Policy paper

2010 to 2015 government policy: household energy

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

© Crown copyright 2015

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This publication is available at https://www.gov.uk/government/publications/2010-to-2015-government-policy-household-energy/2010-to-2015-government-policy-household-energy

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/helping-households-to-cut-their-energy-bills. Current policies can be found at the GOV.UK policies list.

Issue

Rising energy prices are affecting many households. The government can’t control unpredictable global energy prices but we can help households keep their energy bills as low as possible, support those most in need and take action to help secure energy supplies in the long term.

Actions

Helping people use less energy

DECC has launched the following initiatives to help increase energy efficiency in households so consumers can save money on their energy bills:

  • Green Deal – lets homes and businesses make energy efficiency improvements with some or all of the cost paid for from the savings on their energy bills

  • Smart meters – a programme to install gas and electricity meters that provide near real-time information on energy use in households and small businesses

  • The Energy Company Obligation (ECO) – a subsidy from energy suppliers that will work alongside the Green Deal to provide energy-saving home improvements for those most in need and for properties that are harder to treat

  • Electricity Demand Reduction project – assesses whether there is sufficient support and incentives to households, businesses and organisations to improve the efficiency of their electricity use

  • Smarter Heating Controls Research Programme - to establish whether ‘smarter’ heating controls reduce domestic energy consumption

  • The Central Heating Fund, an English Local Authority competition to support the installation of first time central heating systems in low income households who do not use mains gas as their primary heating fuel.

The Department for Communities and Local Government (DCLG), supported by DECC, is also working to improve the energy efficiency of buildings.

Helping households get the best deal

Households can save up to £200 per year by switching their energy suppliers. This is why we are pushing energy companies to make switching much easier and quicker.

Recent reforms in the energy market to make it simpler, clearer and fairer have made it easier for consumers to check their existing deal and work out if they’d benefit from a change. It is now even easier to go energy shopping and get a better deal on gas and electricity

The energy regulator Ofgem has a site that goes through everything consumers need to know to lower their energy bills. Find out how to Be An Energy Shopper.

Energy UK have put together this simple animation on how to switch supplier or tariff.

Energy UK have put together this simple animation on how to switch supplier or tariff.

We are also helping consumers find the best deals on their energy tariffs by:

Helping the most vulnerable households

We are making sure the most vulnerable households get direct financial help through:

  • Warm Home Discount - participating energy suppliers help low-income and vulnerable households meet their energy costs

  • Winter Fuel Payment - annual payment of up to £300 for pensioner households

  • Cold Weather Payment - payment during periods of severely cold weather to pensioners who receive pension credit or people on income-related benefits who meet certain criteria

We are also helping vulnerable and fuel poor households through new funding that will deliver across 2015/16 and provide learning for the design and delivery of future support.

  • Fuel Poverty and Health Booster Fund - £1m of funding has been released to 9 English local authorities to scale up existing local health and fuel poverty projects, delivering assistance to some of those most vulnerable to the effects of living in a cold home.

  • Local Fuel Poverty Innovation Funding – we are inviting partners to share ideas for the shape and focus of the next wave of pilot activity which will see up to £2m awarded to support local fuel poverty innovation later in the year. Further information on the role of partnership and learning in the renewed strategic approach to tackling fuel poverty in England.

Big Energy Saving Network

Following the success of the inaugural 2013/14 Big Energy Saving Network, DECC has provided £1m funding to continue the programme into 2014/15. The Big Energy Saving Network delivers an extensive programme of outreach to vulnerable consumers, focussed on helping them reduce their energy costs and energy consumption.

The Network will run through autumn/winter 2014/15, with outreach activity concluding on 13 March 2015. Each Big Energy Saving Network project is led by a specially trained Network ‘Champion’, voluntary workers that will co-ordinate the training of further volunteers and front line workers. These volunteers and frontline workers will in turn deliver proactive advice to consumers on energy issues via an assisted action approach.

Reforming the electricity market

Electricity Market Reform will lower household bills by 5% to 9% (on average) between 2016 and 2030 (compared to continuing with existing policies).

