CRC opportunities

The Carbon Reduction Commitment Energy Efficiency Scheme (CRC) has brought with it some fundamental challenges for the public sector since it came into effect on 1 April 2010. However, whilst compliance obligations exist, there are also real opportunities present for Local Authorities and Government Departments to turn its introduction to their advantage. With energy managers under more pressure than ever to reduce energy costs, British Gas Business is here to help with a clear and expert understanding of the energy challenges faced by the public sector, helping companies measure, monitor and manage their energy use.
    
Under the CRC, companies are now legally required to reduce their CO2 emissions and measure, manage and report their energy consumption and emissions data, purchasing carbon allowances in relation to those emissions. However the implications of the CRC cover not just environmental performance, but also have financial and reputational dimensions which will only increase over time. Now is the time to build the right team so compliance becomes part of your organisation’s wider objectives.

The financial implications
From a financial perspective, it’s critical to involve senior management and financial functions at an early stage given the up-front cost and cashflow implications of purchasing allowances.  
    
Subsequently, any reductions in carbon emissions should – in the medium term – result in cost savings from reduced energy consumption and bonuses accrued through the CRC. Conversely, increases in carbon emissions can prove costly in terms of increased energy costs and the penalties.
    
The financial implications become more pronounced over time and participating organisations will need to be mindful of and prepare for this. Whilst bonuses and penalties start at +/-10 per cent they increase to +/-50 per cent by 2014/15. So, organisations proactively reducing their energy consumption are likely to receive significant recycle payments; those who fail to do so may experience much larger cash implications.

Reputation management
Reputation management should not be overlooked. The annual October publication of the CRC performance league table will highlight the best and worst performers, so communications and corporate responsibility teams should be involved to manage the repercussions. The onus will be on organisations to defend themselves where necessary, and actively promote their credentials to a full range of audiences, depending on where they rank in the table. With the first league table due in October 2011, it’s critical to identify the likely scenario as early as possible and prepare to respond.
    
Now is the time to take advantage of two early action metrics; installing smart meters and applying for the Carbon Trust Standard, an accreditation which rewards organisations that demonstrate absolute or relative reductions in emissions over the past three years, and takes into consideration current and future plans to reduce energy usage.

Building the right team
Of course, central to the CRC management team should be an environmental manager, who takes responsibility for managing the CRC process as part of a carbon management strategy. Their challenge is great – working with a multi-disciplinary team to deliver carbon reductions, which meet both the organisation’s goals and those of the CRC.  One of the key challenges will be the need to monitor emissions from a variety of sources, including electricity, fuel and diesel, so internal co-ordination will be crucial.  
    
Few organisations have the resource to take this on in addition to their day job. So, to help organisations affected, British Gas Business has launched the CRC Manager service to ensure full compliance with the regulations, and remove the administrative burden, whilst helping customers improve their league table position. The CRC Manager will collate energy data; monitor energy usage; forecast annual carbon emissions; as well as prepare evidence packs, carbon management reduction strategies and to make energy-efficiency investments, saving both time and money.
    
British Gas Business is already helping many government organisations to manage the challenges and realise the benefits of the CRC scheme – from initial assessment, advice and registration, through to smart metering and monitoring, and active carbon reduction applications.
    
As the UK’s leading supplier of smart meters, British Gas Business is best placed to provide advice and support on energy and fuel efficiency having received the Carbon Trust Standard and ISO 14001 accreditation, coupled with an expert energy and carbon reduction service – Energy360. British Gas Business is also helping CRC participants with the early action metric, for example Wolverhampton City Council where we have installed smart meters which not only increase their early action score but also energy saving.

For more information
For further information on British Gas Business or CRC, please visit www.energy360.co.uk/crc