The Electricity and Gas (Energy Company Obligation) Order 2022 is a legal regulation that establishes the fourth Energy Compliance Obligation scheme (ECO4), which will run until 31st March 2026.
The purpose of the scheme is to promote measures for reducing the cost to individuals of heating their homes.
The scheme applies to large energy suppliers with more than 200,000 domestic customers. These suppliers are required to meet a home-heating cost reduction target by delivering energy efficiency measures to low-income and vulnerable households. The scheme also includes a carbon emissions reduction target and an innovation obligation to support the development of new technologies and approaches.
The evidence requirements of The Electricity and Gas (Energy Company Obligation)Order 2022 are the rules and procedures that energy suppliers must follow to prove that they have delivered energy efficiency measures to eligible households. The evidence requirements include:
· Submitting data on each measure to the ECO Register, which is managed by Ofgem.
· Providing supporting documents such as declarations, invoices, certificates, surveys, etc. to Ofgem upon request.
· Complying with technical standards such as PAS 2035, PAS 2030 and MCS for the installation and quality assurance of measures.
· Using approved methodologies for calculating the carbon emissions savings and cost savings of measures, such as SAP, RdSAP and Deemed Scores.
· Following specific rules for different types of measures, such as solid wall insulation, district heating systems, renewable heating systems, etc.
· Meeting additional requirements for innovation measures, such as demonstration actions, innovation score uplifts and in-situ performance monitoring.
The Electricity and Gas (Energy Company Obligation) Order 2022 (legislation.gov.uk)
The exemptions to The Electricity and Gas (Energy Company Obligation) Order 2022 are the situations where energy suppliers are not required to comply with some or all of the obligations under the scheme. The exemptions include:
· Carry-over of ECO3 measures: Energy suppliers can count up to 10% of their ECO3 delivery towards their ECO4 obligations, subject to some measure exclusions.
· Interim delivery of ECO3 measures: Energy suppliers can continue to deliver ECO3 measures to ECO3 rules, subject to some measure exclusions, between 1 April 2022 and 30 June 2022.
· Early delivery of ECO4 measures: Energy suppliers can deliver ECO4 measures during any gap between ECO regulations, before the ECO4 scheme starts.
· Small supplier exemption: Energy suppliers with less than 200,000 domestic customers are exempt from the scheme, unless they choose to opt in.
· Rural sub-obligation exemption: Energy suppliers with less than 250,000 domestic customers are exempt from the rural sub-obligation, which requires them to deliver at least 15% of their home-heating cost reduction obligation to rural areas.
· Hardship exemption: Energy suppliers can apply for an exemption from their obligations if they are facing financial difficulties or insolvency, subject to Ofgem’s approval.
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