Changes to the Energy Company Obligation
A supplier’s view
Nigel Dewbery Head of Obligation Delivery
CAN Training Day 7th October 2014
Contents
1) Timeline
2) HHCRO Positives and negative impacts
3) CSCO Positives and negative impacts
4) CSCO Rural Positives and negative impacts
5) CERO Positives and negative impacts
6) Green Deal changes & impacts
7) Summary
8) Contacts
2
DECC Timetable
1) Autumn Statement
Dec 2013
DONE
2) Public Consultation release
Mid Feb 2014
DONE
3) Public Consultation closes
Mid April 2014
DONE
4) Drafting of new SI
April-June 2014
DONE
5) New SI before House
B4 20th July 2014
DONE
1) Legislation debate &outcome October 2014
In Progress?
 Some changes will be back dated to 1st April 2014, and the supply
chain is actively working and delivering against the new proposals.
3
Positives and Negatives -HHCRO
Positive Impacts
Negative Impacts
- Extension until March 2017
- introduction of deflator, direct
additional cost.
- Guidance on Customer
Contribution
- Introduction of installation
warranty with costs offset by
target reduction
- Uplift for non gas area measures
(although insufficient)
- Maintaining “Hard” 2015 target
4
- Extension target worked on 2.25yr
ECO1 period not 2.5yr
Positives and Negatives –CSCO/CSCO Rural
Positive Impacts
Negative Impacts
- Extension until March 2017
--Limitation on application of excess actions to
CSCO Rural
- Increase of IMD areas to lowest 25%
- Maintaining “Hard” 2015 targets
- New eligibility by postcode permitted for
Rural
- Non mandating of Brokerage use
5
- Extension target worked on 2.25yr ECO1
period not 2.5yr
Positives and Negatives -CERO
Positive Impacts
Negative Impacts
- Extension until March 2017
- Levelisation metrics not reflective of true
market conditions
- Introduction of CWI, LI and DH as primary
measures
- Removal of HTT CWI definition which will
remove administration
-Extension target worked on 2.25yr ECO1
period not 2.5yr
- Total reduction applied to phase 3 (last year)
of ECO1.
- “Soft” 2015 target introduced
6
Positives and Negatives –SWI Minima
7
Positive Impacts
Negative Impacts
- Calculated as a tCO2 target
- Use of average of 40tCO2 per property higher
than actual average.
Overall cost impacts to Suppliers
Area
Change
HHCRO
Introduce Deflator
HHCRO
Introduce Upside off gas
HHCRO
Warranty costs
CSCO
IMD areas
CSCOR
Postcode areas
CSCOR
Excess actions
CERO
Target reduction
CERO
Levelisation metrics
CERO
Primary Measures
CERO
Admin on HTT CWI
Extension based on 2.25
years
All
SWI Minima
CERO (for small
suppliers only?
Spend
Based on "high" average
Phase 3 reduction
Overall savings were not as large as originally predicted
8
What next?
Now looking for project partners particularly against
1) CSCO Rural
2) SWI Minima
3) District heating
For delivery by E.ON until 2016
9
Green Deal Changes - Incentives
 Range of offers being announced to drive GD take-up
1) £1000 for 2 measures
2) Up to £6000 for SWI
3) £100 refund on GDAR
4) £500 for homemovers
 Cannot be used with ECO
 Limit on “state aid spending”
 For EON, customers will be
offered the best deal (ECO or GD)
 Challenge = complexity and confusion
10
E.ON Green Deal Community Activity
 E.ON active in Green Deal Communities Areas
 Harringay
 Peterborough
 Worcester
 Nuneaton
 Still have capacity to undertake SWI delivery for GD Communities
11
EOTR Vans - Communities & Green Deal focus
12
E.ON – our intent and actions through the changes
We simply have had to reduce costs in line with the political intent.
1) Fully complete all obligations and sub-obligations on time (On Target)
2) Deliver at as low a cost as is practical in order to reduce pass-through to
E.ON supply customers
3) Renegotiated all existing contracts (incl. timeframe, volume and measure
type) to fit into new world.
4) Provide as much continuity and security to partners and installers as
possible
5) Secure longer-term, pan-community funding projects
6) Provide customers with best options for them (within compliance
constraints)
7) Working with proactive partners
13
Contact Us
HHCRO
Tina Cowley
07891 291641
Tina.Cowley@eonenergy.com
CERO/CSCO
Lisa Sims
07736 617946
Lisa.Sims@eonenergy.com
Steve Lauri (workshop later)
07525 240968
Steve.Lauri@eonenergy.com
Head of Obligation Delivery
Nigel Dewbery
07595 125199
Nigel.Dewbery@eonenergy.com
14
Crispin Jones
07794 080427
Crispin.Jones@eonenergy.com
Jon Kirby
07872 032562
Jon.Kirby@eonenergy.com
Phil Dawson (workshop later)
07740 095491
Phillip.Dawson@eonenergy.com