11th June, 2013

The latest ECO brokerage figures show a reduction of up to 60%.

£42 Million of ECO ‘lots’ were traded through the brokerage system during March, whereas only £16.6 Million were traded in April (which is even lower than results in February).

ECO (Energy Company Obligation) brokerage is a fortnightly auction whereby Green Deal Providers can sell their customer’s forecasted carbon and fuel bills savings to energy companies in exchange for the ECO subsidy.

The latest brokerage figures (published on the 21st May) show that funding rates for the ECO strands CERO (Carbon Emission Reduction Obligation) and HHCRO (Home Heating Cost Reduction Obligation) have reduced considerably.

HHCRO rates were down to 19p per £1 of savings (compared with a high of 24p in March), and CERO rates down to £112 per tonne of carbon saving (compared with a high of £125 in March). Interestingly of the 141 lots placed on auction, only 15 met their reserve price and were sold.

Industry representatives have been speculating to why this is happening and some feel that an increase in bilateral agreements between Energy Companies and Green Deal Providers is slowing down the process.

It is likely that most of the major Energy Companies have now built up a framework of Providers who are now filtering ECO projects on a regular basis. Many are expected to be working in partnership with Local Authorities and large social housing providers. With funding rates already predetermined and a steady flow of work, the process for Energy Companies is more manageable and sustainable.

ECO Brokerage on the other hand is a more risky strategy and will fluctuate depending on the market. It appears that Energy Companies have enough bilateral agreements in place to drive down the rates of these biweekly auctions.

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