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Energy Spectrum

Issue 629

Act of settlement: why ECO3 represents a stride forward

Rowan Hazell Analyst

The transitional extension to the second phase of the Energy Company Obligation (ECO2t) concludes in September, and the industry has been awaiting final confirmation from BEIS of what next to expect from the government’s flagship domestic energy efficiency scheme. Following the publication of the outcome of its ECO3 consultation on 19 July, and subsequent laying of the draft Electricity and Gas (Energy Company Obligation) Order 2018 before Parliament, we now have a full picture of the arrangements for the third iteration of the scheme. There are a range of significant changes, including departures from the proposals put forward for consultation in March. In this week’s Energy Perspective, we consider the final proposals and generally applaud the outcome. Affirmation As expected, ECO3 will move to a 100% focus on low-income, vulnerable consumers. This means that it will be based entirely on the Home Heating Cost Reduction Obligation, commonly known as Affordable Warmth. The government noted that the move would reduce the level of carbon savings under the scheme, although the provisional estimate of only 2.1MtCO2 of lifetime savings per year will disappoint some given the commitments in the Clean Growth Strategy to further reduce emissions ...

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