※ The attached PDF is provided in Korean.

Energy crises are making the limits of cash-based energy welfare increasingly clear. South Korea’s energy welfare policy has expanded since the mid-2000s, mainly through energy vouchers designed to ease the burden of energy bills for low-income households. Yet energy poverty is not only a question of whether households can pay their bills. It is also about whether people live in homes that can maintain adequate heating and cooling. When housing is poorly insulated or energy inefficient, bill support alone cannot secure comfort, health or quality of life.

In this issue brief, we trace the United Kingdom’s shift in fuel poverty policy from a focus on the share of household income spent on fuel to a framework centred on housing energy performance. The UK first defined fuel poverty through the ‘10 per cent rule’, then moved through the Low Income High Costs standard and later adopted the Low Income Low Energy Efficiency approach. This shift placed housing quality at the centre of fuel poverty policy, linking welfare support with insulation, clean heating, social housing upgrades and net zero policy. The Warm Homes Plan, announced in January 2026, builds on this trajectory. With £15 billion in public investment, it aims to improve the energy efficiency of up to 5 million homes and lift up to 1 million households out of fuel poverty by 2030. By combining insulation, heat pumps, solar power and batteries, the plan seeks to reduce energy bills, decarbonise buildings, strengthen energy security and support green industrial development.

South Korea needs a similar reframing. Its 2026 energy welfare budget, worth KRW 494 billion, remains heavily concentrated on energy vouchers, while 25.8 per cent of homes nationwide are more than 30 years old. As long as the physical condition of housing remains unchanged, each new energy price shock will require further short-term subsidies. We therefore propose rebalancing energy welfare budgets towards housing energy efficiency, revising the criteria for identifying energy-vulnerable households to include housing performance and regional energy access, and redesigning energy welfare as a joint policy agenda for climate and energy authorities, the Ministry of Land, Infrastructure and Transport, the Ministry of Health and Welfare, and local governments. Energy welfare should no longer stop at emergency bill support for vulnerable groups. It should become a housing decarbonisation strategy that enables all citizens to live in warm, healthy and affordable homes while strengthening South Korea’s resilience to climate and energy shocks.

Author
Boram BAE | Deputy Director | beechtrees38@igt.or.kr