Costs of ECO

30th October, 2013

DECC receives monthly summary information from the seven obligated energy suppliers on their costs associated with delivering the Energy Company Obligation (ECO). The figures quoted below relate to all costs reported by suppliers as at the
end of August 2013

The latest aggregate delivery costs (up to the end of August 2013) are included in Table 1. These are historic costs and future costs may go up or down depending on a range of factors. Projected costs are based on scaling up information from the first eight months of the scheme. These are only indicative of the amount energy suppliers are likely to pass through to customers on their bills to fund their compliance with their share of the obligation. These figures suggest that customers pay an average of around £50 per annum to fund ECO. Projected costs are in line with the central scenario in the DECC Impact Assessment for ECO and with DECC’s estimates of the costs of delivering previous obligations. Provisional figures on
measures installed under ECO are published every month here.

tableecostats

Table 2 shows the average price by obligation and the highest and lowest prices reported by suppliers for each obligation as at the end of August 2013. The suppliers have not been identified to protect commercial confidentiality. This shows that some energy suppliers are discharging their obligation more cost effectively than others. If the highest prices for each ECO obligation are scaled up, the overall scheme would cost around £1.9bn per year – which would mean an extra impact on energy bills of around £25 per year assuming suppliers pass the full costs through to consumers. Scaling up the lowest prices would bring the overall scheme in at around £1.1bn per year – which would mean a reduction in energy bills.

tableecostats2

Source: Gov

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