I apologise for the unavoidable absence of Sarah White, deputy secretary general of the Department of Communications, Energy and Natural Resources and, along with Ms Catherine Hazlett, the co-chair of the affordable energy group. Ms White has a long-standing commitment outside the country but she sends her regrets.
I and my colleagues from the Department of Social and Family Affairs and the affordable energy group welcome this opportunity to outline to the Joint Committee on Social and Family Affairs our contribution to alleviating the effects of energy policy. Our presentation will be delivered by various members of the group as we believe this is the most appropriate mechanism for demonstrating how the underlying causes of energy policy are being addressed on collective and individual bases.
In an era when volatile fuel prices are having a significant impact on Irish energy costs, the need for a close and mutually reinforcing relationship between energy and social policy is ever more important. Increasingly, the alignment of diverse policy areas will be needed to secure effective interventions for the most vulnerable in society. In my own area of energy efficiency and affordability, the single greatest action that can be taken to protect households is improving thermal efficiency. The more work we can do to reduce demand for energy through structural or behavioural change, the less risk of households falling into energy poverty. However, the challenge is extensive.
We have tried to keep our presentation as brief as possible, although members will recognise that it addresses an inherently complicated issue with many interconnections between relevant Departments, agencies and bodies. The presentation comprises four elements. I will begin by providing a summary of the role and work of the group, followed by a description of the methodologies used to determine the extent of the problem and the differing figures that result. The presentation will then attempt to highlight the actions being taken to mitigate the three underlying causes of energy policy, namely, thermal inefficiency, high energy prices and low levels of income. The representatives from ESB and Bord Gáis will then outline some of the issues they face on a daily basis and the actions they are taking in response. The concluding section of the presentation will identify the group's future initiatives and work.
As the committee will be aware, the affordable energy group was first convened in July 2008 and has met seven times to date. Its current membership comprises the Departments of Communications, Energy and Natural Resources, Social and Family Affairs, the Environment, Heritage and Local Government, Finance and the Taoiseach, and Bord Gáis, ESB, Sustainable Energy Ireland, the Commission for Energy Regulation and, more recently, the Institute of Public Health. The committee will also be familiar with the overarching context of the group's work as articulated in the energy policy framework published in March 2007 and the national action plan for social inclusion 2007-16.
Over the past year, the group has benefited from a number of informative presentations from the Institute of Public Health, Energy Action, Age Action Ireland, the Economic and Social Research Institute, the Northern Ireland Utility Regulator and the chair of the fuel poverty advisory group in the North. Each presentation has helped to inform decision making on a collective as well as an individual basis. For example, the striking presentation given by Age Action Ireland directly led to the creation of the pilot warmer homes scheme plus. The group's collective deliberation has informed the drafting and publication of the energy poverty elements of the national energy efficiency action plan. The group has also worked with SEI to refresh and republish the Keep Well and Warm booklet, which has been circulated to members. More than 132,000 copies of this booklet have been distributed this year alone. Members of the group have also collaborated with SEI and other members of the research community on the fuel poverty action research project.
At our last meeting with the joint committee, clarity was sought on the causes and extent of energy poverty in Ireland. It is widely acknowledged that energy poverty rests primarily on three pillars, namely, a lack of thermal efficiency in the home, high energy prices and low levels of income. Depending upon individual circumstances, each attribute can have a greater or lesser impact on the extent to which a household is at risk of energy poverty. We have attempted to structure our presentation in a manner which will give members a sense of the scale of the issue and the collective actions being taken to address the underlying causes of energy poverty.
One of the greatest challenges in this area is identifying a platform for measuring energy poverty which is both robust and serves the needs of policy makers, NGOs and others. The three main methods used in this regard are the expenditure method, subjective measures and objective measurement of residential conditions. As we do not at present collect data on the third option, objective measurement, I will not discuss it today. Of the three, the expenditure method is perhaps the most well known and easiest to reference. The method is derived from Boardman's somewhat arbitrary figure of 10% of net income being required to meet the energy needs of a household, including transport. Given the arbitrary nature of the figure, this method is somewhat unsatisfactory in the absence of further examination in an Irish context. The ESRI has estimated that in 2008, 19.4% of the population would have come within this definition, which equates to slightly over 300,000 persons. The expenditure method is used in the UK as its benchmark definition.
If we look at subjective measurements, such as the number of households reporting an inability to afford sufficient heat, one finds the much lower figure of approximately 3.6% in 2006, or 56,000 households. However, the expenditure method and subjective measurement represent differing perspectives on energy poverty and, as such, neither is inherently correct or incorrect. As I will discuss in my concluding remarks, the group will seek to clarify this issue in its future initiatives.
