Policy

Helping households to cut their energy bills

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 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.

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 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

Big Energy Saving Network

DECC has launched a £752,000 fund to support eligible third sector organisations and community groups. The Big Energy Saving Network will deliver an extensive programme of outreach to vulnerable consumers, focussed on helping them reduce their energy costs and energy consumption.

This funded outreach programme will run through autumn/winter 2013/14, concluding on 31 March 2014. The programme of outreach will be led by 160 specially trained Network ‘Champions’, 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. This will be supported by a new statutory fuel poverty strategy which we intend to consult on in the spring.

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 closes for responses on 16 April 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.

In October 2012, DECC offered English Local Authorities the opportunity to bid for funding to reduce the extent of fuel poverty in their area; putting local action at the heart of efforts to keep homes warm and bills down. DECC has 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 offers considerable potential for learning and insight into Local Authority-led delivery models for alleviating fuel poverty. For more information please see the DECC Local Authority Competition page.

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