Poverty Watch – Special edition on fuel poverty

Given the drama surrounding the Labour / Green electricity policy it seems appropriate for this week’s Poverty Watch to explore the topic of fuel poverty in NZ. Going some small way to alleviating fuel poverty is what this policy revolution is all about.

In 2012 the Community Energy Network launched a fuel poverty awareness campaign:

Fuel Poverty is usually recognised as an ‘inability to afford to heat a home’ which comes about through a combination of low quality housing, low incomes and increasing energy prices.

Extensive research indicates fuel poverty is present in New Zealand, affecting up to a quarter of New Zealand homes during winter, negatively impacting on the health, wellbeing and productivity of every-day New Zealand families.

CEN are collecting real-life feedback about living in fuel poverty, and pushing for regulatory change. The campaign web is site www.warmerwinters.org.nz, from the about page:

Three main contributing causes of fuel poverty:
1. Poor energy efficiency in the home :
– Lack of money to invest in better efficiency (heating, insulation, draughtstopping etc)
– poor structural condition (gaps, leaks, draughts, poor ventilation etc)
2. High energy prices (and a dependency on electricity)
3. Low household income

Other definitions of fuel poverty are more specific (pdf):

“Fuel poverty” has been defined as the condition when the cost of fuel to adequately heat the home to achieve a satisfactorily warm environment is more than ten percent of a household’s income.

From the same document (see the original for footnote details):

When fuel costs are too high, homes cannot be adequately heated, which can result in household members living less comfortably, with a poorer quality of life and poorer health.

The World Health Organisation recommends a minimum indoor temperature for health of 18°C, with up to 20 to 21°C for more vulnerable groups, such as older people and young children.² Prolonged indoor temperatures below 16°C can result in a serious risk to health, including increased risk of respiratory and cardiovascular conditions.

Many houses have insufficient or no insulation as minimum insulation standards were only introduced in building regulations in 1978.³ People who live in warmer homes tend to be healthier, with fewer GP and hospital visits and fewer days away from work due to illness.⁴ Cold, damp houses are associated with an increased rate of asthma and other respiratory illnesses. Much of this is caused by mould, which thrives in damp conditions. In addition to the physical illnesses that can develop from cold and damp housing, there are a number of studies that show significant effects on mental health including an increase in anxiousness and depression.⁵

There are several factors which have exacerbated fuel poverty in New Zealand:

the poor quality of New Zealand homes in terms of thermal efficiency
relatively high levels of income inequality and
an increase in the price of electricity.⁶

It is a disgrace that fuel poverty is a serious problem in NZ – see The Listener’s “Fuel poverty in the land of plenty” (paywalled, but quoted here):

Fuel poverty in the land of plenty

Soaring electricity prices are causing more New Zealanders to struggle to heat cold, damp, unhealthy houses.

In July 2010, five-and-a-half-month-old Roretana Holland was found dead in the bed he was sharing with his four-year-old sister, at his parents’ home in Warspite Ave, Porirua. The coroner for the case, Ian Smith, warned once more about the dangers of cot death when sleeping arrangements are shared. Social deprivation, smoking in the household and excessive alcohol consumption were all there. But one part of the deprivation picture the coroner didn’t mention was why the children were sleeping together in the first place.

The four children shared a bedroom because the family had only a single oil heater to keep warm. The Holland household was one of the estimated 400,000 in New Zealand whose members are living in fuel poverty, where heating the home to a comfortable temperature eats up more than 10% of income. Pressure mounts to either skimp on heating or miss out on other essentials, instead.  …

The jump in fuel poverty in New Zealand appears driven by a troika of causes – low incomes, rising electricity prices and New Zealand’s crummy, badly insulated housing stock.

“Real wages are dropping for a proportion of the population, and unemployment is still relatively high,” says Howden-Chapman. “We have large houses compared with the rest of the OECD, and we’re making good progress with insulating them, but we still have a long way to go. And the cost of electricity in particular has been rising exponentially in the residential market.

“Sadly, those on the lowest incomes pay the greatest proportion of their income – almost 13% – on household energy, yet we know that houses in New Zealand are still cold and damp with all the problems that ensue from that.”

Living in cold damp housing poses serious health risks:

NZ catches death of cold – study

Sixteen hundred more New Zealanders die every winter than during other seasons, with researchers pinning part of the blame on cold, damp and poorly maintained homes.

Otago University researchers analysed deaths over a 20-year period and found 1600 more people died during the four winter months. The study has been published in the BMC Public Health journal.

The bulk of the deaths were people with circulatory, respiratory illnesses and infectious diseases. Infants and elderly people accounted for many of those who died during winter, and almost 10 per cent more women died in winter than men, the study found.

Labour should have done more to address this last time they were in office. Next time round with NZ Power to bring down the price of electricity (and proposed requirements for rental housing), they are going to have a significant impact on this serious problem. If we do nothing, if we leave it to “the market”, fuel poverty will only increase.