Using smart energy meter data to design better policy: Prepayment meter customers, fuel poverty and policy targeting in Great Britain

Abstract

During winter 2022–23, residential energy prices were exceptionally high in Europe. Governments provided unprecedented energy support payments, but millions of households still suffered from inadequate access to energy. This paper uses gas and electricity smart meter data from 2019 to 20 to 2022–23 for 11,500 prepayment meter (PPM) customers in Great Britain to characterise energy use over time, by dwelling and household characteristics, examine the effects of high prices and cold weather, evaluate current policy and propose improvements. Households with PPMs are a group where fuel poverty is highly concentrated. This sample use less energy than the general population and 63 % self-disconnected at least once a year, with an annual average 28 h of disconnection. Using smart meter data has enabled identification of groups in extreme need: 7 % of households use scarcely any energy, and no gas, for heating; 4 % self-disconnect for at least 240 h per year. More homes self-disconnected from gas during cold periods than at other times, despite the greater need for heating. The paper proposes replacing the current ‘Cold Weather Payment’ policy that has proven ineffective with advance, daily payments directly to energy accounts that are triggered by forecasts of minimum temperatures of −4 °C. High prices in 2022–23 had a very significant effect: annual gas use per household fell by 20 %, while electricity use fell by 3 %, compared with 2019–20. A new Energy Cost Support Scheme is proposed to provide financial support for households in fuel poverty, worth about £1000 per household. For the longer term, smart meter data could enable better targeting of support for vulnerable households and the fuel poor.