This analytical annex sets out the details of the analysis that has been undertaken to support the development of the strategic framework for fuel poverty. Section Two presents some high level snap-shots of the group of fuel poor households in 2010. It shows statistics on the current extent and depth of fuel poverty under the Low Income High Costs indicator as well as on the composition of this group of households across different demographic, dwelling and socio-economic characteristics.
Section Three presents the results of regression analysis that was undertaken in order to determine the household characteristics that are important in driving a household to be fuel poor or in severe fuel poverty. Section Four sets out the methodology, assumptions and results of work on fuel poverty projections. These projections are important in allowing us to understand the scope to make further progress to reduce fuel poverty through policy interventions. Section Five sets out the work to construct the Fuel Poverty Marginal Alleviation Cost Curve (FP-MACC). This work builds on the fuel poverty projections set out in Section Four to set out the ‘merit order’ of fuel poverty interventions. The FP-MACC will be an important tool in shaping future policies as it will help to show where there is cost-effective potential to make progress against the problem and the trade-offs associated with delivering more costly measures.
Section Six sets out the results of research that we have undertaken to help to estimate and monetise the health impacts of living in cold and poorly-insulated homes. While this is still a work-in-progress, it represents a big step forward in our understanding of the health impacts of cold homes and offers the possibility of being able to more fully capture the benefits associated with fuel poverty policies. Finally, Section Seven briefly sets out a proposal for the efficiency standard that may be used as the basis for the fuel poverty target