Securing the UK’s energy supply

Our energy and climate change policies are designed to reduce the UK’s sensitivity to spikes in global oil, gas and coal prices.

Read more about what we’re doing to secure the UK’s energy supply.

Background

At the Spending Review in October 2010 we announced we would commission an independent review of fuel poverty in the UK. The final report of the Hills Poverty Review was published in March 2012.

Following consultation, a framework for future action on fuel poverty was published in July 2013 which sets out the way the Government intends to measure fuel poverty going forward and the action the Government intends to take to help people who are fuel poor.

In October 2011 the Department of Energy & Climate Change (DECC) hosted a consumer energy summit that brought together consumer groups, energy suppliers and the Office of the Gas and Electricity Markets (Ofgem) to discuss a joint effort to support consumers. One of the actions agreed at the summit was for Citizens Advice to organise Big Energy Week.

The first Big Energy Week took place on 16 January 2012, with Citizens Advice, consumer groups, energy suppliers, Ofgem and switching sites hosting around 130 outreach events nationwide. Advice was offered to around 75,000 consumers throughout the week.

Big Energy Saving Week has run twice since, in October 2012 and again in January 2014.

In November 2012 DECC launched our Energy Efficiency Strategy, which sets out how we will maximise existing policy and realise the wider energy efficiency potential in the UK.

Bills and legislation

The Energy Act 2013 contains a number of consumer protection provisions including:

  • setting a limit on the number of energy tariffs offered to domestic consumers
  • the automatic move of customers from poor value closed tariffs to cheaper deals, and
  • requiring suppliers to the provide information to consumers on the best alternative deals available to them.

We have amended the Warm Homes and Energy Conservation Act 2000 (WHECA) through the Energy Act 2013 to put in place a new legal framework that requires us to set a new fuel poverty target in secondary legislation.

In December 2014 we put in place a new long term fuel poverty target for England. In March 2015 we published [cutting the cost of keeping warm: a fuel poverty strategy for England[(https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/408644/cutting_the_cost_of_keeping_warm.pdf).

The Energy Act 2010 allowed for the introduction of the Warm Home Discount scheme, while the Energy Act 2011 includes provision for the Green Deal and ECO.

The Home Energy Efficiency Scheme Regulations, first published in 2005, upholds the Warm Front scheme. The regulations were revised in 2006, 2009, 2010, 2011 and 2012.

Who we’re consulting

Consultation on the future of the Energy Company Obligation

We launched a consultation on the future of the Energy Company Obligation on 5 March 2014. This consultation is a key opportunity to make sure that the way we implement changes are as effective as possible, taking account of the needs of the industry and the experience of delivering ECO over the last year. The consultation closed for responses on 16 April 2014.

Consultation on preparing for a new fuel poverty strategy

We published Cutting the cost of keeping warm: a consultation that will help us to prepare a new fuel poverty strategy to set out how we intend to achieve the new fuel poverty target. The consultation seeks to explain how we will move from the broad principles we set out in a Framework for Future Action on Fuel Poverty to helping those that need it most, driving cost effective interventions and maintaining our regard for those most vulnerable to the effects of living in a cold home. We seek views on how we can improve the design and delivery of policy in order to try and meet the target. The consultation closes for responses on 7 October 2014.

Consultation on the extension to the Warm Home Discount in 2015/16

We have published a consultation on Warm Home Discount: extension to 2015/16 following the government commitment to extend the scheme to 2015/16. This consultation does not propose any significant changes to the structure of the scheme but asks for views on some a number of changes to improve the effectiveness of the scheme. Following the consultation, changes will be included in the updated Regulations. The consultation closes for responses on 13 November 2014.

Who we’re working with

Ofgem is supporting the Citizens Advice Energy Best Deal campaign, which is funded by energy suppliers and teaches consumers how to shop around, reduce their energy bills and get help if they’re falling behind on payment.

