ENERGY
THE TIME TO ACT IS NOW: REGISTER FOR THE ENERGY EFFIC
Malcolm Fergusson, Head of Climate Change at the Environment Agency, explains why businesses and public sector organisations must act now to comply with the new CRC Energy Efficiency Scheme.
he UK government has made a commitment to reduce carbon dioxide (CO2) emissions by at least 80% from 1990 levels by 2050. This tough target will require significant changes in the way businesses and public sector organisations operate in order to make them more sustainable and energy efficient. The CRC Energy Efficiency Scheme is a new mandatory emissions trading scheme designed by the Government to help reach this target. According to analysis for the Environment Agency, it could reduce carbon dioxide (CO2
T )
emissions (from up to 5,000 Participant organisations) by up to 11.6 million tonnes per year by 2020 - the equivalent to taking about four million cars off the road.
Registration opened for the CRC Energy Efficiency Scheme on 1 April, and qualifying organisations, must register for CRC with the Environment Agency before 30 September 2010. For the first time large non-energy intensive organisations, which account for about 10 per cent of UK CO2
emissions,
will be legally bound to closely monitor and report their emissions from energy use in preparation for carbon trading. The scheme will also give people and businesses the opportunity to compare organisations’ efforts in reducing energy consumption. Participants successful in reducing energy consumption will not only save money on bills - they will also receive financial rewards and boost their environmental reputation. These savings should be well in excess of the costs of participating in the scheme.
WHO IS ELIGIBLE FOR CRC? Public sector organisations and businesses must also register for the scheme by 30 September 2010 if they have at least one settled half-hourly electricity meter. These organisations may also be participants in the scheme if they
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meet the qualification threshold. All Government departments are participants in the CRC Energy Efficiency Scheme, regardless of their energy consumption. This threshold for public and private sector organisations is determined by 2008 electricity consumption: if the organisation had a half-hourly meter and consumed at least 6,000 Megawatt-hours of electricity through all of its meters during 2008 (equivalent to an electricity bill of around £500,000), then it will need to be a participant in the scheme by monitoring energy consumption and purchasing allowances. However, if the organisation has a half-hourly electricity meter but consumed less than this amount of electricity, it will be an information declarer. This means that all it will need to do is identify the electricity use through its half-hourly meters. Information declarers do not have to participate fully in the scheme - for example they do not have to purchase allowances.
NOW IS THE TIME TO REGISTER Businesses and organisation that are eligible for CRC need to register via the online registry by 30 September. Following registrations, participants will need to submit a footprint report once during each phase of the scheme, report on emissions annually and maintain an evidence pack relating to energy use. From 2011 onwards, participants will also need to hold and surrender sufficient allowances to cover their energy use emissions covered by the scheme. CRC participants will have to pay a
one-off registration fee of £950 and an annual subsistence fee of £1,290 each year. While there are costs involved, savings made through reducing energy consumption should far outweigh the fees. There are no fees for information declarers.
There are serious penalties for eligible organisations if they do not register with CRC by the end of the registration period
– they will be handed an initial fixed fine of £5,000, then for each subsequent working day they fail to register they will be fined an additional £500 per day, for a maximum of 80 working days. Their name will also appear on a published list of non-compliant participants. It is therefore essential that eligible organisations register before 30 September 2010.
HOW THE CRC ENERGY EFFICIENCY SCHEME WILL REDUCE EMISSIONS The CRC Energy Efficiency Scheme will be phased in over three years. Once fully operational, CRC Participants (not Information Declarers) will be required to monitor their emissions and purchase allowances at the beginning of each reporting year for each tonne of CO2
they emit.
The scheme is revenue-neutral overall, meaning all revenue raised from selling allowances is redistributed back to Participants according to their position in the annual Performance League Table. As a consequence, reducing carbon emissions means Participants will save money on their energy bill, will purchase fewer allowances and receive greater financial reward through revenue recycling. Participants that perform well will also be placed higher in the Performance League Table, which will be published annually by the Environment Agency.
In
an age of an eco-conscious public, being higher up the league table will have the added benefit of enhancing the organisation’s reputation.
UNDERSTANDING CRC
Compliance with the CRC Energy Efficiency Scheme will require financial, audit and carbon management adjustments to be made by participating organisations. By planning and preparing for these now, participating organisations can not only make sure they fulfil their legal duty, but that they can make the most of the opportunities offered by the
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