Fuel poverty is a sensitive issue, at home and in the headlines. Jeremy Nesbitt, Managing Director of National Grid Affordable Warmth Solutions, explains how his company is helping alleviate the problem, and why he believes information-sharing, both with government departments and between the ‘big six’ energy companies, is the best way to create a warmer Britain for everyone.
Fuel for thought
“Our challenge is to persuade the big six that knowledge isn’t always power, and by providing basic information, they can help us and the wider population immensely.”
Jeremy Nesbitt, Managing Director of National Grid Affordable Warmth Solutions
6,573 – the total number of houses to which AWS has delivered affordable warmth
19,921 – the total number of connections made to 'fuel-poor' homes
Source: National Grid Affordable Warmth Solutions
We enter 2014 with an estimated 6.5 million people in the UK suffering from ‘fuel poverty’. This means they need to spend more than 10% of their income so their homes are adequately warm. For a developed country like the UK this is a troubling statistic, and one for which there’s no easy answer.
People can be in fuel poverty for several reasons. These include the type of energy and heating systems they have, levels of frequency and consumption, the fabric and structure of their houses and, as we all know from recent headlines, the continual rise of domestic fuel bills.
National Grid Affordable Warmth Solutions (National Grid AWS) is a community interest company set up in 2008 to tackle the problem. We operate within National Grid’s Gas Distribution Network, connecting the most vulnerable people to the gas network on behalf of local authorities, housing associations and private sector clients.
Some residents suffer from antiquated heating systems, like electrical storage heaters, that are either deeply inefficient or ineffectual, while others live in stone-built properties that lose vast amounts of heat.
Since 2008, I’m proud to say we’ve made real progress in helping people who live in such circumstances. Our original target was to achieve 5,000 new gas connections by 2013 and we achieved that three years ahead of schedule. Flagship achievements such as piloting an air source heat pump energy solution to properties that are off the gas grid (which yielded an 81% approval rating from tenants) and connecting 100 park homes to the network in Bedfordshire, have all shown what can happen when we investigate new technologies and work hard to engage communities.
For there is more to our role than laying pipe in the ground. We recognise that ‘fuel-poor’ customers need help to install new gas heating systems and we’re delighted to be able to support them. So far we’ve secured over £20million for these homes and even invested our own money at times when third-party funding wasn’t available.
At one of our largest projects in North Mansfield, we invested £250,000 to convert dated coal-fired heating systems. And, for the park home site in Bedfordshire, we funded the installation and conversion of heating systems and cookers – and fitted combined carbon monoxide and smoke detector alarms to the value of £150,000. This was supported by a series of opening evenings and surgeries that gave consumers information about the cheapest and most effective ways to heat their homes. In fact, we’ve estimated that National Grid AWS’s actions and advice alone can save people 30% off their energy bills.
This local, personal service is what makes us different – and sustainable. We use local labour, local materials and outsource support services like finance and HR locally too. Because of that, our teams bring a great deal of local knowledge to the job they do. And by having National Grid as a sponsor, we can access national expertise and credibility, both of which help bring more people to the table. In this respect, National Grid is supportive but not managerial. All our business decisions are based purely on what’s best for communities in which we operate, and we reinvest all our profits into the cause.
Shared sense of purpose
National Grid itself is not a supplier, but our networks play a vital part in connecting everyone to the energy they need. Our part of the bills people pay for gas comes to just over £150 of their annual total – this enables us to operate and maintain our networks; including, critically, the 24/7 emergency response service for reported gas leaks.
Our investment has been thoroughly reviewed and scrutinised by our customers and shareholders; and then agreed by the regulator – the only part of the bill that is.
Everyone in the industry has a responsibility to tackle fuel poverty, but we won’t make any meaningful progress unless we collaborate as one and have a shared sense of purpose.
Over the next eight years, our aim is to deliver just over 35,000 new gas connections. The most difficult thing about this is not the job itself, but identifying the people who need our help in the first place.
A recent initiative has seen us – together with Ofgem and the Department of Energy and Climate Change – establish a cross-industry group that is working towards creating a comprehensive database of all UK properties that aren’t connected to the gas system. For example, we know there are some 26 million electricity customers in the UK compared to only 22 million gas customers, so straightaway that’s potentially four million properties that, when identified, could benefit from innovative solutions.
Knowledge isn’t power
As it stands, we have some challenges to overcome around the sharing of data with other people within the industry. In a way, that’s understandable, because the market is a hugely competitive one. But it’s this kind of data that can help us build a detailed picture of UK energy and identify those in need. So our challenge is to convince government and the energy suppliers that knowledge isn’t always power, and that by providing basic information, they can help us and the wider population considerably.
The positive outcomes could be enormous. In March 2013, we estimated that, since our formation in late 2008, we’ve helped reduce the CO2 emissions from old heating systems by 1.6 million tonnes and will generate £63.5 million worth of energy savings.
Such figures highlight the impact we have made so far, and the possibilities within reach if our work gathers momentum. What we do as an industry today will help to preserve what we value and have a lasting legacy on the future – helping to make affordable warmth for all not just a lofty ambition, but a day-to-day reality.
Click here to find out more about National Grid Affordable Warmth Solutions.
Amy Gent, National Grid Strategy Analyst, Energy Strategy & Policy believes that when it comes to changing the behaviour of consumers in using energy, we must first harness the power of education. Click here to read more.
Marcus Stewart, National Grid Energy Demand Manager, examines the scenarios and some of the factors influencing the UK’s demand for energy.