Covid is a moment of opportunity in the battle against fuel poverty

With the energy sector looking ahead to a harsher than usual winter, fuel poverty charities such as National Energy Action are preparing to tackle increased vulnerability over the colder months. Utility Week catches up with Adam Scorer, chief executive of NEA, who believes Covid presents a “massive opportunity” to highlight both the fuel poverty and decarbonisation agendas, and gives his thoughts on why a shared priority service register would be a major benefit to consumers.

“NEA is 40 next year and we’re still here. The problem has not only not gone away, sometimes it’s difficult to see whether it’s shifted significantly.”

For Adam Scorer and NEA, every winter presents immense challenges in tackling the issue of fuel poverty. Currently around 4 million people in the UK are estimated to be fuel poor and research published by Citizens Advice in August suggested that around 2.8 million customers have fallen behind on at least one energy bill during the pandemic.

Since lockdown was announced in March, the energy sector has been battling to protect the most vulnerable consumers, with a package of measures swiftly agreed between government and retailers to ensure they are kept on supply. Scorer believes now is the time for suppliers to identify who needs support before winter.

Says Scorer: “What you’ve now got is the time to plan and greater insight about who gets captured and who gets left out of those measures and it will be unconscionable if we go into the winter without having really solidified that support and extended it. It needs to be extended in two ways in particular.

“One is that suppliers have a role in this. They need to be a little more activist in identifying and reaching out to those customers who they know are going to be stressed financially or in other ways in relation to their payment. Don’t wait for them to come forward. Go out and directly offer them support, because we know that lots of people will not present themselves for support until they are massively in debt or they haven’t used energy for a number of months.”

Secondly, Scorer adds, the sector must understand what it can and cannot do through digital means. He cites the fact that 9 million people are unable to use the internet competently for a number of reasons such as financial difficulties, connection issues and a lack of e-literacy.

“We had the Green Home Grant come out which is primarily, at the moment, an online voucher system including for low-income households. You have got to make sure that even though we do whatever we can and maximise the impact of digital outreach and digital support, there are millions of people – probably the most vulnerable – for whom that is still a foreign land. We just need to make sure that we are utilising other means, and that does mean directly approaching people who we know are in that vulnerable, at-risk group to tell them what support is available and make sure they take advantage of it.”

One challenge NEA has faced lately is being unable to reach out into the community and engage with those in need.

Scorer explains: “For a long time our focus has been building the capacity of especially small community organisations, as well as local authorities and health professionals and energy suppliers. Through training and community events with organisations that support veterans or people with cancer, we make sure that people whose primary function or role is not about fuel poverty or energy are able to grow the way they can support their cohort.”

He adds: “It’s a cliché, but we know that’s the tip of the iceberg and we know that we probably won’t reach some of the people that we would have got through community events, turning up at church halls or in other organisations.”

A moment of opportunity

While the sector has primarily been concerned with the immediate issues presented by the pandemic, there have been moments of reflection on pre-existing issues, especially concerning vulnerable customers.

Scorer believes that the coronavirus pandemic has provided a “moment” of awareness of what it means to have a warm home. In addition, he believes the challenges of hitting the 2050 net zero target are also highlighting the need for improved housing.

He continues: “Both Covid and net zero should supercharge the awareness of what it means to have a good home, a warm home, the systemic health, economic and other benefits of people living in warm homes. They are aligned and people are at pains to talk about fair transitions, just transitions and focusing on the public health aspect of it.

“While they are aligned, they are not the same and they could easily become detached. The challenge is to recognise it, not just in rhetorical way, but include it in the language of response to Covid and fuel poverty.”

“I think Covid is a moment which is full of the possibility of understanding all those things together, but it’s so much easier to say it than to sustain it as you struggle with all the moving parts in the public health and the net zero agenda,” he adds. “It’s a massive opportunity but it’s the responsibility of organisations like us to make sure that those people who are driving forward those two bigger agendas are alert to the negative role that cold, damp homes play and the positive role that warm decarbonised good homes play in it as well.”

Another area in which Scorer believes the pandemic can be an instrument of change is the smart meter rollout.

The rollout took a hit after lockdown measures were introduced, with the rate of installations falling by almost 95 per cent in April. Installers were initially only allowed to enter homes in emergencies, where consumers were either off supply or in danger of being so.

Scorer believes smart meters are the precondition for addressing one of the most “egregious market failures in energy” – the challenges involved in being a PPM customer and the inability of suppliers to respond to crisis for those customers instantly, rather than weeks later.

He says: “Many things should be supercharged by Covid and in the energy system one thing which absolutely has to is the focus of the smart meter rollout. Most people would say we shouldn’t have started from the place we did in terms of doing it through competitive suppliers. Smart prepay should be accelerated.

“Not only the installation of the meters, but the development of the levels and personalisation of service, the speed of response, as well as tariff structures, should be accelerated from suppliers so that the people on prepay, the most vulnerable, should be the first beneficiaries.”

A shared PSR

Among the many discussions about how best to alleviate fuel poverty has been the potential of a shared priority services register (PSR). Electricity North West and United Utilities trialled such a scheme in 2018, but plans to roll out a common register nationwide in April this year were delayed.

More recently Auriga Services, a subsidiary of Severn Trent Trust Fund, revealed it expects to launch a nationwide portal to share information about vulnerable customers later this year.

Scorer points to several reasons why a shared PSR will be a major benefit to vulnerable consumers. One such reason is the reluctance of some to admit they are in difficulty.

“The data sharing aspect is crucial because what we know is that people for a whole bunch of reasons – the language of fuel poverty, of priority services, of vulnerability – a lot of people will be ashamed to come forward and identify as such. If they can get up the courage to say it once, don’t make them say it again,” he remarks.

He further argues that not all utilities have the same level of engagement with consumers as energy retailers do.

“The other reason why it’s important is that water companies, gas distribution networks and electricity distributors don’t have the same level of direct engagement with the beneficiaries of their services as suppliers do.

“You want to be able to exploit the data capture of those people that are engaged with people who are paying bills on a regular basis so all parts of the eco system need to benefit from the way in which it comes up.”

He admits, however, that there is a “big obstacle” in the way of achieving this goal, such as fears around data protection, adding: “There is a tension between the data protection movement and the consumer benefit movement but there must be a way of doing it because the prize is so big for vulnerable consumers.”

Scorer believes that for years, the expectation has been that consumers shoulder the burden of ensuring the markets work, mainly though switching.

He concludes: “It is the responsibility of government, regulators and regulated entities to make sure that that burden is shouldered by them. And they do – that’s what the register is for – but you’ve got to remove some of the friction.”