Government ends ECO extension delay

The government is bringing forward the legislation for the next phase of the Energy Company Obligation (ECO) scheme, more than three months after it was due to be introduced.

The industry-funded ECO4 scheme, which will provide around £1 billion worth of energy efficiency and heat upgrades for fuel poor households, was originally due to run from April this year until 2026.

However, the government announced earlier this year that this timetable had slipped.

The Parliamentary diary shows that time has been allotted on Tuesday (11 July) for an order extending the obligation on licensed electricity and gas suppliers, which will be introduced by Lord Callanan, a junior minister at the Department for Business, Energy and Industrial Strategy.

An explanatory memorandum, outlining the order, said many retailers will not enter “at scale” into contracts to deliver their obligations until the regulations outlined in the order are in place.

The latest phase of the ECO scheme is due to focus assistance more tightly on low-income householders living in properties with an energy performance certificate in Bands D to G.

It will also allow councils to identify up to half of households in their locality to ensure help with energy efficiency and low-carbon heating measures are available for low-income households not receiving benefits.

The introduction of the ECO extension follows mounting pressure on the government to ensure that the measure was in place before the beginning of Parliament’s six-week summer recess on 21 July.

If the legislation had not been introduced until after recess in September, the Energy and Climate Intelligence Unit recently estimated that up to 56,250 households could miss out on energy efficiency improvements funded by the scheme.

And CBI director-general Tony Danker used his keynote speech at the business body’s Net Zero conference last month to urge the government to extend the scheme before the summer break.

Boris Johnson was also reported to be examining a further extension of the ECO scheme, which would use taxpayer funding to subsidise middle income homeowners’ energy efficiency schemes, prior to last week’s announcement that he is stepping down as prime minister.