Carbon Reduction
and Management By Sarah Royse, RES Group
The UK’s binding commitment to reducing its CO2 emissions by 80% by 2050 has taken energy efficiency,
carbon management and renewable energy from being an emotive subject
to a real business issue that, if not addressed successfully, can adversely affect an organisation’s
competitive advantage.
While energy and carbon legislation has become more stringent, it has been coupled with attractive financial incentives for investing in both energy efficiency and renewable energy technologies. Discerning businesses at the vanguard of our recovering economy are now able to gain a significant advantage over their competitors by being proactive in exploiting the economic and carbon benefits that include: • Increased financial benefits through the early adoption of government backed incentives to invest in renewable technologies
• Significantly reducing their energy bills through investment in energy efficiency initiatives
• Hedging against future fuel prices rises with a secure and reliable on-site energy supply
• Exploiting the marketing benefits of being a low carbon business
Increasing Electricity Prices Without doubt businesses need to consider the impact that rising electricity prices will have on their bottom line. Recent figures released by DECC as part of its consultation on the electricity market reform show that electricity prices will increase by about 50% over the next 10 years, which will have a dramatic impact on energy costs. Businesses that fall under the Carbon Reduction Commitment Energy Efficiency Scheme (CRC
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Developing a Strategy to Reduce Energy Consumption & Carbon Emissions All businesses, irrespective of size, need to act now to gain maximum advantage over the medium to long term. By developing an effective strategy that reduces your energy costs and carbon emissions and exploits the other less tangible benefits that result, you will make your business leaner, more competitive and help boost your reputation amongst your customers, staff and the wider market.
As a rough guide, you should be aiming to reduce your energy costs by between 15 – 25% from quick wins with some investment. You then need to develop a strategy to exploit renewable technologies so that you can benefit from the relatively high returns from the incentives that the Government is currently operating and rolling out. From a financing perspective you should also consider the tax benefits of exploiting the Enhanced Capital Allowance (ECA) scheme for energy saving technologies. Most importantly, make sure your energy efficiency strategy has a demonstrable business benefit so that you can readily exploit energy efficiency as a fundamental part of your corporate strategy.
The Carbon Reduction Commitment Energy Efficiency Scheme (CRC EES) The CRC EES is a mandatory UK-wide scheme which organisations across both the public and private sectors are subject to if they have an energy consumption of 6000 MWh per annum or more. The scheme is designed to incentivise large organisations to take up cost-effective energy efficiency opportunities through reputational and financial drivers. The scheme has had a significant impact on the importance that businesses now attribute to saving energy and reducing their carbon footprints. It is estimated that the levies incurred will add around 10% to annual electricity spend. This is in addition to the
EES) also have to consider the impact of the current (and future) levy on their carbon emissions.
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