Research: Electricity and Gas (Energy Company Obligation) Order 2023: RPC Opinion (Green-rated)

Regulatory Policy Committee

July 18
11:07 2023


The Energy Company Obligation (ECO) scheme was launched in 2013 and requires energy suppliers to deliver a target of notional annual bill savings by installing energy efficiency and heating measures to selected, or targeted, homes. The policy is intended to drive uptake of energy efficiency measures among low income and vulnerable households in, or at risk of, fuel poverty. The existing ECO scheme (ECO4) was introduced in April 2022 and runs through to 31 March 2026. The 2023 order places an additional obligation on larger energy suppliers to deliver energy efficiency improvements to households. This scheme will last for three years from April 2023, running alongside the last three years of the existing ECO4 measure.

The RPC considers that the assessment of direct impacts on business and the impacts on small and microbusinesses is sufficient, and the IA fit for purpose; green-rated. The EANDCB figure has been calculated in line with RPC guidance. The Department has provided a good overall cost benefit analysis and a strong monitoring and evaluation plan. There are some areas for improvement, in particular around assessment of impacts on private renters and assumptions about households and landlords meeting re-installation costs.

Published 18 July 2023

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