Summary

The Carbon Reduction Commitment Energy Efficiency Scheme is a statutory scheme coming in to operation from 1^st April 2010. Organisations qualifying for this scheme have until then to ensure that their carbon emissions accounts are within 5% accuracy.

Qualification for the scheme is based upon an organisation’s emissions through Half-Hourly Metered electricity during 2008.

Government released details of the final Carbon Reduction Commitment (CRC) regulations on 26^th January 2010.

The CRC will apply a Cap and Trade mechanism on Greenhouse Gas emissions via an auction and trade scheme beginning in April 2011; when emissions allowances for 2011 emissions will have to be bought.

Who will it affect?

Organisations, including schools, will be included in CRC when they have used more than 6,000MWh (about £500,000) of 'half-hourly metered' electricity during 2008; those over 3,000MWh will have to register, monitor and disclose their information to the regulator.

Exemptions

To minimise administrative overlap, the scheme will cover emissions outside of Climate Change Agreements (CCAs) and outside the direct emissions already covered by the EU Emissions Trading System (EU ETS). In addition, any part of an organisation with more than 25% of their energy use emissions covered by a CCA will have their remaining emissions exempted from the scheme.

Qualification Assessment

• One half-hourly (HH) meter settled on the HH market
• Organisation-wide HH electricity consumption more than 6,000MWh during 2008
• Half-hourly electricity use must include:
• Supply by settled half hourly meter
• Supply by reference to a settled half hourly meter
• Remotely read supply —where supply is through a meter capable of producing HH data and the supply is, or has been read remotely by the customer any time during 2008

If an organisation qualifies, subsequent measurement will include all non-domestic supply meters which are capable of recording maximum electricity demand.

Qualification Baseline

Organisations will be required to calculate their electricity use based on information provided by their utility suppliers. Our experience is that actual usage can be less than usage information provided by utility suppliers. Aardvark recommends that the process of gathering and verifying actual electricity use during 2010 begins immediately.

Affected Organisations

The CRC will target UK emissions of the highest parent organisation. If you are the highest parent organisation you will need to include the electricity use of your subsidiaries to assess whether you are included in the scheme. You will also be responsible for reporting on your total energy use emissions, including those of your subsidiaries.

Scheme Roll-Out

Once the scheme starts, it is proposed that monitoring and reporting will be required of emissions from:

• all fixed point energy sources (electricity, gas, other) excluding a 10% de minimis and emissions covered by the EU ETS and by the Climate Change Agreements
• Emissions assigned to counterparty-to-supply contract

2008	Qualification year
2009	Consultation on the CRC Draft Orders, Identification of CRC participants, In September 2009, the Environment Agency — who will administer the CRC — will contact all UK billing addresses with settled half hourly meters providing them with Qualification Packs.
2010	Scheme begins with a three year Introductory Phase. The first compliance year (April 2010 - March 2011) is a 'Footprint' Year. The first 6 months of the Footprint Year is also the registration period. Organisations who qualify must register or make an information disclosure by 30 September 2010. A £5,000 will be imposed on organisations who fail to do so by the deadline
2011	Second compliance year, first sale of allowances takes place in April for 2011/12 emissions.
2012	Third compliance year
2013	First capped phase begins. Auctioning of carbon allowances begins