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ECO, the Energy Company Obligation

Published Monday, December 14, 2015

This Commons Briefing paper sets out the details of the Government’s Energy Company Obligation scheme that provides funding for energy efficiency measures for difficult to treat homes and the homes of ‘those most in need.’

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ECO, the Energy Company Obligation

This Commons Briefing paper sets out the details of the Government’s Energy Company Obligation scheme that provides funding for energy efficiency measures for difficult to treat homes and the homes of ‘those most in need.’

Main elements of ECO

The Energy Company Obligation (ECO) provides funding to improve energy efficiency in difficult to treat housing and the homes of ‘those most in need’. The obligation took over from the former energy supplier obligations (Carbon Emissions Reduction Target (CERT) and Community Energy Savings Programme (CESP) both of which ended in 2012.  It originally ran alongside the Green Deal (now ended) which provided loans for energy saving improvements.

ECO started on 1 January 2013 for Great Britain.  ECO has three elements, “Affordable Warmth”, the “Carbon Saving Obligation” and the “Carbon Saving Communities Obligation”. 

Extension of ECO to March 2017

In the Autumn Statement 2013  in December 2013, the Coalition Government announced that it would extend the time scale for the ECO by 2 years to March 2017 and reduce the annual costs in consumer energy bills, estimated to be by £50 including the cost of other measures. The implementing legalisation came into force on 4 December 2014.

Beyond March 2017

In the Spending review and Autumn statement 2015 on 25 November 2015, the Government announced that it would bring forward proposals aimed at reducing the projected cost of green policies on the average annual household energy bill by £30 from 2017. The bulk of these savings will come from reforms to the current Energy Company Obligation (ECO) scheme. This will be replaced from April 2017 with a new cheaper domestic energy efficiency supplier obligation which will run for 5 years [until 2022].  The Government is planning to consult on the changes early in 2016.

Evaluations of ECO

We summarise evaluations of the ECO scheme that have been published by the Energy and Climate Change Committee as part of their inquiry into Home energy efficiency and demand reduction.

 

Devolved Administrations

Finally we set out the variations of the ECO scheme that are undertaken by the three Devolved Administrations including the impact of the Scotland Bill 2015-16 .

 

Commons Briefing papers SN06814

Authors: David Hough; Rob Page; Edward White

Topics: Consumers, Energy, Energy conservation, Fuel poverty, Regulation

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