CRC Energy Efficiency Scheme -- Final Changes
Ever since the concept of the CRC Energy Efficiency Scheme was announced, the UK government has been proactive in seeking feedback from the community and the companies involved. The project is now ready to get underway and kicks off in April of 2010. Certain surveys, however, have shown that a number of organizations are yet to engage and do not fully understand what they need to do.
The CRC Energy Efficiency Scheme is mandatory for those organizations that use more than 6000 MWh of electricity, which roughly equates to about 0.5m in annual energy bills. 5000 or so businesses must comply and should clearly note that the terms for qualification determine an analysis of 2008 consumption figures. 2009 was the year for preparation and those companies that are still behind are taking significant risks.
Although the CRC Energy Efficiency Scheme officially commences in April of 2010, the succeeding cycle, incorporating three key phrases, will be just a precursor of what is to come. Eventually, the scheme will operate on an auction basis, with organizations being forced to trade carbon emission allowances within a capped market, with clear ramifications for those companies not able to achieve efficiencies.
When the CRC Energy Efficiency Scheme was first proposed, it was known as the Carbon Reduction Commitment and this name has now been officially changed during final consultations. Originally, the government had proposed that organizations purchase their annual carbon emission quota each year, with the first purchase due in April 2011 relating both to 2010 and 2011 emissions. This effectively doubled the cash commitment at that point in time, but this suggestion has now been abandoned.
The CRC Energy Efficiency Scheme is intended to be revenue neutral, with organizations receiving back the funds allocated toward the purchase of carbon allowances. However, to make the scheme work, companies will be compared and inefficiencies tabled. Those who over perform will receive bonuses in addition to their refund, while those who fail to perform will receive penalties.
A survey in April of 2009 suggested that 60% of businesses affected by the CRC Energy Efficiency Scheme had done little to prepare and many suggested that they would not commence action in earnest to reduce their carbon emissions until the scheme really cranked up in 2011. This is a mistake, as there are benefits for early actors. Within the first phase, organizations that sign on to the Carbon Trust Standard or install automatic smart meters will figure highly on the initial league table and enjoy significant returns over those who don't.
It seems inconceivable that some of these major organizations could be unaware of the importance of taking early action. There could be very considerable financial implications for the organization that is unable to achieve optimum efficiencies, quite apart from the lack of "common sense" decisions associated with saving money in the first place. Any attempts to reduce energy use can only benefit the company's bottom line.
It is unlikely that any further changes will be made to the CRC Energy Efficiency Scheme by the British government and in April 2010 companies must officially register their participation as part of the first phase. The year commencing April 2010 is known as the "footprint year" and energy use during this period will form the basis for calculations in subsequent periods.
The CRC Energy Efficiency Scheme is mandatory for those organizations that use more than 6000 MWh of electricity, which roughly equates to about 0.5m in annual energy bills. 5000 or so businesses must comply and should clearly note that the terms for qualification determine an analysis of 2008 consumption figures. 2009 was the year for preparation and those companies that are still behind are taking significant risks.
Although the CRC Energy Efficiency Scheme officially commences in April of 2010, the succeeding cycle, incorporating three key phrases, will be just a precursor of what is to come. Eventually, the scheme will operate on an auction basis, with organizations being forced to trade carbon emission allowances within a capped market, with clear ramifications for those companies not able to achieve efficiencies.
When the CRC Energy Efficiency Scheme was first proposed, it was known as the Carbon Reduction Commitment and this name has now been officially changed during final consultations. Originally, the government had proposed that organizations purchase their annual carbon emission quota each year, with the first purchase due in April 2011 relating both to 2010 and 2011 emissions. This effectively doubled the cash commitment at that point in time, but this suggestion has now been abandoned.
The CRC Energy Efficiency Scheme is intended to be revenue neutral, with organizations receiving back the funds allocated toward the purchase of carbon allowances. However, to make the scheme work, companies will be compared and inefficiencies tabled. Those who over perform will receive bonuses in addition to their refund, while those who fail to perform will receive penalties.
A survey in April of 2009 suggested that 60% of businesses affected by the CRC Energy Efficiency Scheme had done little to prepare and many suggested that they would not commence action in earnest to reduce their carbon emissions until the scheme really cranked up in 2011. This is a mistake, as there are benefits for early actors. Within the first phase, organizations that sign on to the Carbon Trust Standard or install automatic smart meters will figure highly on the initial league table and enjoy significant returns over those who don't.
It seems inconceivable that some of these major organizations could be unaware of the importance of taking early action. There could be very considerable financial implications for the organization that is unable to achieve optimum efficiencies, quite apart from the lack of "common sense" decisions associated with saving money in the first place. Any attempts to reduce energy use can only benefit the company's bottom line.
It is unlikely that any further changes will be made to the CRC Energy Efficiency Scheme by the British government and in April 2010 companies must officially register their participation as part of the first phase. The year commencing April 2010 is known as the "footprint year" and energy use during this period will form the basis for calculations in subsequent periods.
About the Author:
Daniel Stouffer has a lot of information about the CRC Energy Efficiency Scheme and how a visit to www.verisae.com will aid you.
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