Beyond the ECO – and beyond

Why three new policies will be better than one

22 July 2015

In a follow up to our frequently downloaded Beyond the ECO report, released last December, we’ve published a short briefing paper outlining how our thinking has developed on what should follow the current Energy Company Obligation (ECO) when it ends in 2017.

As its subtitle suggests, the new briefing paper, entitled ‘Beyond the ECO – and beyond’ (download here) outlines why we need three different policies to replace the ECO and why the next supplier obligation should be nothing like the ECO.

We reiterate our recommendation from Beyond the ECO to introduce a new type of energy saving obligation on energy suppliers – an Average Customer Consumption Reduction Obligation (ACCRO) – requiring them each to reduce the average energy consumption of their domestic customer base year on year. [Update: This idea has been taken up in policy circles under the term 'Demand Reduction Obligations (DRO)'.] Addressing some of the ‘Frequently Asked Questions’ raised by the recommendation, we explain in the new briefing how this approach will significantly reduce policy costs and helpfully align suppliers’ business interests with the success of other key policy objectives, such as the introduction of smart meters.

This new briefing goes further than Beyond the ECO in recommending policies to address the two policy challenges which are addressed (at least in part) by the ECO but which we deliberately excluded from our proposed follow-up obligation, the ACCRO:

  • How to establish an effective, adequately funded programme to improve the energy performance of the homes of the fuel poor
  • How to stimulate the development of the solid wall insulation market in privately-owned homes

Report author and CSE Chief Executive Simon Roberts explains:

“After much engaged response and positive comment for Beyond the ECO, we are confident that our recommended ACCRO approach will have a transformative impact on energy suppliers and energy saving activity that will be good for energy consumers. But we were also aware of gaps left by this approach and this briefing seeks to explain how we think these gaps should be addressed.”

“There’s still plenty of detail to work up, but this briefing represents a start in our thinking which we hope others will find stimulating and useful.”

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