Energy Company Obligation (ECO)
The Energy Company Obligation (ECO) is intended to work alongside the Green Deal to provide additional support in the domestic sector, with a particular focus on vulnerable consumer groups and hard-to-treat homes.
ECO was introduced in January 2013 and is being funded and delivered by larger energy suppliers across Great Britain. It is administered by Ofgem. ECO is worth around £1.3 billion every year.
Through ECO, energy suppliers must improve the energy efficiency of households through the establishment of three distinct targets:
- Carbon Emissions Reduction Obligation (CERO)
Focusing on hard to treat homes and, in particular, measures that cannot be fully funded through the Green Deal.
- Carbon Saving Community Obligation (CSCO)
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. A minimum of 15% of all activity within the CSCO will be delivered within rural areas.
- Home Heating Cost Reduction Obligation (HHCRO) (Affordable Warmth)
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.
DECC carried out a consultation on proposals to change the Energy Company Obligation. Key proposals included the extension of the scheme from 2015 to 2017, modifying the eligibility criteria for CSCO and allowable primary measures under CERO. For Energy Action Scotland’s response to that consultation, please see here
The new obligation period, known as ECO 2, launched on 1 April 2015 and will run until 31 March 2017.
For statistics on ECO, please see the UK Government (DECC) Green Deal and Energy Company Obligation (ECO) statistics page
For Further Information
ECO website - Ofgem
ECO website - Department of Energy and Climate Change (DECC)