DECC sponsors the Fuel Poverty Advisory Group (FPAG) for England, an advisory non-departmental public body made up of member organisations including energy suppliers, charities and consumer bodies. FPAG has been subject to its first Triennial Review, the result of which have now been published.

The DECC Local Authority Fuel Poverty competition supported local action to reduce the extent of fuel poverty in across England; putting local action at the heart of efforts to keep homes warm and bills down. DECC provided £31 million of support to 60 projects, involving 169 Local Authorities working individually or as part of consortia. The number and variety of projects provided learning and insight into Local Authority-led delivery models for alleviating fuel poverty. For more information please see the DECC Local Authority Competition page.

Appendix 1: community buying

This was a supporting detail page of the main policy document.

Community buying is when consumers group together to buy goods or services in bulk.

This can make things cheaper, as buying in larger volumes usually means better deals and lower prices.

Community buying also helps people who don’t have access to transport and can’t get to bigger stores selling at the best prices. It can also be useful for people who don’t like buying on the internet or can’t afford to pay delivery costs.

There are more than 100 community buying schemes in the UK. They include:

  • Parkwood Estate shop, Kent - local residents have got together to bulk buy things like nappies, wet wipes and washing powder, saving up to 29% on some items
  • Brighter Living Partnership, Sefton, Merseyside - the partnership supplies food co-operatives in Sefton with fruit and vegetables
  • Oxford Rural Community Council oil buying scheme - runs a bulk oil buying scheme with more than 500 members across 20 counties, who save up to 10% on their oil
  • Smarterbuys - the Buy Better Together Challenge winner, Smarterbuys is using its prize money to develop its work and spread awareness of its service helping people with affordable loans
  • Fair Food Carlisle - second in the Buy Better Together Challenge, FFC provides workplaces in the Carlisle area with a weekly supply of locally-grown produce

Our evaluation of the Buy Better Together Challenge – jointly run by BIS and Co-operatives UK – shows it has encouraged existing collective purchasing schemes and successfully started new schemes.

After the Challenge ended in November 2012, this policy was taken forward by the Department for Energy and Climate Change (DECC) through the Cheaper Energy Together fund. This supported the development of innovative collective switching schemes for energy, where consumers group together to negotiate a better deal with their gas and electricity suppliers. £5 million of funds was awarded to 31 projects, covering 94 local councils and 8 voluntary or non-profit organisations in Great Britain.

Encouraging community buying is an essential part of the Community Energy Strategy announced by DECC on 27 January 2014. There will be a new community energy saving competition that will offer £100,000 to communities to develop innovative approaches to saving energy and money. Details will be announced when the competition is launched later in 2014, and may include collective switching schemes for gas and electricity or collective buying schemes for fuel, as well as projects to help communities use less energy.

If you’d like to know more about setting up or running a scheme, our Guide for community buying groups has all the information you need.

Appendix 2: Smarter Heating Controls Research Programme

This was a supporting detail page of the main policy document.

Domestic buildings

Domestic buildings account for about 30% of final UK energy consumption. Of this, space heating is responsible for about 60% and heating hot water accounts for about another 15%. The UK is committed to reduce the CO2 this emits 80% by 2050. Helping people control how they heat their homes could play a significant role.

At present, of the 95% of homes with boilers, 800,000 have no controls at all and over 70% lack the minimum specified by building regulations – a timer, room thermostat and thermostatic radiator valves. Industry estimates that upgrading all homes so they have this basic three could save 30% of the energy used for heating and hot water.

New technologies

There are claims that new technologies could deliver even larger savings because many find existing heating controls hard to use and do not use them effectively. Emerging products already enable people to remotely control their heating via their mobile phone or automatically turning off heating in empty rooms.

However, there is currently no robust evidence that either standard or more advanced heating controls actually save energy. A recent academic study concluded that it is not the presence or absence of particular controls that is important, but rather how people choose to interact with the technology that really matters.

Filling the evidence gap

The Smarter Heating Controls Research Programme has been established to fill this evidence gap. It consists of 8 work packages split into two stages.

