The United Kingdom is one of the Europe countries that have introduced an obligation to reduce energy use (called a white certificate). It was even the first Member State to do so. In fact, it launched a number of mandatory energy-saving programmes in 1994. The most recent is the Energy Company Obligation (ECO), which requires energy suppliers to promote energy improvements in low-income households and vulnerable areas.
ECO is a government programme that targets household consumption. It has two objectives:
- to fight fuel poverty.
- to reduce carbon emissions.
Unlike other white certificates, it has several phases: ECO, ECO1, ECO2, ECO3 and ECO4. The ECO4 is the latest to be introduced, and it applies to measures introduced between1 April 2022 and 31 March 2026.
How does the UK white certificate work?
The ECO currently in force in the UK was introduced in 2022. It comprises 3 phases, each lasting 3 years, and imposes an obligation to reduce domestic heating costs on electricity and gas suppliers with more than 50,000 customers. These suppliers are known as the “obligated parties”, and they must also promote measures to improve the heating of their homes for low-income households. Examples include:
- improving the thermal insulation of a property (e.g. loft insulation, cavity wall insulation);
- replacing a heating system with a new model;
- repairing a boiler.
The programme also includes a general energy savings goal that is set by the Department of Environment, Food and Rural Affairs (DEFRA). Then, it is distributed between the “obligated parties” according to their relative share of the UK gas and electricity markets. It is then the responsibility of the Office of Gas and Electricity Markets (OFGEM) to ensure that each obligated party applies and complies with this goal.
Who is concerned by this energy efficiency scheme?
The ECO targets low-income households to help them implement energy efficiency solutions in their homes. Both tenants and homeowners are eligible. The help comes from energy, gas and electricity suppliers, the “obligated parties”. They must comply with the targets fixed by OFGEM (Office of Gas and Electricity Markets). OFGEM also checks that they are fulfilling their obligations. As administrator of this programme, it has a number of roles, including :
- allocate goals to “obligated parties” ;
- monitor their actions to achieve these goals;
- prevent and detect fraud.
The UK White Certificate therefore concerns the residential (or domestic) sector and seeks to combat fuel poverty. It focuses above all on reducing CO2 emissions, which is the objective of UK energy policy.
Also, unlike the French and Italian programmes, ECOs are only issued to “obligated parties”. The UK has not yet developed a system of penalties for suppliers who do not fulfil their obligations. Penalties are applied on a case-by-case basis.
