Ofgem, the administrator of the Energy Company Obligation, published ECO4 Guidance: New Measures and Products V1.1 on 22 June 20231. The document sets out how the regulator will administer applications and measures notified under the New Measures and Products (NMAP) routes on ECO4, which the guidance says are provided for by the 2022 Energy Company Obligation Order1.
The guidance covers three routes: standard alternative methodologies (SAM), data light measures (DLM) and innovation measures (IM)1. It states that participation under NMAP is optional, with energy suppliers not obligated to deliver under these routes1. Only obligated suppliers can apply under an NMAP route, and applications via multiple NMAP routes will not be allowed in tandem1. Measures can be installed in eligible premises after the date on which the SAM or DLM application is approved1.
On the innovation measures route, the guidance sets out that either a 25% or 45% uplift can be awarded, and that measures delivered under this route are capped at 10% of a supplier's total obligation1. There is also a 5% sub-cap for any single IM, with the applicant receiving an additional 5% uplift1. Under ECO4 there is no specific SAM measures cap, while each specific DLM type description is capped at 1,250 qualifying actions per annum across the whole scheme1. A successful application will result in a new measure type and partial project score being created1.
The guidance describes a route for awarding a new measure type for technologies deliverable under Publicly Available Specification (PAS) 2030:2019 or the Microgeneration Certification Scheme (MCS), not currently recognised in the Standard Assessment Procedure (SAP) nor deliverable under an existing standard measure type1. Applications must be for a technology certified, by an organisation accredited to ISO/IEC 17065:2012, as conforming to a standard that includes provisions designed to ensure the safety and efficacy of the measure on its installation1. District heating connection measures are eligible to apply for an alternative methodology where SAP does not provide an appropriate calculation method1.
On process, Ofgem says it will respond within 10 working days to confirm receipt of an application, applicants will have up to six weeks to provide any additional information, and the regulator will aim to inform the applicant of the outcome and next steps within 10 working days1.
"The Energy Company Obligation (ECO), first introduced in 2013, is an energy efficiency scheme for Great Britain (GB) focusing on supporting low-income, vulnerable, and fuel poor households, through delivering energy efficiency measures."
Why it matters for households
ECO4 is aimed at low-income, vulnerable and fuel poor households, and the guidance states that ECO aims to reduce carbon emissions, promote innovation, maintain security of energy supply, and reduce fuel poverty1. The NMAP routes are the mechanism by which technologies that are not yet recognised in SAP can enter the scheme, so what Ofgem approves here determines which measures can be installed in homes and scored under ECO41. Because participation is optional and only obligated suppliers can apply, the range of new measures actually delivered depends on suppliers choosing to use these routes1. The guidance also references a comfort condition of heating domestic premises to 21 degrees Celsius in the main living areas and 18 degrees Celsius in all other areas1. The document is additional to the ECO4 Guidance: Supplier Administration and ECO4 Guidance: Delivery, and should be read alongside them1. Ofgem is the ECO administrator1; its wider role is set out in our guide to what the energy regulator does.
What happens next
The guidance sets out application timelines rather than fixed dates: acknowledgement of receipt within 10 working days, up to six weeks for applicants to supply additional information, and an aim to inform applicants of the outcome and next steps within 10 working days1. No further dated steps are given in the document.
Sources1 cited
- ECO4 Guidance_New Measures and Products_V1.1, ofgem.gov.uk