Smarter Heating Controls Research Programme

Stage 1

Stage 1 will:

  • gather existing evidence
  • understand what people need from new heating controls
  • review emerging technologies
  • set out the logic of how ‘smarter’ controls could save energy
  • test the usability of alternative heating controls
  • design a trial to evaluate if they save energy (if suitable models exist)

Stage 2

If appropriate, Stage 2 will commission an appropriately designed trial to evaluate the level of energy saved by heating controls. Both stages will combine in-house analysis with commissioning external experts across a range of disciplines.

Other documents

Appendix 3: Warm Home Discount scheme

This was a supporting detail page of the main policy document.

The Warm Home Discount scheme is a 4-year initiative (April 2011 to March 2015) aimed at helping around 2 million of the UK’s most vulnerable customers with their electricity bills annually. The £1.1 billion scheme is funded by energy suppliers.

We have recently committed to additional spending of £320m on the Warm Home Discount scheme in 2015/16 and are currently consulting on a number of changes to the scheme to improve its effectiveness. The consultation closes for comments on 13 November 2014.

Elements to the scheme

There are 3 elements to the scheme:

Core group of pensioners on low incomes

This is the most vulnerable group of customers. In 2013 to 2014 participating electricity suppliers made almost 1.16 million automatic payments of £135 to this group and a total of 1.24 million eligible pensioners received the rebate. Payments for 2014 to 2015 will be £140 for each eligible household.

Check the eligibility criteria

Broader group of ‘at risk’ energy customers

Examples of people who may qualify for this discount are those on low incomes with a disability and those with a long-term illness or with young children. Participating electricity suppliers determine their criteria for eligibility, which are then approved by the Office of the Gas and Electricity Markets (Ofgem). There are limits on the number of customers who can benefit from Broader group schemes.

In the 2014 to 2015 period, approved Broader group scheme customers will receive a £140 discount on their electricity bills.

See below for a list of electricity suppliers offering Broader group schemes.

Industry initiatives

These are energy supplier-funded programmes and partnerships that assist those in or at risk of fuel poverty by providing benefit entitlement checks, debt advice and energy efficiency measures.

Winter 2014-to-2015 payments

All those eligible or potentially eligible for a Core Group discount will have received a letter by end of November 2015. Those whose letter asks them to contact the helpline to claim their discount will need to call by 30 January 2015 2014. Discounts should be credited to electricity accounts by end of March 2015.

The discount only applies to electricity accounts, so if customers use different suppliers for their electricity and gas they should only contact their electricity provider for this scheme.

Participating electricity suppliers

The electricity suppliers and their affiliates participating in the Warm Home Discount scheme are:

  • British Gas – 0800 072 8625 or 0800 294 8604
    • Sainsbury’s Energy – 0800 316 6011
    • Scottish Gas
  • Cooperative Energy – 0800 093 7511
  • EDF
  • E-On – 0800 051 1480
  • First Utility – 01926 320 700
  • Npower – 0808 172 6999
  • SSE – 0800 300 111
    • Atlantic – 0800 300 111
    • Ebico – Equipower/ Equigas – 0800 458 7689
    • M&S Energy – 0800 975 4754
    • Scottish Hydro – 0800 300 111
    • Southern Electric – 0800 300 111
    • SWALEC – 0800 300 111
  • Scottish Power – 0800 027 2700
    • Manweb
  • Utility Ware House – 0844 815 7777

Electricity suppliers offering Broader Group schemes

The suppliers offering Broader Group schemes are:

  • British Gas – 0800 072 8625 or 0800 294 8604
    • Sainsbury’s Energy – 0800 316 6011
    • Scottish Gas
  • Cooperative Energy – 0800 093 7511
  • EDF
  • E-On – 0800 051 1480
  • First Utility – 01926 320 700
  • Npower – 0808 172 6999
  • SSE – 0800 300 111
    • Atlantic – 0800 300 111
    • Ebico – Equipower/ Equigas – 0800 458 7689
    • M&S Energy – 0800 975 4754
    • Scottish Hydro – 0800 300 111
    • Southern Electric – 0800 300 111
    • SWALEC – 0800 300 111
  • Scottish Power – 0800 027 2700
    • Manweb
  • Utility Ware House – 0844 815 7777

Three other schemes supporting people at risk from fuel poverty are the:

Appendix 4: Warm Front scheme

This was a supporting detail page of the main policy document.

