£59 Off Energy Bills After ECO Ends? Only if you have Mains Gas

The Government has issued direction on how energy suppliers must reduce energy bills, to reflect the recent cessation of ECO and the payment of 75% of the Renewables Obligation from the Treasury.  Section 14 of the direction specifies how the ECO specific deduction should be applied, with a per unit discount as below:

(a) 0.89 p/kWh in respect of electricity

(b) 0.31 p/kWh in respect of gas

Why these figures? These were the same amounts that were used by Ofgem for the costs of ECO per fuel in the cost cap calculation for 1^st January to 31^st March 2026. https://www.ofgem.gov.uk/sites/default/files/2026-02/Annex-4-policy-cost-allowance-methodology-v1.23.xlsx

For a household using the typical average amount of electricity, 2700kWh, that equates to a discount of £24.03 per annum and for an average gas usage of 11,500kWh, a further saving of £35.65, together £59.68, which pretty much equates to the ECO element of the £150 that was claimed to be the saving for ECO. 

If you multiply these p/kWh discounts by the total domestic electricity and gas used in Great Britain last year, the overall discount is as shown below:

(a)  £855m per annum for electricity

(b)  £855m per annum for gas

So a total discount of just over £1.7bn, which is the inflationary adjusted annual cost assumption for ECO, split equally between gas and electricity use.

Around 16% of homes do not have mains gas, especially those in rural areas, which means that of the 28 million homes in GB, around 4.5million are only receiving part of the discount, the £24.03 from their electricity bill, not the full £59, despite potentially having paid the full ECO levy in years gone by. Worst hit are areas such as the southwest, which has 24% of homes off the gas network, closely followed by London, East Anglia, Scotland and Wales, all with around 20% of homes without mains gas. So at a time when the Government is pushing people to electrify their heating, they have decided to penalise these homes, offering less than half the promised cut from ECO, compared to those which has mains gas.

And this is before you add back all the the increases in charges for network upgrades that were sneaked in just after the Budget, which are quite possibly disproportionally higher in these regions, but that takes a lot more unpicking!