Brokerage objectives
Brokerage is a market based trading platform introduced to support cost-effective delivery of the Energy Company Obligation ECO. The objectives of the brokerage platform are
How it works
Brokerage operates as a fortnightly anonymous auction where providers of the Energy Company Obligation ECO can sell lots of ECO measures to energy companies in return for ECO subsidy. The Crown Commercial Service CCS hosts an e-auction online platform that allows energy companies to bid in real-time between 9am to 11am and 1pm to 3pm on each auction day. Registration
Currently, only Green Deal Providers GDPs are able to sell on Brokerage, although we may look to expand this to other delivery partners in the future. More information about the requirements and application form to become a GDP can be found on the GD ORB website. Following the announcement to cease funding of the Green Deal Finance Company, the former Department of Energy Climate Change DECC determined that GDPs are no longer required to hold full Financial Conduct Authority FCA authorisation to access ECO Brokerage. This is because FCA authorisation is required for the provision of consumer credit, which is not a requirement under Brokerage. This decision supports new entrants to the Brokerage market who may not be able to provide the evidence needed to comply with the FCA checking process. Where an existing Brokerage GDP holds full FCA authorisation, but no longer wishes to provide consumer credit, BEIS is content for these permissions to lapse and access to Brokerage to be retained. Once GDP status is obtained, you will need to register with CCS to access Brokerage. CCS can be contracted at eauctionsecobrokeragecrowncommercial.gov.uk. BEIS publishes a
List of all buyers and sellers registered to trade on the brokerage platform ODS, 7.27 KB. Brokerage contract
All trading on ECO Brokerage is underpinned by a standard 4 part contract which sets out the terms of delivery, reporting and payment between seller and buyer
Contracts for lots submitted and bought at Auctions 72 onwards
The brokerage compliance letter also includes
Bi-lateral Off-take contract October 2015 and operational changes to brokerage
The revised bi-literal off-take contract introduced from Auction 72 was as a result of comments received against proposed changes to both the contract and operational aspects of brokerage. The proposals and decisions made are summarised in the document below
Energy Company Obligation - Summary of the Contractual and Operational Changes made to Brokerage PDF, 209 KB, 12 pages
Contracts for lots submitted and bought at Auctions 33 71 inclusive
Contracts for lots submitted and bought at Auctions 1 32 inclusive
Brokerage auction
When submitting lots for sale, GDPs will need to specify the length of the contract 3, 6 or 12 months, and the volume they intend to deliver. However, to preserve anonymity, when lots are published for sale on brokerage they will be displayed as ranges
ECO Carbon
Band 1 Band 2 Band 3 Band 4 Band 5 Band 6 Band 7
Lot size tCO2 1k to 3k 3k to 6k 6k to 10k 10k to 14k 14k to 19k 19k to 26k 26k to 35k
ECO Affordable Warmth
Band 1 Band 2 Band 3 Band 4 Band 5 Band 6 Band 7
Lot size bill saving 100k to 300k 300k to 600k 600k to 1m 1m to 3m 3m to 5m 5m to 7.5m 7.5m to 10m
Once the auction has closed, the highest bidder will be informed of the exact amount of ECO they have bought provided they have met the Sellers reserve price. The auction cycle
Results
A full breakdown of the ECO Brokerage results can be found at Breakdown of ECO brokerage results
BEIS also publishes a summary of the
ECO Brokerage auction dates and deadlines PDF, 40.1 KB, 1 page
Guidance and support
The Crown Commercial Service has issued guidance for buyers and sellers
In addition to this, web-based training, guidance and a telephone support service are available for buyers and sellers. For help when submitting lots please contact CCS by emailing eauctionsecobrokeragecrowncommercial.gov.uk
The eAuctions hotline is 0151 672 2046 and can be called during the hours of a Live eAuction. Frequently asked questions
How do I report on delivery under an ECO Brokerage contract or when a contract is terminated? When a lot is sold on ECO Brokerage, buyers are required to report on delivery or when a contract is terminated in accordance with the provisions allowed by the brokerage contract. Buyers must complete an
ECO brokerage contract report PDF, 271 KB, 2 pages and return via email to eauctionsecobrokeragecrowncommercial.gov.uk
Reports are due back to CCS no later than 8 weeks after the contract due date or 8 weeks after contract sale date if the contract is terminated. The ECO Brokerage Contract Report supersedes the Delivery Date Contract Quantity Report and should be used for contracts bought from Auction 72 17th November 2015 onwards. Can I sell measures I have already installed via Brokerage? No, only future measures can be sold via brokerage.
This is to enable to buyers to prove that carbon or bill savings were delivered through ECO. What is the smallest lot size? The smallest lot that can be sold on brokerage is 1,000 tonnes of CO2 or 100,000 of bill savings. If prices rise on brokerage, and I am half-way through a contract, can exit the contract? The Brokerage contract does not provide a means of exiting the contract once it has been entered into. Where the agreed contract volume is not delivered the buyer has the right to determine the method of remediation to ensure that they do not suffer a financial loss.
This is to discourage sellers from over-contracting, under-delivering or playing the market to their advantage. How is the Brokerage performance rating system calculated? Due to the anonymous nature of Brokerage, the performance ratings system was introduced in January 2014 to provide buyers with some evidence of a sellers ability to deliver agreed contracts. On its introduction, both under and over delivery of the agreed contract volume affected the rating however, from November 2015 only under delivery will be considered. DECC have published further information on how the
ECO brokerage performance rating system PDF, 207 KB, 2 pages are calculated. Who can trade on Brokerage? Currently, only Green Deal Providers GDPs are able to sell on Brokerage, although we may look to expand this to other delivery partners in the future.