The Warm Front scheme closed to new applications on 19 January 2013. The scheme helps people at risk from fuel poverty, specifically those on low incomes living in properties with poor insulation or without a working heating system.

You can read more about the Warm Front scheme in the National Archives.

The scheme is administered by Carillion Energy Services and overseen by the Department of Energy & Climate Change.

Scheme’s achievements

A 2011 independent assessment of the Warm Front scheme reported that:

  • nearly 128,000 households took up the scheme between 2010 and 2011
  • replacement gas boilers, heating repairs and loft insulation were the most popular options among customers
  • 93% of respondents gave positive feedback on the scheme

2011-12 Warm Front Annual Report

2010-11 Warm Front Annual Report

Warm Front close-out report

Warm Front scheme measures costs by local authority and constituency

DECC commissioned in autumn 2013 an independent evaluation of the Warm Front scheme’s operation. The evaluation focused on the period between 2005 and the scheme’s close.

Help for vulnerable customers

The Home Heat Helpline has been set up to help vulnerable customers. The number is 0800 33 66 99.

Similar schemes are also available in:

Quality Assurance Assessor’s Report

Grant Thornton was the independent quality assurance assessor for the Warm Front Scheme. The Department commissioned Grant Thornton to carry out routine reviews of the management and delivery of the Warm Front Scheme when it was in operation.

All available reports are below.

Appendix 5: Big Energy Saving Network

This was a supporting detail page of the main policy document.

The Big Energy Saving Network delivers an extensive programme of outreach to vulnerable consumers, focussed on helping them reduce their energy costs through taking action on tariffs, switching and the take up of energy efficiency offers.

Big Energy Saving Network map

As part of Big Energy Saving Week (20-24 October), DECC has launched its Big Energy Saving Network map. Search the Big Energy Saving Network map for local advice in your area.

Following the success of the inaugural 2013/14 Big Energy Saving Network, which reached over 90,000 consumers, DECC has provided £1m funding to continue the programme into 2014/15. The Network will run through autumn/winter, with outreach activity concluding on 13 March 2015.

The Network is made up of a broad range of third sector organisations such as housing associations, Citizens Advice Bureaux and community energy initiatives. Each Network project is led by a specially trained Network ‘Champion’, voluntary workers that will co-ordinate the training of further volunteers and front line workers.

These volunteers and frontline workers will in turn deliver personalised advice to consumers focussing on taking action to cut their energy bills through switching tariff or payment method and exploring eligibility for the Warm Home Discount or energy efficiency offers.

Evaluation of the Big Energy Saving Network

This evaluation, published in February 2015, focused on the delivery of BESN between September 2013 and the end of March 2014, with the aim to review the following:

  • the impact of the programme on different types/groups of vulnerable individuals
  • the effectiveness of programme processes at each stage of the implementation
  • the efficiency and cost effectiveness of the programme

Data was gathered through a combination of methods including surveys and in-depth interviews with champions, volunteers, frontline workers and participants, and the analysis of programme monitoring data. This report discusses the outputs of this, covering insights into the theory behind BESN, how it was delivered in practice and what it achieved.

Appendix 6: Green Deal

This was a supporting detail page of the main policy document.

Buildings that leak heat and waste energy account for 38% of the UK’s total greenhouse gas emissions. Research has shown that people feel unable to act because they can’t afford the upfront costs of energy efficiency improvements or are unsure whether they can trust the quality of work.

We have introduced the Green Deal an ambitious and long term initiative designed to upgrade the energy efficiency of Britain’s properties.

It lets householders and businesses pay towards the cost of energy-saving improvements to their properties, over time, through savings on their energy bills, using suppliers they can trust.

