ENERGY
who don’t respond to change well. It can also the next phase of the EU ETS. The Trust also Being efficient
deliver significant cost savings and an improved predicts that it will have a major impact on being energy efficient is a core element
corporate image. The CRC even offers a bonus the cost of energy and could raise the price of the uK Climate Change Programme
for early adoption if you can demonstrate three of carbon credits in the scheme to a high of
- a movement by the government to
years of an advanced implementation plan to €50/tCO2.
promote energy efficiency in businesses
reduce energy and carbon. The demand for credits will depend on
within the uK.
industry is striving to use less energy
Along with the carrot, the government the approach each government takes to cut
and energy savings of between 10% and
has its stick and current studies indicate that emissions by 20% and generate 20% of energy
20% can be made by employing low-cost
as much as 10% of the CRC’s audience are from renewables. If the focus is on energy
to no-cost measures.
not going to comply with registration. The efficiency, there will be a higher demand for
there are a number of policies and
Environment Agency will impose a fine on credits. If the focus is on generating energy governmental bodies already in place to
companies included in the scheme that do not from renewables, demand for credits will be help businesses and the public sector
have a CRC account by the deadline. The fine lower.
improve their energy efficiency, these
increases if registration still hasn’t taken place As for Phase III, keep in mind that changes
include:
by the date of the first sale of allowances in will filter through to organisations not directly
n Carbon trust - SMe loans scheme
n Carbon trust - Salix revolving loans
April 2011. At this point, the company will involved in the scheme in the form of higher
fund and grants scheme
be considered to be non-compliant. Then electricity prices. Reports predict increases
n building regulations
the second stage of penalties kick in and a between 1p and 2p per kWh.
n energy Performance of buildings
moderate fine per tonne of carbon will be Higher oil and gas prices affect ETS carbon
Directive (ePbD)
imposed if the emissions are reported by credits by encouraging generators to switch n Regional and local advice and
August 2011. to cheaper, but more carbon-intensive coal for information programmes
It can get worse, as missing the August fuel and this, in turn, requires the purchase
n Product and procurement standards,
2011 deadline will mean the loss of a firm’s of more carbon allowances. This means that
including Quick Wins
entire revenue recycling payment for non- uncertain oil and gas markets need to be
n Climate Change levy
n enhanced Capital allowances.
compliance. If two or three months lapse after watched carefully. The one certainty is that
Currently, many organisations are
that, the offending organisation pays £25/ emissions will fall as tighter allowances are
exempt from formal mandatory carbon
tCO and is forced to buy allowances on the introduced to more and more participants.
constraints, but it will only be a matter
secondary market to cover emissions. If the uptake of renewable energy projects
of time before all businesses become
To avoid that outcome, the best practice is significant, then the price of carbon needs carbon constrained under government
option would be to run a compliance process to be in the region of €35-45/t and a recession legislation. it is therefore timely for
plan alongside the energy management - with will weaken the EU’s desire to contend with
companies to start looking at voluntary
the objective target of getting below the these levels. However, a strong economy,
climate approaches.
CRC threshold to. This covers you for any coupled with high energy prices, will set the
What steps you can take? the first
stage in the process is to develop a
eventuality and saves money immediately as stage for significant investments in low-carbon
corporate social responsibility statement
cuts are made according to plan. It’s a win-win technologies.
that outlines the targets and time
approach, and should be easily accepted by all
frames, and sets out the methodology to
your stakeholders.
Don’t let the economy
achieve these targets. Start by looking
For those organisations that find themselves at the direct emissions of your operation
included in the CRC, acting early is, without stop progress and also the indirect emissions through
question, the best option. You may ask what Although recessions are up there with death
your supply chain. then create a policy
if I put off energy efficiency until the scheme and taxes when it comes to inescapability, the
and implement actions that will help you
actually starts and why start now if energy economic downturn will hopefully not put the
reduce your emissions. When there
is no scope to reduce your emissions,
has to be reduced later? Well, this is a false brakes on climate change strategies. This is
consider carbon offsetting.
economy and won’t work. Energy efficiency because climate change strategies are closely
to address climate change and ‘go
simply doesn’t happen overnight and the aligned with cost-saving programs. Also,
green’, companies have three broad
ability to efficiently and effectively lower funding for climate initiatives is easier to raise
options: they can purchase renewable
energy usage increases if you have a plan in as they are predominantly equity-funded and energy from their supplier; they can
place. And this takes time. not debt-funded - so early adoption offers its reduce their energy consumption
rewards.
through energy efficiency measures; or,
EU ETS now and in
When the economy does pick up, the
they can simply invest in carbon credits
benefits of well-executed climate change
to offset their emissions. each option
the future
has a different cost-benefit scenario and
strategies will become more evident to the
companies can link the various options;
The European Commission’s Impact greater market. Renewed consumer and media
for example, 30% purchasing renewable
Assessment estimates that carbon prices will interest will move from the current financial
energy, 50% energy efficiency and 20%
rise from €26/tCO2 in 2013 to €39/tCO by crisis back to the biggest global challenge of
carbon credits, to meet their budgetary
2020 and some studies have projected even all - global warming. and corporate social responsibility
higher prices. The Carbon Trust is urging targets.
organisations of all sizes to prepare now for
n
www.energyquote.co.uk
SuStainable SolutionS December/January 2009 25
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