Issue

Rising energy prices are affecting many households. The government can’t control unpredictable global energy prices but we can help households keep their energy bills as low as possible, support those most in need and take action to help secure energy supplies in the long term.

Actions

Helping people use less energy

DECC has launched the following initiatives to help increase energy efficiency in households so consumers can save money on their energy bills:

  • Green Deal – lets homes and businesses make energy efficiency improvements with some or all of the cost paid for from the savings on their energy bills

  • Smart meters – a programme to install gas and electricity meters that provide near real-time information on energy use in households and small businesses

  • The Energy Company Obligation (ECO) – a subsidy from energy suppliers that will work alongside the Green Deal to provide energy-saving home improvements for those most in need and for properties that are harder to treat

  • Electricity Demand Reduction project – assesses whether there is sufficient support and incentives to households, businesses and organisations to improve the efficiency of their electricity use

  • Smarter Heating Controls Research Programme - to establish whether ‘smarter’ heating controls reduce domestic energy consumption

  • The Central Heating Fund, an English Local Authority competition to support the installation of first time central heating systems in low income households who do not use mains gas as their primary heating fuel.

The Department for Communities and Local Government (DCLG), supported by DECC, is also working to improve the energy efficiency of buildings.

Helping households get the best deal

Households can save up to £200 per year by switching their energy suppliers. This is why we are pushing energy companies to make switching much easier and quicker.

Recent reforms in the energy market to make it simpler, clearer and fairer have made it easier for consumers to check their existing deal and work out if they’d benefit from a change. It is now even easier to go energy shopping and get a better deal on gas and electricity

The energy regulator Ofgem has a site that goes through everything consumers need to know to lower their energy bills. Find out how to Be An Energy Shopper.

Energy UK have put together this simple animation on how to switch supplier or tariff.

Energy UK have put together this simple animation on how to switch supplier or tariff.

We are also helping consumers find the best deals on their energy tariffs by:

Helping the most vulnerable households

We are making sure the most vulnerable households get direct financial help through:

  • Warm Home Discount - participating energy suppliers help low-income and vulnerable households meet their energy costs

  • Winter Fuel Payment - annual payment of up to £300 for pensioner households

  • Cold Weather Payment - payment during periods of severely cold weather to pensioners who receive pension credit or people on income-related benefits who meet certain criteria

We are also helping vulnerable and fuel poor households through new funding that will deliver across 2015/16 and provide learning for the design and delivery of future support.

  • Fuel Poverty and Health Booster Fund - £1m of funding has been released to 9 English local authorities to scale up existing local health and fuel poverty projects, delivering assistance to some of those most vulnerable to the effects of living in a cold home.

  • Local Fuel Poverty Innovation Funding – we are inviting partners to share ideas for the shape and focus of the next wave of pilot activity which will see up to £2m awarded to support local fuel poverty innovation later in the year. Further information on the role of partnership and learning in the renewed strategic approach to tackling fuel poverty in England.

Big Energy Saving Network

Following the success of the inaugural 2013/14 Big Energy Saving Network, DECC has provided £1m funding to continue the programme into 2014/15. The Big Energy Saving Network delivers an extensive programme of outreach to vulnerable consumers, focussed on helping them reduce their energy costs and energy consumption.

The Network will run through autumn/winter 2014/15, with outreach activity concluding on 13 March 2015. Each Big Energy Saving Network project is led by a specially trained Network ‘Champion’, voluntary workers that will co-ordinate the training of further volunteers and front line workers. These volunteers and frontline workers will in turn deliver proactive advice to consumers on energy issues via an assisted action approach.

Reforming the electricity market

Electricity Market Reform will lower household bills by 5% to 9% (on average) between 2016 and 2030 (compared to continuing with existing policies).

Securing the UK’s energy supply

Our energy and climate change policies are designed to reduce the UK’s sensitivity to spikes in global oil, gas and coal prices.

Read more about what we’re doing to secure the UK’s energy supply.

Background

At the Spending Review in October 2010 we announced we would commission an independent review of fuel poverty in the UK. The final report of the Hills Poverty Review was published in March 2012.

