30 SECOND GUIDE: ECO

Ah, the green agenda.

Quite. ECO in this case stands for the Energy Company Obligation, a flagship government policy introduced in January to make big power firms help householders boost the energy efficiency of their homes.

How does it work?

In theory it cuts carbon emissions and supports people living in fuel poverty by funding energy efficiency improvements worth around £1.3bn every year.

Such as?

Insulation of houses and flats, affordable heating and solid wall or hard-to-treat cavity wall insulation are all included.

What’s the downside? As they are obliged to subsidise households the big energy firms complain it costs too much and is less effective than hoped.

Any examples?

Sam Laidlaw, boss of British Gas owner Centrica, yesterday added to RWE npower’s criticisms. He called for a sit-down with the Government to see if this is the most cost-effective way of reducing carbon emissions. Centrica reckons £1 in every £4 spent on heating bills is wasted due to poor insulation.

So bills could come down

Don’t hold your breath. Where energy is concerned, consumers are usually hardest hit. The ‘Big Six’ providers’ profits keep rising while average dual fuel bills are now more than £1,400 a year.


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