For those most in need and for properties that are harder to treat, extra help may be available through the Energy Company Obligation (ECO).

How we’re managing the Green Deal

Creating a new system

We have:

  • worked with industry, local government, voluntary sector and communities to develop plans for the Green Deal
  • consulted widely to get input into the development of secondary legislation about the Green Deal and ECO
  • set up a £125 million cashback scheme for householders in England and Wales installing energy efficiency improvements under the Green Deal.
  • set up the Green Deal Home Improvement Fund for householders in England and Wales installing solid wall insulation and/or packages of energy efficiency improvements under the Green Deal. The first and second releases proved very popular. A third release of funds opened for new applications on 16 March 2015.
  • created the ECO to help some householders in older properties, and those on benefits or low incomes, who qualify for extra financial assistance

Setting the right standards

Businesses providing energy efficiency improvements must be authorised to operate under the Green Deal by:

We have considered Consumer rights and protection at every stage of developing the Green Deal.

Providing impartial information and advice

We have helped consumers to understand what is available by:

  • setting up a national energy savings advice service that provides advice
  • producing a range of guidance and advice documents and research
  • spending nearly £5m in advertising, public relations and marketing, related to promoting the Green Deal scheme since it was launched. This includes a £2.9 million communication campaign to build understanding of and trust in the Green Deal.

Funding for partners involved in the Green Deal

We have:

  • Provided a £7 million loan to support development of the Green Deal Finance Company (TGDFC), which will help fund Green Deal providers.
  • Given £88 million for Green Deal Communities , a street by street roll out of the Green Deal, supporting 24 local authorities. This figure includes additional support for installer training to help build supply chain readiness.
  • Provided £23m of funding through Core Cities and Pioneer Places initiatives. These include 8 major cities and 39 Pioneer Places (150 local authorities) to support delivery of the scheme.

Impact

The Green Deal programme will support the creation of up to 60,000 jobs in the insulation sector alone by 2015.

Our heating and insulation measures will benefit around 230,000 low-income households each year.

By 2020 the Green Deal could reduce UK household and business carbon emissions by 4.5 million tonnes per year.

Around 3 million hard-to-treat cavity wall properties will be eligible for support under the ECO.

Green Deal and ECO statistics

The latest statistics on the Green Deal and Energy Company Obligation (ECO) have been published. These include summary figures on the number of GD assessments, as well as information on ECO brokerage and the GD supply chain.

ECO and Green Deal evaluation

All the research on the Green Deal and Energy Company Obligation (ECO) have been published. These include reports on the Green Deal and ECO customer journey, Green Deal assessments and the Green Deal and ECO supply chain.

Further information

You can read more about the Green Deal in our detailed guides:

Appendix 7: smart meters

This was a supporting detail page of the main policy document.

Smart meters are the next generation of gas and electricity meters. They are part of our plan for upgrading the UK’s energy system.

We aim for all homes and small businesses to have smart meters by 2020. Energy suppliers will be required to install smart meters and take all reasonable steps to install them for everybody.

Consumers with smart meters will be offered an in-home display (IHD) that lets them see how much energy they are using and what it will cost. This will let them have more control over their energy use and help them save energy and money.

Between now and 2020 energy suppliers will be responsible for replacing over 53 million gas and electricity meters. This will involve visits to 30 million homes and small businesses.

Most householders will have smart meters installed by their energy supplier between 2016 and 2020, although some energy companies are starting to install smart meters now.

Benefits

Smart meters will give consumers:

  • near real-time information on energy use, expressed in pounds and pence
  • the ability to manage their energy use, save money and reduce emissions
  • an end to estimated billing – people will only be billed for the energy they actually use, helping them to budget better
  • easier switching – it will be smoother and faster to switch suppliers to get the best deals

Smart meters also give suppliers access to accurate data for billing, removing the need to manually read meters.

