Winter demand falls as fuel bills rise: understanding the energy impacts of the cost-of-living crisis on British households

Ellen Zapata-Webborn, Clare Hanmer, Tadj Oreszczyn, Gesche Huebner, Eoghan McKenna, Jessica Few, Martin Pullinger, Simon Elam, Callum Cheshire, Dominic Friel, Harry Masters and Alex Whittaker

Abstract

In October 2022 British households entered a heating season amidst a cost-of-living crisis and exceptionally high electricity and gas prices, squeezing household incomes and increasing rates of fuel poverty. This study analyses electricity and gas consumption in 5594 households from October 2022 – March 2023 using XGBoost counterfactual models trained on the same period in the previous winter. With survey data collected in early 2023 we investigate how consumption reduction correlates with energy-saving actions, household and dwelling characteristics, and indicators of underheating and fuel poverty.Our analysis showed that on average electricity consumption was 8.4% lower and gas consumption 10.8% lower than the previous winter (accounting for weather), saving consumers around £29/month. Despite this and a government subsidy, energy bills were still around £34/month higher than the previous winter (£158/month (median); £500/month (95th percentile)); price elasticity was -0.10 for electricity and -0.07 for gas consumption. Those in the top 20% of consumption reducers reported making much bigger changes to their heating practices, in particular heating homes for fewer hours than before and turning their thermostat down lower. We find evidence of greater fuel poverty and underheating among the greatest energy reducers, with implications for policy to better support the most vulnerable.

Banner photo credit: Alireza Attari on Unsplash