Fuel Poverty in Scotland’s Island Communities: Recommendations for the Revised Fuel Poverty Strategy

This report provides recommendations for the Scottish Government on fuel poverty in Scotland's Island Communities.

Island Fuel Poverty Recommendations.pdf

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Endnotes

[1] Scottish House Condition Survey (2026) Local Authority Tables show that the following fuel and extreme poverty rates, and the fuel poverty gap, respectively for these local authorities: Comhairle nan Eilean Siar – 40%, 27%, £2,160; Orkney Islands Council – 51%, 34%, £2,240; Shetland Islands Council – 40%, 29%, £2,890;  Argyll and Bute Council – 35%, 23%, £15,00; The Highland Council – 31%, 18%, £1620 and North Ayrshire Council – 28%, 16%, £1,030.

[2] The UK Renewable Energy Independence Index shows renewable electricity generated per household per region. Highland Council generates the most renewable electricity per household in the UK. In their 2026 report Clean Power by 2030: A fair deal for Scotland?, the Scottish Affairs Committee note, in reference to the energy transition that “communities across Scotland…are being asked to host significant new energy infrastructure… often in rural and remote Scotland –[and] already feel disproportionately affected by the costs and impacts of the [energy] transition. The higher energy costs and standing charges in Island and other rural and remote communities are well documented in, for example, Changeworks 2026 report A Perfect Storm: 2026 Update on Fuel Poverty in Rural Scotland.

[3] The Scottish Government’s defines a household as being in extreme fuel poverty if more than 20% of its net income (after housing costs) is required to meet reasonable fuel needs, and after those costs are paid, the household does not have enough income left to maintain an acceptable standard of living (defined, post certain adjustments, as at least 90% of the UK Minimum Income Standard).

[4] Scottish Government (2020) The Fuel Poverty (Additional Amount in respect of Remote Rural Area, Remote Small Town and Island Area) (Scotland) Regulations 2020

[5] The Panel have previously set out principles and made recommendations on how funding support could be better targeted and more effective.

[6] Meeting of the Parliament: recent/publication | Scottish Parliament Website

[7] Scottish Government (2026) Energy Efficiency Standard for Social Housing post 2020: interim guidance for social landlords – gov.scot

[8] The Panel has previously noted the case for regional variation in the context of the UK Government Warm Home Discount Scheme in the context of unregulated fuels.

[9] In 2024 ClimateXChange research outlined the potential for lower prices with a move to locational marginal pricing and the associated risks.

[10] The Panel recognises that the UK Government has recently set out measures to break the link between gas and electricity prices, which should lead to a reduction in the cost of electricity.

[11]  Miatta Fahnbulleh MP replaced Ed Millband as Secretary of State for Energy Security and Net Zero on 20 July 2026.

[12] The Q1 2026 Smart Meters Statistics Report UK Government statistics on smart meter coverage show that, as at March 2026, the Western Isles had 46% coverage, Orkney – 57%,  Shetland – 59%, Argyll and Bute  54%, Highland 60%, and North Ayrshire had 72% coverage. This contrasts with the national average of 71% in Scotland and 75% in England. The Panel believe there are still in the region of 35,000 RTS meters which need to be replaced in Scotland. Consumer Scotland (2026) has also recently commented on the consumer risk of the slower smart meter roll out in Scotland.

[13] The Flexible Fuel and Food Fund in Argyll and Bute has  supported more than 4,000 households, delivering over £6 million through welfare rights, income maximisation and fuel poverty interventions to vulnerable families and individuals.

[14] UK Energy Research Centre ( 2025) Transmission Network Unavailability – the Quiet Driving Force Behind Rising Curtailment Costs in Great Britain.

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