effects on children. To give general information on child poverty in the UK, a well referenced selection of information is given by CPAG (Child Poverty Action Group) [1]:

  • There are 3.8 million children living in poverty in the UK today. That’s 29 per cent of children, or more than one in four. [2]
  • There are even more serious concentrations of child poverty at a local level: in 100 local wards, for example, between 50 and 70 per cent of children are growing up in poverty [3].
  • Work does not provide a guaranteed route out of poverty in the UK. Almost two-thirds (58 per cent) of children growing up in poverty live in a household where at least one member works [2].
  • People are poor for many reasons. But explanations which put poverty down to drug and alcohol dependency, family breakdown, poor parenting, or a culture of worklessness are not supported by the facts[*].
  • Child poverty blights childhoods. Growing up in poverty means being cold, going hungry, and not being able to join in activities with friends. For example, 71 per cent of families in the bottom income quintile would like, but cannot afford, to take their children on holiday for one week a year [2].
  • Child poverty has long-lasting effects. By 16, children receiving free school meals achieve 1.7 grades lower at GCSE than their wealthier peers [4]. Leaving school with fewer qualifications translates into lower earnings over the course of a working life.
  • Poverty is also related to more complicated health histories over the course of a lifetime, again influencing earnings as well as the overall quality – and indeed length – of life. Professionals live, on average, eight years longer than unskilled workers [5].
  • Child poverty imposes costs on broader society – estimated to be at least £25 billion a year [6]. Governments forgo prospective revenues as well as commit themselves to providing services in the future if they fail to address child poverty in the here and now.
  • Child poverty reduced dramatically between 1998/9-2010/11 when 900,000 children were lifted out of poverty [2]. This reduction is credited in large part to measures that increased the levels of lone parents working, as well as real and often significant increases in the level of benefits paid to families with children.
  • Under current government policies, child poverty is projected to rise from 2012/13 with an expected 300,000 more children living in poverty by 2015/16 [7]. This upward trend is expected to continue with 4.2 million children projected to be living in poverty by 2020.

According to the charity Shelter in the report [8]; “These children are living in damp, cold, infested housing or on estates that are shamefully neglected and ridden with fear and filth. Living at the whim of bad landlords who threaten and neglect. Living under the cloud of eviction and debt. Or they are literally homeless – not on the streets but in emergency housing waiting for somewhere permanent to live.”

Information is given by “The Impact of Fuel Poverty on Children” policy briefing written by Professor Christine Liddell [9]. This looked into peer reviewed research globally on the effects of fuel poverty on children.

For example, a study in the US compared two groups of low income children in five different cities. Group 1 lived in families which were receiving a winter fuel subsidy, and group 2 were not. It was found that infants in homes without subsidy were 40% more likely to be admitted to hospital or primary care clinics in their first three years. They were also more likely to be underweight.

Why is this? Like anyone, infants stay warm by burning calories. Thus when they are cold, they have fewer calories available for other jobs such as growing or building a healthy immune system. Additionally, the paediatricians involved in this work speculated that there are risks to children’s cognitive development from years of being underweight.

To put it simply, as stated by the housing charity Shelter, “bad housing wrecks lives”

Work carried out by Narec Distributed Energy which has impacted on fuel poverty includes:

The most recent Narec news stories on this work are:


[*] For example, G Hay and L Bauld, Population estimates of problematic drug users in England who access DWP benefits, Department for Work and Pensions, 2008, suggest that 6.6 per cent of the total number of benefit claimants in England were problem drug users. While drug misuse may prove to be a key reason this group of people finds it hard to escape poverty, it clearly has no explanatory power for the other 93.4 per cent of claimants.

[1] “Child poverty facts and figures,” [Online]. Available: http://www.cpag.org.uk/child-poverty-facts-and-figures#footnote1_xgr6bwh. [Accessed 2012 08 30].
[2] “Households Below Average Income, An analysis of the income distribution 1994/95 – 2010/11,” Department for Work and Pensions, 2012.
[3] “Child Poverty Map of the UK,” End Child Poverty, 2011.
[4] “GCSE and Equivalent Attainment by Pupil Characteristics in England 2009/10,” Department for Education , 2011.
[5] “Life expectancy at birth and at the age of 65 by local areas in the UK, 2004-6 and 2008-10,” Office of National Statistics, 2011.
[6] D. Hirsch, “Estimating the costs of child poverty,” Joseph Rowntree Foundation, 2008.
[7] J. B. a. R. J. M Brewer, “Child and working age poverty from 2010 to 2020,” Institute for Fiscal Studies, 2011.
[8] “Toying with their future – the hidden cost of the housing crises,” Shelter, 2011.
[9] C. Liddell, “The impact of fuel poverty on children,” Save the Children, 2008.

Construction of 3.4MW wind turbine in Blyth

Blades for 3.5MW wind turbineBlades for 3.5MW wind turbine

Over the past week we have been watching the construction of a new REPower 3.4MW wind turbine for Hainsworth Energy.

It has been an incredibly impressive event to watch, as after two weeks of preparation the whole system was put together in four days.

The system will be commissioned at the end of September.

Device Statistics

  • Power Output: 3.4MW
  • Energy: Enough to supply over 2000 homes a year
  • Height: 128 meters

Projects such as these help protect the UK from the global energy prices and help combat anthropogenic climate change.

Below we have a range of photos, and more on the Narec Distributed Energy Twitter

 

Construction of RE Power wind turbine in BlythPart one of the tower put in place
Construction of RE Power wind turbine in BlythPart three of the tower lifted
Construction of RE Power wind turbine in BlythCrane ready to move part three of the tower into place
Construction of RE Power wind turbine in BlythFirst three parts of the tower connected
Construction of RE Power wind turbine in BlythNacelle lifted up toward the top of the tower
Construction of RE Power wind turbine in BlythNacelle moved into place
Construction of RE Power wind turbine in BlythNacelle now connected
Construction of RE Power wind turbine in BlythClose up of nacelle
Construction of RE Power wind turbine in BlythThree blades connected to hub lifted as one
Construction of RE Power wind turbine in BlythBlades moved into position
Construction of RE Power wind turbine in BlythCareful lifting an alignment of blades
Construction of RE Power wind turbine in BlythCompleted wind turbine

Narec Distributed Energy launch new renewable energy website

sunflowersNarec Distributed Energy

At Narec Distributed Energy we have now launched our own website.

We are part of the UK’s National Renewable Energy Centre, a world leading centre for all renewable and low carbon technologies. This website is dedicated to the substantial work which Narec Distributed Energy carry out in renewable and low carbon technologies, particularly in the built environment.

We carry out a range of services on a range of different renewable and low carbon technologies, using our dedicated team within Narec Distributed Energy, and also using staff from the wider National Renewable Energy Centre.

To see a selection of the project we have work on (or are currently working on) please have a look at the case study section of this website:

To see the latest news from Narec Distributed Energy, please subscribe to the RSS for our news section, and to our twitter at @NarecDE

We thank 21Inspired for the quick and professional website which they created