Scenario modelling 2023 fuel poverty levels under 2019 fuel prices
This publication provides the results from scenario modelling of fuel poverty rates in 2023 under 2019 energy prices.
Part of
Overview
The Fuel Poverty (Targets, Definition and Strategy)(Scotland) Act 2019 sets out the definition of fuel poverty in Scotland. Fuel poverty is affected by four key drivers: levels of household income, the price of fuel required for space and water heating, the energy efficiency of the dwelling, and the required use of fuel by households to maintain satisfactory heating regimes.
In 2022 the weighted average index price of fuel[1] in Scotland grew by 82.7% compared to 2021 prices, driven in part by uncertainties over the future Russian gas supply following the invasion of Ukraine. This was followed by a further increase in the average index of 15.9% in 2023. Between 2019 and 2023, the average index price has increased by around 96%.
Due in part to these large scale increases in fuel prices the fuel poverty rate in Scotland has risen from 24.6% in 2019[2] to 34% in 2023. Therefore in order to understand how changes in the price of domestic fuels have affected the fuel poverty rate we have carried out scenario modelling which seeks to isolate the impact of increases in energy prices since 2019 on 2023 levels of fuel poverty.
The analysis which underpins these findings uses Scottish House Condition survey (SHCS) data from 2023 and 2019 fuel prices to model a hypothetical rate of fuel poverty under a scenario in which energy prices in 2023 remained at 2019 levels with all other factors remaining constant[3]. For reference the modelled annual running costs of households in the SHCS sample for 2019 and 2023 are in Annex A.
[1] DESNZ publish quarterly energy prices data on the price of key fuels which enables us to construct a time series of the price of fuels for the average Scottish household over the longer term. Using information from the SHCS about the fuels used for space and water heating we can weight the published national quarterly fuel price indices, and produce an average index value for the price of the heating fuel requirement for Scotland. See figure 3.3 in the 2023 SHCS
[2] Due to Covid-19 restrictions it was not possible to resume the 2020 SHCS and the 2021 SHCS was undertaken using an external+ approach. However, due to the change in approach for the 2021 SHCS, the results are not directly comparable with the National Statistics from previous waves of the survey. Therefore the 2019 survey represents the most recent data pre energy price increases.
[3] While cost of living payments present in 2023 are included in household incomes in this analysis the £201 Energy Bill Support Scheme is not included as it represents a direct reduction to energy costs that was not present in 2019.
Contact
shcs@gov.scot