We are making sure consumers will be protected when smart meters are installed in properties. Our provisions to ensure this mean:

  • there will be no sales during the installation visit
  • installers must provide energy efficiency advice as part of their visit and they will need permission before the visit if they will want to discuss their own products
  • consumers’ privacy will be protected and they will have control over their smart meter data
  • we have put in place a consumer engagement strategy, to ensure that consumers can get the most out of their smart meter. Smart Energy GB has been set up to reach out to consumers across Great Britain in order to improve consumers’ understanding of how smart meters work.

A smart meter can work in pre-payment or credit mode. Pre-payment customers will see some particular benefits from having a smart meter. For example:

  • energy suppliers will offer new and more flexible ways of topping up their meter, including the ability to top up over the phone or online
  • for those who continue to top up at shops, the smart meter can be set so that consumers do not run out of credit at night and won’t be left without power when the shops shut.

Find out more by visiting Smart meters: a guide.

Roll-out of smart meters

The roll-out of smart meters will take place in 3 stages.

Policy design stage

The policy design stage ran between July 2010 and March 2011 and was managed by the Office of Gas and Electricity Markets (Ofgem) on behalf of DECC.

Find out more about the decisions taken in this stage.

Foundation stage

The foundation stage began in March 2011. We are working with the energy industry, consumer groups and other interested parties to ensure that all of the necessary groundwork is completed before energy suppliers start the process of providing smart meters to most of their customers. The foundation stage is crucial to the successful roll-out of smart meters across Great Britain and will let industry:

  • build and test systems
  • learn what works best for consumers
  • learn how to help people get the best from their meters

An important milestone for this stage was the setting up of the Data and Communications Company(DCC), which will link 53 million smart electricity and gas meters in homes and small businesses with the business systems of energy suppliers, network operators and energy service companies. The Smart Meters Communications License was granted to the DCC in September 2013.

Main installation stage

The main installation stage, when most consumers will have smart meters installed, will start in 2016. Suppliers are obliged to complete the roll-out by the end of 2020 and they will decide how they deploy smart meters to their customers.

Costs and funding

Over the period to 2030, the installation of smart meters will provide £6.2 billion net benefits to the UK: the programme will cost £10.9 billion and provide £17.1 billion in benefits. The cost-benefits analysis can be found in our latest Impact Assessment.

Latest progress

The Smart Metering Implementation Programme requests (on a quarterly basis) data relating to the number of smart and traditional meters installed from the larger energy suppliers. The latest quarterly statistical release is available.

Stakeholders we work with

The smart metering programme works with a wide range of organisations, including large and small energy suppliers, networks, consumers groups and regulators. More information about their work is contained in the links of some of the organisations we work with, below:

How we work with stakeholders

We have set up working groups for representatives from industry, consumer organisations and other bodies and they are as follows:

  • Smart Metering Steering Group (SMSG)
  • Smart Metering Delivery Group (SMDG)
  • Implementation Managers Forum (IMF)
  • Technical & Business Design Group (TBDG)
  • Regulatory Group (RG)
  • Operational Delivery Group (ODG)
  • Transition Security Experts Group (TSEG)
  • Transition SMKI PMA Group (TPMAG)
  • Benefits Monitoring & Review Group (BMRG)

You can find further details on how we work with stakeholders on the Information for Industry webpage.

Further information

Consultations

DECC has published a number of public consultations regarding the Smart Meters Programme.

Impact assessment

The Smart Meter programme carries out regular impact assessments, which we will update as the programme develops. The latest Impact Assessment is available here:

Smart meter roll-out for the domestic and small and medium non-domestic sectors (GB) (published 30 January 2014)

Evidence and research

The evidence supporting the roll-out of smart energy meters in Great Britain is based on international and national research. Energy suppliers that are rolling out smart meters and consumer groups with an interest in the programme have also carried out related research.

DECC monitoring, evaluation and consumer research

Our approach to tracking the progress of the Programme and its costs and benefits is underpinned by our Monitoring and Evaluation Strategy.

DECC has already produced the following research for the Smart Meter programme:

More UK evidence

Ofgem has produced the following research on smart meters:

International evidence

Research on smart meters from across the world includes:

Europe
US

Appendix 8: Energy Company Obligation (ECO)

This was a supporting detail page of the main policy document.

