Energy companies need post-Eco2 clarity, says insulation body

The National Insulation Association (NIA) is calling on the government to make a “quick decision” to give energy companies clarity about the future of Energy Company Obligation (Eco) after it ends in 2017.

The NIA has made the call after identifying a potential funding gap for energy efficiency measures by energy companies already being “well advanced” in fulfilling their commitments under the current scheme, without a similar scheme lined up to replace it.

NIA chief executive Neil Marshall exclusively told Utility Week that the lack of Eco2 replacement when the scheme ends in March 2017 is resulting in “no incentive” for energy companies to continue providing measures without knowing they will count in the next obligation period.

Marshall said the NIA has urged energy ministers to make “quick decisions” on the scheme’s future as currently “prospects for householders are looking very grim indeed.”

“Energy companies need urgent clarity and confirmation on what’s going to happen to the obligation post 2017 because that will give confidence to keep providing measures.”

Marshall said the NIA has contacted the Department of Energy and Climate Change about the issue, and that ministers are aware of the potential funding gap.

The association says that if the fulfilment rate achieved during 2014 continues the scheme will be finished in Q1 2016, leaving a 12 month funding hiatus until the March 2017 deadline, although one measure may be fulfilled as early as June or July this year.

Marshall said: “This is very bad news for the industry but also more importantly for vulnerable householders who could be going throughout the winter of 2016 without any help.”

Marshall said that rather than the gap being caused by energy companies fulfilling the measures early, it is predominantly the result of the combination of “significant” Eco target cuts in 2013 and carry-over from over performance by suppliers during the last Eco obligation period.

NIA board member Walter French said the combination of these has already fulfilled 25 per cent of the Eco2 obligation.
The NIA is also calling for more continuity through extending the scheme to five years, or by ensuring an overlap between future schemes.

However French disagreed with Citizens Advice’s recent calls for fuel poverty measures to be given to councils saying: “You would need a whole new bureaucracy, you would need to change primarily legislation, and there is no money available.”

Marshall agreed saying: “What should happen is government work with industry, consumer groups and local authorities to agree the most effective delivery models. Rather than the government saying this is what we are going to do, now you go away and deliver it.”