We published the Energy Companies Obligation (ECO): Guidance for Suppliers on 15 March 2013. This document provides guidance to suppliers on the requirements of ECO, as set out in the Order. The date of effect of this Guidance is 1 May 2013. For details on how this applies to the different aspects of the scheme please refer to the Guidance document, which is available here.
What is ECO?
It is the Government’s new domestic energy efficiency programme which has replaced the existing CERT and CESP programmes, both of which come to a close at the end of 2012. ECO works alongside the Green Deal to provide additional support for packages of energy efficiency measures. ECO also provides insulation and heating packages to low income and vulnerable households and insulation measures to low income communities.
ECO creates a legal obligation on energy suppliers to improve the energy efficiency of households through the establishment of three distinct targets:
• the Carbon Emissions Reduction Obligation (20.9 million lifetime tonnes of carbon dioxide). Focusing on hard to treat homes and, in particular, measures that cannot be fully funded through the Green Deal. Solid wall insulation and hard-to-treat cavity wall insulation are the primary measures that the Government intends to be promoted under this target. Other insulation measures and connections to district heating systems are also eligible if they are promoted as part of a package that includes solid wall insulation or hard-to-treat cavity wall insulation.
• the Carbon Saving Community Obligation (6.8 million lifetime tonnes of carbon dioxide). Focusing on the provision of insulation measures and connections to district heating systems to domestic energy users that live within an area of low income. This target has a sub-target, which states that at least 15% of each supplier’s Carbon Saving Community Obligation must be achieved by promoting measures to low income and vulnerable households living in rural areas.
• the Home Heating Cost Reduction Obligation (£4.2bn of lifetime cost savings). Requiring energy suppliers to provide measures which improve the ability of low income and vulnerable households (the ‘Affordable Warmth Group’) to affordably heat their homes. A heating qualifying action is the installation of a measure that will result in a heating saving; including the replacement or repair of a qualifying boiler.
Ofgem’s role
Ofgem will serve as the Administrator for ECO from the commencement of the scheme to 31 March 2015. Each year we allocate qualifying suppliers a proportion of the overall targets; this is determined by a supplier’s share of the gas and electricity supply market. Only suppliers (either single suppliers or suppliers that are part of a group) that have more than 250,000 domestic customers and provide over 400 gigawatts of electricity, or over 2,000 gigawatts of gas, to domestic customers are obligated under the scheme. Suppliers can gain credits towards their obligations for each eligible energy efficient measure they install at a domestic property.
Our other duties include:
• Monitoring supplier progress
• Reporting to the Secretary of State for Energy and Climate Change
• Fraud, audit and compliance
• Final determination on whether a supplier has achieved its obligations
We published the Energy Companies Obligation (ECO): Guidance for Suppliers on 15 March 2013. This document provides guidance to suppliers on the requirements of ECO, as set out in the Order. The date of effect of this Guidance is 1 May 2013. For details on how this applies to the different aspects of the scheme please refer to the Guidance document which can be found on the 'ECO Guidance for Suppliers' page. Domestic consumers and installers who are interested in finding out how to get involved in ECO should visit the 'Information for Domestic Consumers' and 'Information for Installers' pages of this website on the left hand side of this page.
Consultations
Energy Companies Obligation (ECO) 2012-1015: Guidance for Suppliers (Reference Number 156/12) - this consultation has now closed. Please find our response document here. The final Guidance document is available here.
Following the close of this consultation, we have published a consultation response document that sets out how we have taken the views submitted into consideraton when finalising the Guidance document. Our response document is available here.
We have also published our final Guidance document for the scheme. This document provides guidance to suppliers on the requirements of ECO, as set out in the Order. The date of effect of this Guidance is 1 May 2013. For details on how this applies to the different aspects of the scheme please refer to the Guidance document which is available here.
Energy Companies Obligation (ECO): Consultation on the methodologies for calculating (1) number of domestic customers and (2) electricity and gas supply (Reference number 158/12) - this consultation has now closed. Please find our response document here.
If you have any queries regarding the ECO scheme, please contact us at eco@ofgem.gov.uk.