The CRC Energy Efficiency Scheme is expected to reduce CO2 emissions from around 5,000 participating public and private sector organisations by approximately 11.6million tonnes per year by 2020 - the equivalent to taking roughly four million cars off the road.  The scheme is also expected to save organisations money through reduced energy bills – benefiting the economy by more than £1billion by 2020. Therefore it should be seen as a valuable business opportunity.

As the lead administrator for the scheme, the Environment Agency has a key priority to ensure that all organisations that qualify for the scheme register correctly and  those that need to provide an accurate annual report on energy consumption do so by July 2011.

We are working with organisations to help them understand their obligations and will provide as much guidance and information as possible. However, failure to comply with appropriate deadlines or providing inaccurate information may result in civil sanctions and fines. 

Compliance with the CRC Energy Efficiency Scheme will require financial, audit and carbon management adjustments to be made by Participant organisations. By planning and preparing for these now, CRC Participants will be in the best position to cut their energy bills, reducing upfront CRC payments, increase their ‘revenue recycling’ payout from the scheme and enhance their reputation.

Who qualifies for the scheme?

Any organisation that had at least one half hourly electricity meter during calendar year 2008 qualifies for CRC. If your organisation consumed at least 6,000 Mega-Watt-hours of electricity through all of its meters during 2008 (equivalent to an electricity bill of around £500,000), you will need to register for CRC as a Participant. You will need to monitor energy consumption and purchase allowances for the tonnes of CO2 your emit.

However, if your organisation consumed less than this amount of electricity, you will register for CRC as an Informed Declarer and make a simple information disclosure.  You will not have to purchase allowances.

There are serious penalties for eligible organisations that do not register with CRC by the end of the registration period.  A fixed fine of £5,000 will apply. Additionally, a £500 per day (for a maximum of 80 working days, together with a publication on non-compliance) will apply until registration occurs. It is therefore essential that qualifying organisations register before 30th September 2010.

The top ten sectors that will be affected by CRC are:

• Engineering
• Plastics/Chemicals
• Public Sector
• Packaging/Paper/Board
• Estates/Construction/Real Estate
• Hotels
• Food Manufacturing
• Retail
• Utility Companies
• Banks

Understanding CRC

It’s important to understand how CRC affects your organisation. You will need to decide who will be responsible for registering, compliance, ongoing data collection and CRC reporting. In most organisations, the day-to-day CRC management will be dealt with by an energy or facilities manager.

You will also need to make sure all the preparation has been made so that the right data is collected. Under CRC, you will need to report all of your emissions in the first year. Thereafter, you will need to monitor your fuel and energy use as well as reporting your CRC emissions to the scheme administrator at the end of each compliance year.

Reducing energy use

There are many steps organisations can take to cut energy use. Simple actions such as turning off lights and unnecessary equipment are important, but there are also more significant changes that can be made to cut energy use on a larger scale.

It’s important to look at where most of your organisation’s energy is used. For example, heating and hot water can account for up to 60 per cent of your organisation’s total energy costs. However, steps can be made to make heating more energy efficient. Firstly, it’s vital to replace inefficient boilers to the standard set by the latest Building Regulations. You can also install boiler sequencing controls to ensure only the minimum will be fired at the same time.

You can also explore energy efficiency technologies such as voltage optimisation, which prevents the excess use of energy. The Environment Agency has already used this technology at eight sites and made energy savings of 10-18 per cent at each one.

Due to this success, the Environment Agency will be introducing this technology at 33 of its offices prior to the end of 2010. This will cut our annual carbon emissions by between 700 and 900 tonnes - reducing energy bills by between £160,000 and £200,000. With these cost savings, this new scheme will pay for itself in just three to four years.

Case study: University of Manchester

The University of Manchester has implemented several energy saving initiatives. These include automatic metering, renovation and lighting projects, Building Management Systems (BMS) upgrades, and investigating Combined Heat and Power (CHP) options, so heat and electricity can be produced from a single heat source. The university has also upgraded all its boilers to high efficiency and added additional insulation to site pipe work.

The university’s energy team has also been looking at new lighting options, as old, inefficient lighting currently accounts for roughly 55 per cent of the university's total electricity consumption. As part of a large renovation programme, the design services team is also looking at energy efficient options, including double glazing, internal cladding, and insulation.

Through looking at where energy can be saved and making the most of green technology, the University of Manchester has shown that organisations can make significant changes that cut both costs and carbon use.

For more information about the CRC Energy Efficiency Scheme and to download the CRC Registration Guidance visit www.environment-agency.gov.uk/crc. For assistance or queries about the scheme contact the CRC dedicated helpdesk at crchelp@environment-agency.gov.uk.