ECO was introduced in January 2013 to reduce Britain’s energy consumption and support people living in fuel poverty by funding energy efficiency improvements in homes. The larger energy companies are set obligations to install insulation and heating measures in order to achieve reductions in energy usage and heating costs. ECO works alongside the Green Deal as a way of providing consumers support and funding for these measures.

ECO and Green Deal will help reduce carbon emissions from Britain’s domestic building stock, which is an essential part of the UK’s plan to meet its statutory domestic carbon emission reduction targets by 2050. Government has recently extended the ECO scheme to March 2017.

ECO is administered by the Office for Gas and Electricity Markets (Ofgem).

Scope of the ECO

There are 3 obligations under the ECO.

Carbon Emissions Reduction Obligation

This provides solid wall, cavity wall and loft insulation measures, and connections to district heating systems, alongside secondary measures including double glazing and draught proofing.

Carbon Saving Community Obligation (CSCO)

This provides insulation measures and connections to district heating systems to households in specified low income areas. Suppliers must meet 15% of their obligation by installing measures in rural areas. Ofgem has published a tool to assist installers and customers to identify eligible CSCO and CSCO rural areas.

You will find a list of small area geographies eligible for CSCO support in The Future of the Energy Company Obligation document.

Affordable Warmth Obligation

This provides heating and insulation measures to consumers living in private tenure properties that receive particular means-tested benefits. This obligation supports low income consumers that are vulnerable to the impact of living in cold homes.

How ECO is funded

ECO is funded by the larger energy suppliers. Energy suppliers obligated under the scheme decide how they meet their obligations, including which homes to treat and how much subsidy they provide to each heating or insulation measure. This may depend on the size and type of the property, the consumers’ individual circumstances and whether other finance is also being used, for example Green Deal finance.

How ECO is delivered

Energy suppliers provide contracts with partners, such as local authorities, installers and Green Deal providers. They may also deliver measures directly through in-house installation arms.

ECO Brokerage is a market-based mechanism that supports open and competitive delivery of ECO. Brokerage operates through fortnightly, anonymous auctions where ECO providers can sell ‘lots’ of tonnes of carbon savings or bill savings to energy companies in return for ECO subsidy.

Compliance and monitoring of ECO

Ofgem monitors energy suppliers and enforces compliance under the obligations. Energy suppliers must report on their delivery against their obligation to make sure they are on track to meet their target by 2015 and 2017.

Under both the ECO 1 Order and the ECO 2 Order energy suppliers will also need to report on their costs of delivery, to help us achieve greater transparency around any costs passed on to the consumer.

You can read the consultation on in-use factors and download the calculation of the ECO targets in the final impact assessment.

Ofgem has published ECO 1 guidance for suppliers and ECO 2 guidance (administration and delivery) which provide information on administrative requirements and processes for the ECO supply chain.

In accordance with article 7(6) of the Energy Efficiency Directive the Secretary of State has issued to Ofgem a letter of direction for ECO1 and a letter of direction for ECO 2 on the measurement, control and verification of energy efficiency improvements. In line with these letters, Ofgem have set out the requirements in relation to technical monitoring under ECO.

ECO and Green Deal statistics

The latest statistics on the Green Deal and Energy Company Obligation (ECO) are available on GOV.UK. These include summary figures on the number of Green Deal assessments, as well as information on ECO Brokerage and the Green Deal supply chain.

Ofgem also publish monthly reports on supplier progress against their obligations.

Further information

The Energy Saving Advice Service provides impartial information about eligibility, access to ECO and the other types of support available.

Call: 0300 123 1234.

Visit Ofgem’s website.

Complain about improvements made to your home

Installations issues are a matter that should always be taken up with the company who carried out the work in the first instance. You may also wish to consider contacting Citizens Advice if your problem is still not dealt with.

Your improvement works may also be covered by a guarantee or warranty. Check your paperwork to find out if you’re covered and how to complain.

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