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

Thomas Longden

Energy Economics, 2025, vol. 148, issue C

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.

Keywords: Temperature-related energy insecurity; Gas; Prepayment for energy; Heating degree threshold; Emergency credit; Disconnection; Energy economics; Extreme temperatures (search for similar items in EconPapers)
JEL-codes: C23 C24 I38 Q41 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325005055

DOI: 10.1016/j.eneco.2025.108678

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