Costing the cold: Connecting fuel poverty & supplier switching in Wellington, New Zealand

Fuel poverty describes the inability of households to afford adequate energy services, such as space heating. In New Zealand, where 25% of households are estimated to be ‘fuel poor’, high electricity prices in a restructured electricity market have an important influence on fuel poverty. However, the ability of the New Zealand Government to regulate these high electricity prices is constrained. Consequently, there is a strong reliance on consumers to switch energy suppliers, which promotes competitive prices and in turn regulates the price of electricity. In contrast to energy efficiency improvements, switching offers fuel poor households a low-cost opportunity to improve the short-term affordability of energy services. Yet, switching is suggested to not benefit fuel poor households who are in most need of affordable energy. This thesis explored the relationship between fuel poverty and supplier switching in Wellington, New Zealand through a geographic lens. First, a new approach to identifying fuel poverty in New Zealand was applied. Using geographic information systems (GIS), a fuel poverty index was calculated to identify fuel poverty in Wellington at meshblock level. Spatial analysis of the index revealed the complexity of identifying fuel poverty and the extent to which the spatial distribution of fuel poverty in Wellington is shaped by the city’s colonial history. The index was then used to identify survey participants through which a survey was conducted exploring Wellington households’ switching behaviours. In a competitive market, consumers are expected to switch according to economically rational behaviours. However, switching behaviours in the survey sample were influenced by factors other than these economically rational behaviours. Integrating the findings of this thesis supports suggestions that switching is not benefiting the fuel poor. Finally, this thesis sheds light on the extent to which an understanding of the geography of fuel poverty can be applied towards improving the effectiveness of policy and equitable outcomes for fuel poor households.