CRC
Energy Efficiency Scheme - Registration Requirements
What is the CRC Energy Efficiency Scheme?
CRC stands for Carbon Reduction Commitment. The CRC Energy
Efficiency Scheme ("the Scheme") is a mandatory carbon emissions trading scheme
under the Climate Change Act 2008 and Carbon Reduction Commitment Order 2010 (SI
2010/768).
It is a new regulatory incentive to improve energy efficiency in large public/private
sector organisations. The objective is to reduce energy consumption (and in particular waste of energy) in order to achieve tough greenhouse gas emissions targets.
Carbon emission allowances will be traded under the Scheme and participants will
need to purchase allowances according to their projected emissions. These will be
initially sold by the Government. Proceeds from the sale of the allowances will
be distributed to the Scheme participants and so the better performers under the
Scheme will find that they enjoy higher rewards than the worse performers. Better
performers will also save money by reducing their energy bills. The Scheme administrator,
the Environment Agency, will also publish a performance league table showing comparative
performance of all organisations in reducing emissions.
When does the Scheme start?
The Scheme has already started (April 2010) and organisations to which the Scheme
applies must register by 30 September 2010.
The trading of carbon emissions allowances will commence in Spring 2011.
Who must comply with the Scheme?
The Scheme is aimed at those organisations which use the most energy in the UK and
which are normally faced with electricity bills of £500,000 or more per year. This
will include large businesses, local authorities and central
government departments.
All UK central Government departments and Devolved Administrations must participate
regardless of their electricity consumption – these are termed “mandated” participants.
It is estimated that around 20,000 large public and private sector organisations
will be involved in the Scheme in some way.
Do you need to register?
Yes, if two tests are met in relation to the calendar year
ending 31 December 2008. In summary these are:
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the usage of more than 6000 MWh (megawatt hours) of electricity;
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the buying of electricity through a meter "settled on the half hourly market" (the
electricity bulk supply market which is re-priced at half hourly intervals according
to supply and demand) |
Those organisations which, during 2008, had at least one settled half hourly electricity
meter but did not consume 6000 MWh or more of electricity supplied on the half hourly
market will have to make an "information disclosure".
How do you register?
By applying on-line to the Environment Agency. A participant also needs to submit
details of its 2008 electricity consumption together with a registration fee of
£950. In future years, a fee of £1,290 per annum will be payable. The Environment
Agency has issued detailed guidance on how to register and has produced a useful
checklist for registration as a CRC participant. A link to the Environment Agency’s
website follows at the end of this article.
Does the Scheme apply only to electricity consumption?
No, the Scheme applies to all
types of energy consumed, but for eligibility to participate,
only electricity consumption is examined.
The Scheme relates to all energy consumption at fixed locations (ie to heat, cool,
ventilate and light buildings and operate processes within the buildings). The Scheme
does not apply to mobile consumption eg fuel required to run a fleet of vehicles.
What electricity consumption information is needed for
registration?
The electricity consumption data relevant for registration is the organisation's
electricity consumption for the year 1 January – 31 December 2008. Data from all
the relevant electricity supply meters must be included. Most of this is likely
to be recorded by meters supplying the organisation directly representing energy
which the organisation itself consumed, and the billing information for these will
contain details of the amount of energy supplied. However there are some areas where
checking or further investigation to identify or exclude the relevant data may be required, for example:-
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meters read automatically by remote control |
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supplies purchased indirectly eg as part of a bulk purchase consortium or under
facilities management arrangements (where the FM service rather than the energy
itself is purchased) |
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supplies purchased by the organisation as landlord but consumed by tenants |
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supplies consumed by other members of the organisation's group |
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for authorities responsible for schools, to include the consumption by their schools,
including academies |
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exclusion of supplies:- |
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to domestic premises |
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used for transport purposes |
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to domestic premises |
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covered by a Climate Change Agreement (entitling the user to receive a discount
from the Climate Change Levy of up to 80% in return for meeting energy efficiency
or carbon saving targets) |
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covered by the EU Emissions Trading System (which already covers energy intensive
industries such as power generation, steel and cement manufacturing) |
Where an organisation has subsidiaries that would be eligible to participate in
the Scheme in their own right, these “Significant Group Undertakings” may be disaggregated
from the parent organisation’s total energy consumption figure and dealt with separately
(provided that this does not allow the parent organisation to escape from the requirement
to participate).
What happens if I do not comply with my obligations
under the Scheme?
Organisations to which the Scheme applies must register as participants with the
Environment Agency by 30 September 2010.
There is a range of penalties to ensure compliance with the Scheme.
Failure to register, if required to do so, may attract an immediate fine of £5,000
followed by a daily penalty of £500 per working day up to a maximum of £40,000.
If by that point, an organisation still has not registered, it may be subject to
further fines and penalties for non-performance of its obligations under the Scheme.
Ongoing failure to cooperate with the Environment Agency or the making of misleading
statements may constitute an offence both by the organisation as a corporate body
and by the director or other responsible officer punishable by imprisonment and/or
a fine.
For more information please visit:
http://www.environment-agency.gov.uk/business/topics/pollution/98263.aspx
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For More Information Contact:
Peter Hill or Kris Scholfield
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email: Peter
Email:
Kris
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