Executive Summary

This paper sets out the analytical approach to, and results from,  modelling the impact on fuel poverty, of removing 75% of the domestic Renewables Obligation (RO) from fuel bills and ending the Energy Company Obligation (ECO) scheme. as, announced in the 2025 UK Autumn Budget.

This amounts to a reduction of 3.4 pence per kwh of electricity and 0.315 pence per kwh mains gas with no change to standing charges. When compared to the average GB Ofgem price caps for January to March 2026, this corresponds to a 12.3% decrease in the unit rate for electricity and 5.3% decrease in the unit rate for gas.

This modelling has been produced to provide a broad indication of the impact of decreases in energy bills on fuel poverty rather than a precise estimate of the number of affected households. It uses a similar approach to the fuel poverty scenario modelling published by Scottish Government each quarter, following Ofgem energy price cap announcements.

This modelling has been based on the underlying data from the 2023 Scottish House Condition Survey (SHCS).We have not accounted for any other changes in household income, housing costs or the energy efficiency of dwellings since the 2023 survey. An update of these factors will be available when results from the 2024 SHCS are released, with publication scheduled for February 2026.

In order to more precisely model a per unit decrease in fuel prices, as opposed to the broad impact of changes to the overall energy price cap, we have adjusted our methodology to apply the new gas and electricity unit rates, before and after the reduction to the RO levy and ECO scheme, more directly.

Our analysis shows that under this updated approach:

• For the January to March 2026 period we estimate around 800,000 (31%) fuel poor households in Scotland with around 400,000 (16%) in extreme fuel poverty.

• After the removal of the RO and ECO levies we estimate, for the same period,  around 730,000 (29%) fuel poor households and 350,000 (14%) extreme fuel poor households in Scotland.

• This is a reduction of around 60,000 households (2.5 percentage points) in fuel poverty and 50,000 (1.9 percentage points) households in extreme fuel poor poverty.