ECO3 Innovation

Guidance

Publication date

Industry sector

Supply and Retail Market

Scheme name

ECO

Under ECO3, energy suppliers are able to deliver up to 10% of their obligation through the installation of innovative measures to eligible households. There are two innovation routes under the scheme:

  • Demonstration actions – measures that have previously been tested in a laboratory setting and now require testing at scale in a live environment, or are marketable products that are being sold in the market and may need additional support.
  • Innovation measures – a measure that is different from those previously delivered under supplier energy efficiency obligations by having, for example, an improved material that can demonstrate improved energy efficiency performance, or an improved installation technique.

These routes are optional and energy suppliers do not have to deliver measures under them. However, to encourage participation by obligated suppliers, and to deliver new and improved measures into the scheme, a Lifetime Bill Saving score (for demonstration actions) or a deemed score uplift (for innovation measures) will be awarded to measures that are delivered under these routes.

In addition to innovation, suppliers will be able to use a new monitored measures route to deliver up to 10% of their obligation. This is also voluntary and is intended to allow suppliers the opportunity to use modern monitoring technology to measure the actual energy efficiency performance of homes that have received energy efficiency measures over time. Suppliers who use the monitored measures route will receive a score uplift if the measures that are being monitored are proven to deliver more savings than that assumed by the standard deemed score.

We have written guidance to assist interested parties in delivering measures under these three routes. This can be found below, alongside the three application forms for each of the innovation routes. Approved innovation measure descriptions and monitored measure scoring methodologies are also published below.

Please note that only obligated suppliers can submit an innovation application to Ofgem.

A technical advisory panel (TAP) has been set up to review applications made under each route and make recommendations to Ofgem to approve or reject applications. Minutes of TAP meetings are also published here. The TAP meeting dates for 2019/20/21 are as follows:

  • 3 April 2019 - Minutes available
  • 15 and 31 July 2019 - Minutes available
  • 7 and 17 October 2019 - Minutes available
  • 13 January 2020 - Minutes available
  • 10 March 2020 - Minutes available
  • 12 May 2020 - Minutes available
  • 14 July 2020 - Minutes available
  • 8 September 2020 - Minutes available
  • 11 November 2020 (additional meeting) - Minutes available
  • 24 November 2020 - Minutes available
  • 16 March 2021 - Minutes available 
  • 19 August 2021 - Submission deadline 7 July 2021
  • 11 November 2021 - Submission deadline 30 September 2021
  • 10 March 2022 - Submission deadline 27 January 2022

Please note that the submission deadlines for the remaining TAP meetings have been extended from 20 working dates in advance of the TAP metting to 30 working days. This extension is intended to allow suppliers more time to address any initial clarifications and reduce the number of clarifications required following the TAP meeting.

Before progressing an application under one of the innovation routes, interested parties should first assess whether the measures they are proposing have already been delivered under the scheme, as only measures which are materially different can be supported. They should consult our public reports to understand what has already been installed under ECO. They should also assess whether it is the most suitable route to deliver the new or improved measure under the scheme. Suppliers can still make an alternative methodology application to apply for a new scoring methodology. We recommend that interested parties consult the decision tree below to determine what type of application may be suitable for the measures in question.

ECO3 Guidance: Innovation updated February 2020

Version 1.1 of this guidance includes clarifications and updates to the previous version, as well as changes resulting from the ECO3 (Amendment) Order. Details of changes can be found in the summary of updates to the guidance document below.

As part of this update, we have also published a tool to help determine sample size for the performance monitoring of demonstration actions. This tool has been developed by the TAP to assist with the assessment of applications. It is intended as a guide only, and does not consider all of the factors which can influence required sample size. Suitable justification of sample size should be provided in the application.

Draft guidance for notifying demonstration actions published July 2020

In addition to the ECO3 Guidance: Innovation, we have published guidance on notification requirements for completed demonstration actions. This guidance is aimed at suppliers who are delivering, or aim to deliver, a demonstration action. Its primary aim is to provide information on what is required to notify a completed demonstration action, with specific guidance for each part of the notification ‘pack’.

As part of this guidance, we have also published a document containing templates to be completed and submitted as part of the notification of a demonstration action. These should be used in conjunction with the ECO3 Guidance: Notification of demonstration actions.

ECO3 Guidance: Notification of Demonstration Actions updated July 2021

Version 1.1 of this document has been updated to add more detail in some areas. The notification templates have also been updated to version 1.1, and should be used in conjunction with the ECO3 Guidance: Notification of demonstration actions.

For a detailed list of the changes made, please refer to the ‘Summary of updates to the ECO3 Guidance: Notification of Demonstration Actions v1.1’.