How much do you know about the CRC Energy Efficiency Scheme?
The scheme won’t affect all organisations – at least not in its present form – but If you are a large user of energy, then you may well be included.
Who is Affected?
The range of industries that the government expect to be involved with the scheme is quite broad, encompassing the likes of:
- Public sector organisations
- Hotels and restaurants
- Food manufacturing
- Engineering
- Printing
- Retail
- . . . and more
What are the Objectives of the Scheme?
The UK Government has designed the scheme as one of its means of reducing carbon dioxide emissions by at least 80% from their 1990 levels by 2050.
Large organisations, whether in the private or public sectors that had a half hourly meter during 2008 have to register for the scheme. That includes around 20,000 organisations in the UK.
The period when organisations must register began at the start of April 2010 and finishes at the end of September. There are sanctions for any organisation that fails to register on time or that provides inaccurate information, so now is the time to act.
Of the 20,000 who register, about 5,000 will be “Participants”. These are the organisations who consumed at least 6,000 mega-watt-hours of electricity during 2008. The remainder, who used less energy will be known as “Information Declarers”.
Participants will be required to monitor their energy consumption and purchase allowances from the Government at the start of each reporting year for the amount of Carbon Dioxide they emit through energy consumption.
Information Declarers will not be required to purchase allowances from the Government but they will have to report information about their energy usage.
Is this just Additional Cost on Employers?
At first sight the scheme might appear to be an additional expense on businesses and other organisations. However, this all depends on how each one performs.
The overall scheme is not intended to be a Government revenue earner. In fact it is intended to be revenue neutral.
Income from selling allowances will be redistributed to Participants on the basis of their position in the Performance League Table. Consequently, those organisations that are more successful in reducing their energy usage (and therefore carbon dioxide emissions) can expect to receive a correspondingly greater proportion of the returned fees. They will also save on their energy bills and reduce the amount of allowances they need to purchase in subsequent years. In fact, for those who do well, the scheme could result in considerable financial benefit.
It’s all designed to be competitive and those who perform best will benefit at the expense of those who perform less well.
An additional incentive is that the Government will publish the Performance League Table. For Participants, this could have a significant impact on their reputations amongst the public and those with whom they do business.
Future Changes
While the scheme is being phased in, allowances will be sold at a fixed price, with no limit on the number that can be purchased.
However, things will be even more interesting when the scheme becomes fully operational. After the initial three years, a maximum limit will be imposed on the total number of allowances offered for sale by the government. Participants will then be required to bid for allowances in a form of auction, so the cost will no longer be fixed.
The result of these changes will be even greater incentives to become energy efficient, meaning greater rewards for the most efficient and increased costs for the less efficient.
What do You Need to Do?
If you are one of the organisations affected by this scheme, then you have a six month window in which you must register with the scheme (by 30th September 2010), or face penalties, including fines.
In addition, energy efficiency is going to become ever more important in moving you from net cost to net income. Consequently, it would be a wise move to look seriously at your energy usage and how you can reduce it. The highest rewards are likely to go to those who do so sooner rather than later.
You can read much more about the scheme on the government’s website at
http://www.environment-agency.gov.uk/business/topics/pollution/98263.aspx
Visit the EDP Health Safety & Environment Consultants website for more information about outsourcing Health and Safety , Health and Safety Consultants, health and safety training courses: www.edp-uk.com
Tags: carbon reduction commitment, CRC, CRC energy efficiency scheme, energy efficiency, health and safety consultants, health and safety training, outsourcing health and safety, reducing carbon dioxide emissions