WIREDGOV

Under Embargo: Energy efficiency scheme will save cash and carbon

News Release issued by the COI News Distribution Service on 06 October 2009

Embargoed until 00:01, 7th October 2009

Reducing energy use will save organisations a total of £1billion and more than 4MtCO2 each year by 2020

The final details of the Government's scheme to save organisations money on fuel bills and to reduce carbon emissions have been unveiled today by the Department of Energy and Climate Change.

The Carbon Reduction Commitment Energy Efficiency Scheme is a new regulatory incentive to improve energy efficiency in large public and private sector organisations. Large energy users in business and the public sector will be required to take part in the scheme from 1st April 2010.

Following extensive consultation with businesses and trade bodies, DECC has made some improvements to the scheme:

* To smooth the introduction of the scheme and to help ease the upfront costs, organisations will only have to report emissions in the first year (2010/11). In subsequent years organisations will have to buy allowances corresponding to their emissions from energy use, and then surrender them by the end of the year.

* In the second year (2011/12) extra weighting will be given to organisations which take action early to improve energy efficiency.

* Recognition will be given to organisations which use onsite renewable energy like wind turbines or solar panels by publishing the increased carbon savings from such measures.

* Organisations will be given greater flexibility in how they participate. Subsidiaries who are large enough to qualify in own right (at least 6000MWh) may opt to do so separately from their organisational group.

* Given the primary focus of the scheme is energy efficiency, the CRC will now be known as CRC Energy Efficiency Scheme.

Energy and Climate Change Minister Joan Ruddock said:

"The UK is leading the way in tackling climate change and in the move to a low carbon economy. Organisations and the public sector must play a central role including all government departments, regardless of size.

"Large organisations have huge potential to achieve cost-effective energy efficiency savings. There are clear benefits from positive, immediate action to tackle climate change. Investment that takes place in the next few decades will have a profound effect on the climate in the second half of this century and in the next.

"The CRC Energy Efficiency Scheme will help organisations to become more energy efficient, to save significant sums of money on fuel bills, and to show customers, clients and competitors that their organisation is a leader in tackling climate change."

The CRC will help to ensure that large organisations play their full role in contributing to our emissions reductions of at least 34% on 1990 levels by 2020 through improved energy efficiency.

The scheme is mandatory and will save participants around £1billion per year by 2020 through cost effective energy efficiency measures that are not yet being taken up.

By 2020 the scheme is expected to have delivered emissions savings of at least 4.4 Mt CO2 per year.

The scheme will target organisations whose annual half hourly metered (HHM) electricity use is at least 6,000 Megawatt hours (MWh) will qualify for the scheme - typically those that spend £0.5 million a year on electricity. The Environment Agency will publish the qualification and registration guidance for potential CRC participants by November.

The basic timeline for CRC remains;

First phase - The three year 'Introductory Phase' starts in April 2010. An unlimited number of allowances will be available at a fixed price of £12/tCO2. From the second compliance year onwards, participants will annually have to purchase allowances, monitor energy use, report emissions and surrender allowances. Participants will also receive a revenue recycling payment each year.

Phase 2 -From 2013 Government will cap the number of allowances available each year and all allowances will be auctioned. The cap will be set taking into account advice from the Committee on Climate Change which they will provide in 2010.

Case Studies

The below organisations fall within the remit for CRC and would be happy to be contacted for media purposes;

* HILTON HOTELS Press Office contacts 020 7856 8076 or email: Jules.Kerby@hilton.com

* GUY'S AND ST THOMAS' NHS FOUNDATION TRUST
Press Office contacts 020 7188 5577 or email: press@gstt.nhs.uk

* THE NATIONAL THEATRE
Press Office contact details: 020 7452 3235 or email: press@nationaltheatre.org.uk

* LONDON FIRE BRIGADE

Press Office contacts: 020 8536 5922 or email: press@london-fire.gov.uk

Notes to editors

1. You can find the Government Response to the consultation on the Draft Order to Implement the CRC at; http://www.decc.gov.uk/en/content/cms/consultations/crc/crc.aspx

2. Guidance for scheme participants will be published by the end of October by the Environment Agency in conjunction with the scheme administrators in the Devolved Administrations, and after consultation with the Devolved Administrations and DECC. Contact crchelp@environment-agency.gov.uk for more information.

3. CRC is a UK wide scheme and the policy has been developed by the Department of Energy and Climate Change, the Scottish Government, the Welsh Assembly Government and the Department of the Environment Northern Ireland working in partnership. In this document, Government refers collectively to the UK and Devolved Administrations.

4. The registration window for CRC will begin in April 2010, and last until the end of September 2010.

5. Participating organisations will have to register with the Environment Agency who will administer the scheme. The Government is already providing advice and financial incentives to help organisations take practical steps to improve their energy efficiency through the Carbon Trust and Climate Change Agreements.

6. All organisations whether they are taking part in Climate Change Agreements, the CRC, or are simply small organisations outside any regulatory scheme wishing to cut their energy bills can find assistance through the Carbon Trust which provides advice to organisations on what practical steps they can take to improve energy efficiency, and also help to develop low carbon products and services.

7. CRC provides the policy framework to ensure the existing best practice of our leading organisations will be more widely taken up, and in which carbon becomes correctly considered, reported and valued. The scheme sits alongside the Voluntary Reporting Guidance, published by Government last week explaining how all organisations should measure and report their greenhouse gas emissions, including those organisations captured by the CRC.

8. As part of our Impact Assessment we have done some modelling of various scenarios based on uncertain abatement potential incentivised by an assumed allowance price trajectory to 2020. The variation in figures has led us to conclude that there are substantial energy efficiency savings to be made in this sector. We intend to set a cap which is challenging but achievable, after taking into account the advice of the CCC.

Department of Energy and Climate Change
7th Floor, 3 Whitehall Place, London, SW1A 2HD
Press enquiries +44 (0)20 7270 5217 Public enquiries +44 (0)300 060 4000
Textphone +44 (0)20 7215 6740 (for those with hearing impairment)

Press Notice Reference: 2009/110

Contacts:

Department of Energy and Climate Change
nds.decc@coi.gsi.gov.uk

Philippa Heap
Phone: 0300 068 5218
philippa.heap@decc.gsi.gov.uk