The Carbon Reduction Commitment

The scheme will be mandatory for Organisations with 6,000MWh of energy use from January 2010 through half hourly meters.  Once participants have been established through the 6,000MWh threshold of half hourly electricity use, all of their fuels will be subject to CRC trading.

Participants will purchase allowances at the beginning of the year (auction dates to be decided) based on their estimated consumption for the year ahead and surrender them at the end of the year based on actual consumption.

Self regulation of consumption will be allowed but 20% of all participants will be independently audited for verification. Although the allowances may be carried over for future years or sold back to the market, banking of allowances will not be allowed during the initial fixed price phase.

January 2010 will see a fixed price mechanism for purchasing allowances for three years with the likely price of £12 per ton of CO2.

2008 will be used as the ‘qualification year’ on which the initial consumption figures will be based; calculations of payments and position in the league tables will be based upon this.

From January 2013 the capped purchasing phase is planned whereby there will be a set number of allowances available for purchase. The revenue from the sale of allowances will be recycled back to participants proportional to their annual emissions and their position in the league table (bonus or penalty).  The exact nature of the League recycling payments are still to be confirmed.

For landlord – tenant relationships whoever pays the bill will be responsible for the relevant energy consumption for inclusion in their or their parent’s total organisational electricity usage.

Payment for allowances is being decided and is likely to be either at the time of auction or deferred for 12 months to ease cash flow.  Deferment is now especially likely in the present economic climate.

The bonuses or penalties through the league table are yet to be fully finalised but are expected to be plus or minus 10% in the first phase, 25% in the second phase and 50% in the third phase.

How Can We Help?

Assisting you to Manage and Comply with the Carbon Reduction Commitment

• We aim to provide “Client” with complete assistance in establishing baseline consumption figures (calendar year 2008) for all fossil fuels so that the required Carbon Allowances can be determined and potential costs established.  This analysis includes all sites within the Group including Parent companies and subsidiaries.
• To advise on areas where energy usage may be exempt from CRC such as existing / potential Climate Change Levy and EU-ETS agreements.
• Assist and recommend target savings within the remit of a Carbon Management programme with quarterly in-depth reporting of savings and action plans. 
• To provide financial business cases for any recommendations including possible CAPEX Loans / Grants and Enhanced Capital Allowances.
• Assist in the provision of smart metering so that all utilities consumption data can be analysed on a half hourly basis.
• Provide “Client” with information relating to CRC regulations and procedural guidelines.
• Complete required paperwork to purchase correct allowances at the correct times and at the correct prices.
• League table analysis ensuring that factors such as company growth / sales are accounted for to ensure best possible league placing.

An important part of helping your organisation to manage and exceed it’s CRC commitments is behaviour change; we offer a range of monitoring technology to help in the gathering and processing of data on how your buildings and your people use energy.  This information gathering is essential in helping to bring about change in energy consumption.  Our wireless technology allows a great deal of flexibility in the monitoring of energy consumption on a multi-site basis and is extremely cost effective.

Our pricing is based upon a fixed annual fee per building or site and our pricing matrix is available on request.

 

Resources:

Case Studies

Capability Statement

LK Group Brochure

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