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If the cap fits
The Carbon Reduction Commitment Energy Efficiency
Scheme will have a major impact across the supply chain.
Hywel Davies looks at some of the key issues for the sector
C
reated as a ‘cap and trade’ mechanism directly (not through service charges) by tenants. This
to improve energy efficiency in large may stimulate the installation of energy meters and
organisations, the CRC targets about 5,000 separate supplies in tenanted commercial buildings. The
of the UK’s largest businesses. It provides new CIBSE TM39 Building Energy Metering will help
financial incentives to cut energy use and put a price on engineers to design metering strategies where these are
energy-related emissions. But is it just another green required by clients (see Meters feature on page 36).
stealth tax? This summer the Environment Agency wrote to all UK
Under the CRC – which is administered throughout billing addresses with half-hourly meters. Organisations
the UK by the Environment Agency – organisations buy contacted must give the agency evidence
allowances for their annual emissions. Total allowances of electricity consumption from 1 January
are capped, and within the cap, participants determine the to 31 December 2008, and those without
most cost-effective way to reduce emissions. They may this information must get it from their
Perhaps it is
buy extra allowances or invest in reducing their energy electricity supplier. Those falling within
time to review
use. Qualifying organisations must, by law, comply, or face the scheme must register online.
financial and other penalties. Each year, participants must record all
the energy consumption
Allowances will be recycled to participants based on their business’s energy use (electric, gas,
of your larger
an annual energy-efficiency performance league table, oil, coal, LPG etc), calculate emissions
so those who cut emissions most get most back. The and make an online return to the scheme
clients now?
proportion of the total fund awarded to top performers administrator. They must buy allowances
will rise with time, encouraging energy-management to cover their emissions from energy use, report their actual
strategies that reduce energy consumption. The league emissions, and then surrender allowances equivalent to
table puts energy efficiency on public display, which should actual emissions at the end of the year. Those with too
stimulate interest and create a more positive environment many or too few allowances will need to trade allowances
for engineers and facilities managers to make the case for with other businesses to meet the shortfall, or recoup the
investing in energy efficiency. cost of allowances not required.
A three-year introductory phase begins in April 2010, So CRC will focus the minds of finance directors across
with the first sale of allowances in April 2011 at a fixed price the UK on energy efficiency, and on what the business
of £12 per tonne of CO2 for 2010-11 and 2011-12. From does to reduce it, as well as on the public perception of
April 2013, there will be an annual auction, with a cap on what the business is doing for the environment. There
total allowances available, to ensure annual emissions will be a demand for services engineers who can identify
fall. There is a cash-flow implication – allowances must real opportunities to cut energy bills, save money and
be bought several months before recycling payments are reduce emissions. Perhaps it is time to review the energy
made, requiring a payment of five to 10 per cent of energy consumption of your larger clients now? l
bills up front. CIBSE has developed a one-day CPD course for 2010
Organisations fall within CRC if they or a subsidiary giving details of the legal requirement and the practicalities
have at least one half-hourly electricity meter settled on the of CRC reporting, with examples of how CRC affects end
half-hourly market (70kVA meters in Northern Ireland), or users and service providers. It covers carbon footprinting
total half-hourly electricity consumption exceeding 6,000 and creating a wider carbon management strategy.
MWh in 2008, roughly equal to an annual electricity bill CIBSE is also holding a CRC event on 3 December
FurtHer inFormation
of £500,000. 2009 – for information visit www.cibsetraining.co.uk/
more details on the CrC are
available at www.decc.gov.uk,
Responsibility for CRC compliance falls on the conferences
which offers a downloadable
organisation with the utility contract. So this will have
draft user guide and an
a major impact on landlords unless energy is bought
Hywel Davies is technical director of CIBSE.
implementation timeline.
18 CIBSE Journal December 2009 www.cibsejournal.com
CIBSEdec09 pp18 legal.indd 18 19/11/09 16:23:19
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