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Carbon Reduction
The starting pistol has been fired and
the Carbon Reduction Energy Efficiency
Scheme, commonly referred to as the
Carbon Reduction Commitment or
CRC, is moving into its second Phase.
We don’t yet know the exact threshold
for inclusion in Phase 2 but it is expected
to encompass many more businesses than
Phase 1, including firms that have grown
organically or merged since CRC was
introduced in 2010.
As a rule of thumb, any firm spending
in the region of £250,000 or more per
annum on energy or consuming more
than 50% of the current (Phase 1)
threshold of 6,000MWh should take a
careful look at what impact the Scheme
could have on its business.
Even though the threshold is yet to be
confirmed, Phase 2 has in effect started
because the qualification year – the
year for which a business’s consumption
determines whether or not it is to be
included – is already under way (April
2012-April 2013).
The good news is that, in theory, Phase
2 will make participation in the scheme
simpler, though many commentators
remain to be convinced that the changes
will be meaningful in practice. Reducing
the number of fuels covered from 29 to
Act now to assess
how CRC Phase 2 will
impact your business
four is of little benefit if you only use gas
and electricity.
Even so, easier reporting requirements
will be welcomed by all concerned. Energy
and climate change secretary Ed Davey
says millions of pounds will be saved as
participants see their administrative costs
cut by almost two-thirds compared to
Phase 1.
Practical measures
What businesses should be focusing on
now are practical energy-saving measures
rather than paperwork.With pressure
from board-level decision-makers to
cut costs and CRC Phase 2 in the offing,
it makes no sense to delay measuring
energy consumption until the last minute.
The general consensus is that the practical
processes required to comply with CRC
will not change substantially in Phase
2, so it is logical to start to review and
prepare business processes now: not least
because the desired outcome and original
purpose of the scheme is to find ways to
reduce consumption.
At energyTEAM we like to say: “The
sooner a total energy management
approach is in place and starts to have
an effect on a business’s bottom line, the
better.”
As CRC participation involves
everyone within a business, it is important
to engage with the process at the earliest
opportunity. In recent months we have
conducted numerous Impact Assessments
for our clients and we advise any large
firm to take a similar, hard look at how
they might be affected.
The energyTEAM approach to CRC
Impact Assessments is to assess every
branch location and department within
an organisation and explore what impact
CRC will have on business operations,
from legal and finance to business
management and marketing.
Only when you know the task ahead
and each person has a clear idea of what
needs to be done, and when, does the
challenge become manageable. An Impact
Assessment should focus on giving every
individual a clear understanding of how
CRC will affect their department so that
they can plan and resource accordingly.
The right thing
Saving energy is the right thing to do
regardless of the CRC and not only
because of the financial savings. Today,
many invitations to tender will ask about
your track record on energy efficiency.
Approaching CRC as a proven
methodology for reducing costs,
rather than as an irritating and costly
obligation, can deliver massive savings
for an organisation but only, of course, if
you couple it with a plan to act on the
information it provides. That is where
firms like energyTEAM come in.
When we visit companies around
the country who may be on the cusp
of joining Phase Two, we tend to find
they are concerned that they lack the
resources and expertise to comply. In
the current financial climate, many
organisations do not have the budget to
employ dedicated energy managers, even
though management teams expect them
to be on top of the situation. Employing
specialists who offer sound and honest
advice is a good starting point.
Even if your business doesn’t
ultimately fall within the scope of CRC,
you will still benefit from reduced costs
and a smaller carbon footprint.
www.energyteam.co.uk
Brian Rickerby of energy consultancy
energyTEAM argues that now is the time to
start measuring energy use, whether or not
your business ultimately falls within scope of
CRC Phase 2.
Brian Rickerby