1 Department of Energy and Climate Change The Green Deal and ...

E. Too complex to
simultaneously
arrange Green Deal
finance and ECO
contract
F. Tenders for largescale
retrofit
inhibited by need for
prior ECO contract
Potentially valid, and providers may also be concerned at revealing
information to potential competitors (if a supplier has in-house
delivery). A brokerage would need to guarantee volume could
be placed (and providers to accept some market price risk, or
cost inefficiencies would rebound on consumers). However,
there may also be the same objections as D. – standard
contracts can be placed through six phone calls; bespoke
contracts may not be suitable for a brokerage
The real barrier here is the short timescale and firm targets of ECO,
which make it difficult for housing providers to negotiate with
suppliers and then place a tender. Some flexibility between ECO
periods would reduce this barrier. There would be a benefit of a
brokerage if the costs of transactions are lower than direct
negotiation with suppliers, although this would only seem likely
if standard contracts were practicable.
143. Our conclusion is that a brokerage model is not required. Clearly, we would welcome and
would use any route to market that provides a secure and cost effective solution to delivery of
the obligation. We believe this can be achieved through energy suppliers working with local
suppliers and providers to deliver the lowest cost and most effective delivery of the obligation,
rather than establishing a formal brokerage system and associated infrastructure at further
significant cost to the industry and in turn the energy bill payers. As it is in the interest of
energy suppliers to work with GDPs where they offer cost effective delivery, we feel that
market forces will ensure competitive access to ECO, and that a brokerage is an unnecessary
burden on a new market.
144. If DECC are minded to pursue a brokerage model we would be prepared to support its
development, but no assumption can sensibly be made as to how much of the market it might
capture.
Q52. Do you agree that it is desirable that energy suppliers should have to fulfil some or all of the
(carbon) obligation by spending money promoting measures through those organisation
who are able to provide the most cost effective delivery options?
145. No. Forcing suppliers to purchase from particular providers will create inefficiencies in the
market, which increase costs to energy consumers. If they are genuinely cost effective then in
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