Temperature-related energy insecurity and heating degree thresholds for prepayment gas customers in England and Wales

Abstract

Extreme temperatures can be dangerous when increased energy use for heating or cooling leads to household energy insecurity events, such as de-energisation or self-rationing. Prepayment (or pay-as-you-go) for electricity and/or gas is used in over 30 countries, but few studies quantify the actual incidence and rate of temperature-related energy disconnections. This study uses smart-meter data for over 600,000 prepayment gas customers in England and Wales across more than 7 winters to understand how cold weather impacts credit top up behaviour, emergency credit borrowing, and running out of credit, which leads to self-disconnection. The impact of cold temperatures on credit top-ups is greatest below heating degree thresholds of −3.8 °C, −5.6 °C and − 5.1 °C for those living in regions with high fuel poverty, North England and Yorkshire, and regions with low wages, respectively. For self-disconnection events, similar thresholds are found. High rates of temperature-related self-disconnection also occur in regions with high claimants of unemployment related benefits. An analysis of credit top-up amounts shows that most top ups are £20 or less but for cold events below −6 °C there is a significant increase in top-ups above £20. People also anticipate cold events with minimum temperatures below −3 °C and − 5 °C but do not react in the same way to the metric used to trigger the Cold Weather Payment. Revising the Cold Weather Payment with a daily minimum temperature trigger may help people anticipate payment and avoid self-rationing.