UK government’s ECO scheme will benefit few, warns report

Posted at December 17, 2012 » By : » Categories : News » Comments Off on UK government’s ECO scheme will benefit few, warns report

The UK government’s Energy Company Obligation (ECO) scheme, which requires suppliers to help the fuel poor with energy efficiency improvements, will help only a few, warns a report out today.

The report from the Institute for Public Policy Research (IPPR) cautions that the ECO programme, which comes into fore on January 1 complementing the Green Deal scheme, will benefit only a limited number of fuel poor households at a cost borne by all energy bill payers.

The government says that the programme will cost around the same as the current policies it replaces, amounting to around £50 a year in the average annual household bill.

But the IPPR analysis says the government’s estimates could be well out, with the cost to consumers much lower at just £20 a year or potentially much higher at £116 a year.

The report also raises concerns that a lack of capacity and resources at the local authority level could make it difficult for the scheme to reduce carbon emissions at the lowest cost possible, while suppliers could find it difficult to find and engage with fuel-poor households.

In fact, the report warns that the new ECO programme could achieve just 26% of the emissions reductions achieved by current obligations on suppliers and only 40% of the savings possible through implementation of low-cost measures like loft insulation top-ups and cavity wall insulation.

The IPPR calls on the government to undertake an early review of the ECO scheme and support local authority efforts with a £40 million investment.

While the report reiterates government estimates that some 125,000-250,000 households will be taken out of fuel poverty thanks to the scheme, the report puts this figure in the context of the total fuel poor homes in England along, which stand at 2.7 million – 10 to 20 times higher than the ECO target.

The IPPR argues that a broadstroke – ‘low-income, low-efficiency area’ – approach in which energy efficiency measures are given to all households in certain areas would be much more cost-effective.

While the alternative approach would result in some more wealthy households receiving support, the area-wide sweep would reach many more of those in need than current policies.

And according to figures from the Fuel Poverty Advisory Group (FPAG) published in The Guardian newspaper today, 300,000 more homes could fall into fuel poverty this winter as energy prices continue to rise.

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Related stories:
Report accuses UK government of slashing support for fuel poverty (28-Nov)
Energy efficiency is best way to boost UK economy, says Consumer Focus (9-Nov)
UK government ‘blitzes’ local energy efficiency initiatives with £40 million (22-Oct)
UK government defines new way to measure fuel poverty (19-Sept)

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