ECO Trading Platform Now Live

2nd January, 2013

The Energy Company Obligation (ECO) trading platform as part of the Green Deal is now live. Energy Minister Greg Barker launched the first brokerage auction which will now operate fortnightly. Green Deal ECO is a commitment from the “big six” energy companies to fund energy efficiency measures under the Green Deal, in hard-to-treat homes and householders on low incomes.

The investment totals £1.3 billion and the Department of Energy and Climate Change (DECC) has said that the brokerage will provide a more open market. DECC also hopes it will broaden competition in the market to enable SMEs to deliver energy efficiency measures and will help Green Deal Providers attract ECO support.

There are three obligations for energy companies under the ECO. These obligations will look to create carbon savings and heating cost reductions:

The Carbon Saving obligation is worth around £760 million a year and will be available for hard-to-treat homes. Measures will include solid wall insulation.
The Carbon Saving communities obligation is worth around £190 million a year and will deliver insulation in areas of low income. 15% of the obligation must be used to treat rural communities, with a population size of under 10,000 residents.
The Affordable Warmth obligation is worth around £350 million per year and will enable the implementation of heating and insulation measures to the poorest and most vulnerable consumers.

ECO providers will be able to sell “lots” of the three different obligations to energy companies in return for ECO subsidy.

Trading can now start under the brokerage and the DECC expects energy companies will respond to the incentives that brokerage offers – low cost ECO compliance delivered by Green Deal Providers such as Green Deal Central. Energy companies will deliver ECO through their own Green Deal delivery arms, through bilateral partnerships and through the brokerage. Only obligated energy suppliers will be able to buy from ECO brokerage and only accredited Green Deal Providers will be able to sell. The brokerage works by allowing Green Deal Providers to offer ECO at a competitive price and energy companies will not be able to see who they are buying from.

Green Deal Installers will not be able to trade in the brokerage and will need to go to a Provider in order to access the ECO funding. Currently trading is restricted to domestic providers however over time the DECC hopes to work with registered social landlords and local authorities.

The next ECO brokerage auction will be January 15, 2013.

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