Defining energy hardship
The Ministry of Business, Innovation, and Employment (MBIE) has developed a definition of energy hardship and is developing measures to track energy hardship over time.
For some New Zealanders, accessing enough energy in their homes while also staying on top of their bills is a challenge. There are a wide range of factors that can affect the energy situation of households and contribute to them living in energy hardship. Despite this New Zealand has lacked a nationally accepted definition or method of measuring energy hardship.
MBIE consulted on a proposed definition and suite of measures for energy hardship at the end of 2021. More information on these proposed definition and measures, as well as submissions received from stakeholders, can be viewed on the consultation page.
This work is based on one of the Electricity Price Review’s recommendations to government to support efforts aimed at alleviating energy hardship. The Energy Hardship webpage has information on other related initiatives that were developed in response to the Review’s recommendations.
A definition of energy wellbeing for Aotearoa
The Electricity Price Review recommended that MBIE develop a definition of energy hardship. With the government’s focus on promoting the wellbeing of all New Zealanders, MBIE has developed a definition of energy wellbeing.
Energy wellbeing is defined as when individuals, households and whānau are able to obtain and afford adequate energy services to support their wellbeing in their home or kāinga.
Each component of this definition is explained in the coloured boxes in the below illustration.
Energy wellbeing definition and explanation
Energy hardship and energy wellbeing
Energy hardship is the opposite of energy wellbeing. That is, it is the situation when individuals, households and whānau are not able to obtain and afford adequate energy services to support their wellbeing in their home or kāinga.
An energy wellbeing framework
Alongside this definition, MBIE has developed a framework of energy wellbeing.
This demonstrates the different factors that can interact and affect energy wellbeing or hardship. It helps identify the underlying drivers of a household’s energy situation, which can then be used to develop or focus initiatives aimed at reducing energy hardship. This framework is shown in the below diagram.
Conceptual framework for energy wellbeing
People and their dwellings are at the centre of the framework, surrounded by the factors that can affect their energy wellbeing. Factors can interact with each other in a number of ways so individual households may have different experiences of energy hardship.
A description of the components of this framework is available in the following document.
This framework is a flexible, living document and as a result it may evolve time as further research, analysis, and engagement is undertaken to deepen our understanding of energy hardship in New Zealand.
Based on feedback received during the consultation on a proposed definition and measures, MBIE is continuing to work on its suite of indicators based on feedback and expects these to be released in the coming months.