Transcript Document

Carbon Reduction Commitment
AEA is the Government adviser contracted to
develop the CRC scheme
Daniel Waller, Knowledge Leader, Carbon Management
0870 190 6297, [email protected]
A world leading
energy and climate
change consultancy
About AEA
• Global business supporting public
and private sectors
- Energy and climate change
- Air and water quality
- Risk management and due diligence
- Resource efficiency
- Sustainable transport
- Innovation and knowledge transfer
- Sustainability
- Information technology and
environmental management
AEA is supporting
DECC as it develops
the regulations
for CRC
What is the CRC?
• Mandatory auction-based emissions trading
• Climate Change Bill commitment
• Public and private sector
• Applies at highest UK parent organisation level
• Purchase allowances to match emissions from
Government at 12/tCO2
• Receive money back +/- bonus/penalty
dependent on relative performance
Qualification Process
Mandatory half hourly
metered (HHM) electricity?
-
No
You are not covered
Yes
Total HHM electricity use >
6000MWh/year?
No
You are not covered
Yes
You are covered
Declare qualification status
April – Sept 2010
Emissions responsibility
Person that is the customer of a supply contract and receives
the supply from the energy provider under that contract
• Landlords may be responsible for tenant emissions
• Energy Service Companies may be responsible for customer emissions
• Key issues for landlords:
• Uncontrolled CRC exposure and possible net costs
• Incentives for emissions savings
• Cost recovery or measures to reduce exposure
Franchises
Agreement between parties where franchisee sells or distributes
goods, or provides services, and equips or presents its premises as
instructed by “the franchisor”
• Franchisor takes on CRC liability (Responsible Person)
• Franchisee has “reasonable assistance duty” (Associated Person)
• Particularly relevant for:
• Fast food, retail, telecoms, petrol stations, car dealerships,
trade associations, some Universities
• Challenges:
• Data management
• Scheme economics – pass through of costs / benefits
• Delivering energy management
Principal Subsidiaries
Parent Organisation
Subsidiary 1
(>6,000 MWh in 2008)
Subsidiary 2
-
Subsidiary 3
-
• Principal subsidiaries
- Identified in reporting and annex to league table
- Eligible for baseline updates - “Designated Changes”
Subsidiary 4
-
Joint Ventures / PFI
Parent Organisation
Subsidiary 1
(>6,000 MWh in -2008)
Subsidiary 2
-
JV 1: 50/50 Ownership
-
JV 2: 70:30 Ownership
-
• Joint ventures/PFI
- Where no majority shareholder Company participates in its own right – if it qualifies
- Otherwise grouped with majority owner
What’s covered - ‘Footprint’
All energy consumed for non-transport purposes
•Electricity
•Gas
•Oil, diesel etc
CCA emissions
Core sources
EUETS emissions
Non-core sources
Based on emissions in the period April 2010 to March 2011
Reporting will be by 31st July 2011
Annual reporting
• Financial year compliance cycle
• Evidence pack and source list
• Apply rules for renewable generation, export of power from own
generation, heat from CHP
• Report this by end July after the year end and surrender allowances
• Audit not verification
Civil Penalties
• Failure to register (£5,000 + £500 per day)
• Failure to disclose information (£1,000)
• Failure to provide footprint report (£5,000 + £0.05/tCO2/day for 40 days)
• Failure to provide annual report (£5,000 + £0.05/tCO2/day for 40 days then
doubled)
• Incorrect reporting (£40/tCO2 for emissions incorrectly reported)
• Failure to surrender sufficient allowances (£40/tCO2 for each tCO2 shortfall)
• Failure to keep adequate records (£5/tCO2)
In summary - what to do and when
01/08
Registration
Preliminary
Report
Annual
compliance
07/08
01/09
07/09
01/10
07/10
01/11
07/11
01/12
07/12
HH Electricity
All energy
EUETS,
CCA
Annual
emissions,
turnover, early
action
Annual emissions,
turnover
Key
Emission period
Reporting period
Sales and recycling
April 2010
April 2011
April 2012
April 2013
Scheme
starts
First sale
(double)
Second sale
(single)
First auction
(single)
First recycle
(double)
Second recycle
(single)
Introductory phase (£12/t sales)
Capped phase
(auctions)
The league table
• Percentage emissions reduction absolute
60%
• Percentage reduction in
emissions/turnover - growth
• Early action, prior to April 2011
Max bonus/penalty
50%
40%
30%
20%
10%
0%
1
• Performance is assessed against a
5 year rolling average
2
3
Year
Early action
Growth metric
Absolute emissions
4
5
Emissions metrics
•
% change in emissions compared with
previous 5 year average
•
% change in emissions/turnover
compared with previous 5 year average
Absolute metric
Growth metric
- Revenue applied for Local Authorities/Universities rather than turnover
- Based on available data until 5-year history established
Early action metrics
•
•
% AMR coverage
% CT Standard coverage
Early action – CT Standard
• Early action – by March 2011
• The Carbon Trust Standard
- Measure your footprint
(more than required by CRC)
For an organisation with >£500k energy bill
Costs
Benefits
£5k membership for 2
years
League table max benefit £5k
• £2.5 in year 1
• £1k in year 2
• £1.5 in year 3
- Demonstrate reduction
(absolute or relative > 2.5% p.a.)
Internal effort and costs
- Demonstrate good carbon
management
• Is it worth it from a CRC
perspective?
Energy and carbon savings,
reputational benefits?
Early Action Metric - AMR
• Automatic Meter Reading (AMR)
• Electricity and gas
• There will be a minimum standard
- Capture storage and retrieval for data
- Half hour frequency
- Software for data manipulation
Participants should consider AMR as part of a metering,
monitoring and targeting strategy – not just for CRC in isolation
Your action plan - today
• Understand your liability
- Understand Organisational
structure (CCA/EU ETS)
- Meter audit – H/H electricity
will determine liability
- 2008 HH Electricity data
• Sources of emissions
(core and non-core)
- At least 90% of total
emissions to be included
- Costs/Benefits of
including >90%?
Your action plan - today
• Understand your
abatement options
- Prepare a MACC?
• What do you want out of
the scheme?
- Compliance?
- Financial rewards –
Energy vs. Carbon?
- Brand rewards?
• Evaluate early action metrics
Preparing for the CRC - Summary
• Work out your organisation structure
• Know your emissions exposure
• Understand your compliance obligations
• Make sure your systems are in place to gather and
manage data and forecast emissions
• Understand your abatement opportunities
• Take a proactive approach to the opportunities the
scheme presents
Carbon Reduction Commitment
Daniel Waller,
Knowledge Leader, Carbon Management
0870 190 6297, [email protected]