Page type: primary-anchored (mirrors Electricity and Gas (Energy Company Obligation) Order 2022, SI 2022/875)
ECO4 Order (SI 2022/875)
The Electricity and Gas (Energy Company Obligation) Order 2022 is the statutory instrument that creates and governs ECO4, the fourth iteration of the Energy Company Obligation. It imposes obligations on large energy suppliers to fund energy efficiency measures in low-income and fuel-poor households.
Primary source: ~/knowledge/sources/legislation/uk/si-2022-875-eco4.md
Related: The scheme-level wiki page at eco4.md covers ECO4 from an operational and policy perspective, drawing on both this SI and the Ofgem/DESNZ scheme administration. This page covers the statutory structure.
Last updated: 2026-04-05
Enabling powers and vires
The Order is made under three enabling powers: - Gas Act 1986, s.33BD: power to impose home-heating cost reduction obligations on gas suppliers - Electricity Act 1989, s.41B: equivalent power for electricity suppliers - Utilities Act 2000, s.103A: supplementary powers for energy efficiency schemes
The Secretary of State must consult GEMA, Citizens Advice, distributors, suppliers, transporters, and "other appropriate persons" before making the Order. Scottish Ministers' agreement is required for GB extent.
Scheme parameters (Part 2-3)
| Parameter | Value | Article |
|---|---|---|
| Overall target | GBP 224.3 million in annual cost savings | Art 3 |
| Period | 27 July 2022 to 31 March 2026 | Art 1/3 |
| Electricity threshold | 300 GWh per phase | Art 4(1)(a) |
| Gas threshold | 700 GWh per phase | Art 4(1)(b) |
| Customer threshold | 150,000 domestic customers | Art 4(1)(a)/(b) |
| Per-phase obligation (home-heating) | GBP 28,037,500 per participant (pro rata) | Art 7(1)(b) |
| Per-phase EFG requirement | GBP 19,487,500 per participant (pro rata) | Art 7(1)(b) |
Who must deliver (Part 3)
Only large suppliers are obligated: those supplying at least 300 GWh electricity or 700 GWh gas and serving at least 150,000 domestic customers. Obligations are allocated pro rata by supply volume above the threshold (Art 7-8). Group companies share obligations.
Qualifying actions and eligibility (Part 5)
Measures must be installed at domestic premises and result in heating cost reductions. Three routes to qualification:
- Help-to-heat group (Arts 13-16): owner-occupied (SAP D-G), private rented (SAP E-G), social housing. Householder must be receiving one of 10 welfare benefits (Schedule 1).
- Declaration routes (Arts 17-21): local authority declares income below GBP 31,000, or premises meeting deprivation criteria, or health referral, or supplier declaration (debt/disconnection).
- In-fill (Arts 22-23): neighbouring premises in same building block (flats) or street (houses), linked to primary qualifying measures.
A maximum of 50% of obligations can be met through declaration routes (Art 10(3)).
Heating hierarchy (Part 5, Chapter 4)
The Order encodes an electrification-first policy for off-gas premises:
- Tier 1 (Art 30): Hydronic heat pumps
- Tier 2: District heating connections, biomass (rural only)
- Tier 3: Electric storage heaters, renewable/fossil fuel system repairs
Coal heating is absolutely prohibited (Art 27). Fossil fuel measures are limited to repairs at off-gas premises.
Scoring system (Part 10)
The scoring converts physical measures into abstract scores using a multi-factor formula:
Full project score = KP x (1+F) x (C + OGR) + BH + ESH + IMP + BFR - L
Where: KP = cost savings from SAP assessment; F = floor area uplift (0-0.2); C = quality factor (1.0-1.1); OGR = off-gas rural uplift (0-0.35); BH/ESH = heating additions; IMP = innovation uplift; BFR = fabric repair; L = late penalty.
Partial projects (non-Art-49-compliant) receive 80% of full score (deflator D=0.8).
Exemptions (Part 11)
Measures exempt if prevented by: conservation area status, listed building impact, protected species, unlawfulness, or infeasibility due to local conditions, fabric/structure, or access restrictions (Art 79(2)).
Enforcement (Part 13)
Ofgem (the Administrator) makes final determinations on compliance by 30 September 2026. Enforcement uses existing Gas Act and Electricity Act powers. Measure and obligation transfers are permitted by application (Arts 80-81).
Defined terms
See the source file for the full register of ~150 defined terms. Key terms: "participant" (Art 4), "ECO4 project" (Art 2), "help to heat group" (Art 2/Sch 1), "qualifying supply" (Art 2), "SAP band" (Art 2).
Cross-references
- ECO4 scheme operations, the scheme-level wiki page
- Gas Act 1986, the enabling Act for gas suppliers
- Electricity Act 1989, the enabling Act for electricity suppliers
- Warm Home Discount, a related supplier obligation scheme