Ofgem, the administrator of the Energy Company Obligation, published draft guidance on the New Measures and Products routes under ECO4 on 4 July 20221. The document sets out how the regulator proposes to administer applications and measures notified under those routes, and the consultation on it closes on 18 July 20221.
The Energy Company Obligation, first introduced in 2013, is an energy efficiency scheme for Great Britain that focuses on supporting low-income, vulnerable and fuel poor households through the delivery of energy efficiency measures1. Under ECO4, three New Measures and Products routes sit alongside the standard scheme: standard alternative methodologies (SAM), data light measures (DLM) and innovation measures (IM)1. Participation is optional, with energy suppliers not obligated to deliver under these routes1.
The routes differ in what they cover and what they require. SAM is a route for awarding a new measure type for technologies deliverable under PAS 2030:2019 or the Microgeneration Certification Scheme that are not currently recognised in the Standard Assessment Procedure, and a successful application results in a new measure type and partial project score1. DLM requires less extensive evidence to support space heating cost savings than SAM, and applications must be for a technology certified by a party accredited to ISO/IEC 17065:20121. Each DLM is capped at 1,250 qualifying actions per annum under any specific DLM type description1. Innovation measures award an uplift to measures that demonstrate an improvement over comparable measures already deliverable under ECO, with either a 25% or 45% uplift available, and applications must include the specific products the applicant intends to promote as IMs1. The total delivery of IMs cannot exceed 10% of a supplier's total obligation1.
District heating connections are eligible to apply for an alternative methodology where SAP or RdSAP does not provide an appropriate calculation method, but DHC measures cannot apply via the DLM route1. Only suppliers can make an application under an NMAP route1. The guidance applies to all measures notified under these routes, other than ECO3 interim delivery measures, installed from 1 April 20221.
"This draft for comment guidance allows stakeholders to review the proposed changes"
Why it matters for households
The routes are the mechanism by which technologies that fall outside the Standard Assessment Procedure can be delivered and scored under ECO4, so what Ofgem accepts, and on what evidence, shapes which measures can be installed in a home and how much of a supplier's obligation they count towards. The caps matter for availability: each DLM type is limited to 1,250 qualifying actions a year, and innovation measures are limited to 10% of a supplier's total obligation, so the volume of any given new measure that can be delivered is bounded. Because participation is optional and only suppliers can apply, a household cannot itself seek approval for a technology; whether a product becomes deliverable depends on a supplier choosing to apply. The guidance applies to measures installed from 1 April 2022, so it covers installations already made as well as future ones.
What happens next
The consultation closes on 18 July 2022, and stakeholders should ensure responses are submitted in advance of that date1. Ofgem describes the document as a live document to be used as guidance until the final version 1.0 is published1.
Sources1 cited
- ECO4 Guidance: New Measures and Products, ofgem.gov.uk