Following consultation, a framework for future action on fuel poverty was published in July 2013 which sets out the way the Government intends to measure fuel poverty going forward and the action the Government intends to take to help people who are fuel poor.

In October 2011 the Department of Energy & Climate Change (DECC) hosted a consumer energy summit that brought together consumer groups, energy suppliers and the Office of the Gas and Electricity Markets (Ofgem) to discuss a joint effort to support consumers. One of the actions agreed at the summit was for Citizens Advice to organise Big Energy Week.

The first Big Energy Week took place on 16 January 2012, with Citizens Advice, consumer groups, energy suppliers, Ofgem and switching sites hosting around 130 outreach events nationwide. Advice was offered to around 75,000 consumers throughout the week.

Big Energy Saving Week has run twice since, in October 2012 and again in January 2014.

In November 2012 DECC launched our Energy Efficiency Strategy, which sets out how we will maximise existing policy and realise the wider energy efficiency potential in the UK.

Bills and legislation

The Energy Act 2013 contains a number of consumer protection provisions including:

  • setting a limit on the number of energy tariffs offered to domestic consumers
  • the automatic move of customers from poor value closed tariffs to cheaper deals, and
  • requiring suppliers to the provide information to consumers on the best alternative deals available to them.

We have amended the Warm Homes and Energy Conservation Act 2000 (WHECA) through the Energy Act 2013 to put in place a new legal framework that requires us to set a new fuel poverty target in secondary legislation.

In December 2014 we put in place a new long term fuel poverty target for England. In March 2015 we published [cutting the cost of keeping warm: a fuel poverty strategy for England[(https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/408644/cutting_the_cost_of_keeping_warm.pdf).

The Energy Act 2010 allowed for the introduction of the Warm Home Discount scheme, while the Energy Act 2011 includes provision for the Green Deal and ECO.

The Home Energy Efficiency Scheme Regulations, first published in 2005, upholds the Warm Front scheme. The regulations were revised in 2006, 2009, 2010, 2011 and 2012.

Who we’re consulting

Consultation on the future of the Energy Company Obligation

We launched a consultation on the future of the Energy Company Obligation on 5 March 2014. This consultation is a key opportunity to make sure that the way we implement changes are as effective as possible, taking account of the needs of the industry and the experience of delivering ECO over the last year. The consultation closed for responses on 16 April 2014.

Consultation on preparing for a new fuel poverty strategy

We published Cutting the cost of keeping warm: a consultation that will help us to prepare a new fuel poverty strategy to set out how we intend to achieve the new fuel poverty target. The consultation seeks to explain how we will move from the broad principles we set out in a Framework for Future Action on Fuel Poverty to helping those that need it most, driving cost effective interventions and maintaining our regard for those most vulnerable to the effects of living in a cold home. We seek views on how we can improve the design and delivery of policy in order to try and meet the target. The consultation closes for responses on 7 October 2014.

Consultation on the extension to the Warm Home Discount in 2015/16

We have published a consultation on Warm Home Discount: extension to 2015/16 following the government commitment to extend the scheme to 2015/16. This consultation does not propose any significant changes to the structure of the scheme but asks for views on some a number of changes to improve the effectiveness of the scheme. Following the consultation, changes will be included in the updated Regulations. The consultation closes for responses on 13 November 2014.

Who we’re working with

Ofgem is supporting the Citizens Advice Energy Best Deal campaign, which is funded by energy suppliers and teaches consumers how to shop around, reduce their energy bills and get help if they’re falling behind on payment.

DECC sponsors the Fuel Poverty Advisory Group (FPAG) for England, an advisory non-departmental public body made up of member organisations including energy suppliers, charities and consumer bodies. FPAG has been subject to its first Triennial Review, the result of which have now been published.

The DECC Local Authority Fuel Poverty competition supported local action to reduce the extent of fuel poverty in across England; putting local action at the heart of efforts to keep homes warm and bills down. DECC provided £31 million of support to 60 projects, involving 169 Local Authorities working individually or as part of consortia. The number and variety of projects provided learning and insight into Local Authority-led delivery models for alleviating fuel poverty. For more information please see the DECC Local Authority Competition page.