Carbon Reduction Commitment Energy Efficiency Scheme Health - - PowerPoint PPT Presentation

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Carbon Reduction Commitment Energy Efficiency Scheme

Health Facilities Scotland 20 January 2010

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CRC Energy Efficiency Scheme:

The CRC Energy Efficiency Scheme (CRC) is a new mandatory emissions trading scheme for the UK that aims to reduce carbon dioxide (CO2) emissions through Energy Efficiency. Organisations that meet the qualification criteria, which are based on whether they were supplied with electricity by a settled half hourly meter anywhere in the organisation, and how much electricity they were supplied with through half hourly meters in 2008, will have to participate in

• CRC. Organisations may be fined if they are required

to act but fail to do so.

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CRC Energy Efficiency Scheme Overview:

new mandatory CO2 emissions trading scheme; large organisations; both public and private organisations; Qualification based on electricity usage in 2008; purchase of CO2 allowances for each tonne emitted, and level of refund dependant on organisation energy performance.

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Definition of an organisation:

In terms of NHSScotland an organisation will be the ‘Board’: registration fee and annual subsistence charge; it will include all hospitals, health centres, clinics, offices etc, and also leased and rented accommodation if the contract for the energy supply is with the Board.

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Introduction to the CRC Energy Efficiency Scheme:

When does it start and who will be included. CRC starts in April 2010. For administrative purposes, the scheme is divided into set time periods known as phases. The first phase is the introductory phase and runs for three years from April 2010. Subsequent phases each last for seven years. The first 2 years of these phases are preparatory, and overlap with the previous phase.

Each phase has: a qualification period; a registration period; a footprint year, and a series of compliance (Annual Reporting) years.

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Introductory Phase – Allowances:

Allowances are sold by Government during a month long sale at the start of each compliance year:

during the introductory phase, allowances will be sold at a

fixed price of £12 per tonne of CO2;

there is no limit to the total number of allowances available

to purchase during the April sale periods in the first phase;

the first sale takes place in April 2011, when Boards will

purchase allowances:

to cover projected CRC emissions in the financial year

2011/12. Following the initial sale period, participant organisations can buy or sell allowances by trading on the secondary market or by EU ETS.

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Qualification criteria:

Any organisation that has a least one Half Hourly Meter (HHM) settled on the half hourly market must participate in CRC. This can either be:

• full participation, or
• an information disclosure.

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Full participation in CRC:

Qualification for full participation: have at least one HHM settled on the half hourly market; annual electricity usage from all HHMs is equal to or more than 6000 Megawatt hours (MWh) in the Qualifying Year; requires to register online between 1 April 2010 and 30 September 2010, and pay the registration fee.

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Information Disclosure:

Making a disclosure: have at least one HHM settled on the half hourly market; annual electricity usage from all HHMs is less than 6000MWh in the Qualifying Year; use the online CRC registry to submit information disclosure; disclose your actual total consumption if your HHM consumption is between 3000 and 6000MWh in the qualifying year, and if less than 3000MWh you must ‘tick a box’

• nline.

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CRC timeline:

Qualification period – 1 January 2008 to 31 December 2008; Information on HHMs – during 2009; CRC begins operating – April 2010; Introductory Phase – April 2010 to March 2013; Registration period - 1 April 2010 to 30 September 2010; First footprint year – April 2010 to March 2011; First compliance year - April 2010 to March 2011.

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CRC timeline:

CRC Energy Efficiency Scheme Timeline

Phases 1 to 3

J F M A M J J A S O N D A M J J A S O N D J F M A M J J A S O N D J F M

Registration Footprint Year Footprint Report 1st Annual Reporting Year 1st Annual Report

A M J J A S O N D J F M

Introductory Phase1

2nd Annual Report 2nd Annual Reporting Year Reconciliation

A M J J A S O N D J F M

3rd Annual Report 3rd Annual Reporting Year Reconciliation Qualification Phase 2 Registration

Phase 2

Footprint Year Footprint Report 1st Annual Reporting Year 1st Annual Report

A M J J A S O N D J F M

2nd Annual Report 2nd Annual Reporting Year Reconciliation 3rd Annual Reporting Year Qualification Phase 1

2008 2010 - 11 2011 - 12 2012 - 13 2013 - 14 2014 - 15

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Qualification period – 1 January 2008 to 31 December 2008:

Qualification for CRC is based on the summation

• f all HHM electricity consumption settled on the

half hourly market during the qualification period; Settled half hourly meters (HHMs) - Electricity suppliers use HHMs to calculate your bill. There are four types of metering which can be settled on the half hourly market. These are: mandatory HHMs (are HHMs required to be installed in certain situations, in Scotland they are installed if the daily Maximum Demand is 100kW or greater); voluntary HHMs; half-hourly Light Meters, and pseudo HHMs.

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HHM Information Letters : All HHM sites will receive a information letters;

this letter will include the 2008 consumption data for the respective meter that will help to calculate your overall Board consumption; Information Letters will be distributed before during 2009.

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Registration:

All Boards that qualify must register with the

• nline registry between 1 April 2010 and the 30

September 2010. Providing:

information on the organisation; information on the persons responsible for the

• rganisation’s participation in CRC;

registrant, primary & secondary contacts, senior

• fficer contact, invoice contact and up to 3 account

representatives;

a list of all the organisation’s HHMs settled on the

half hourly market, and

total half hourly electricity used during the

qualifying period, includes all HHMs and qualifying AMRs.

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Post Registration Footprint – CO2 Emissions:

Your organisation’s total footprint emissions, which are recorded once for each phase, and is the summation of the organisation’s emissions from energy supplies across all sites less those from excluded activities. The Footprint Year, will normally be two years before a phase starts. For the introductory phase, however, it will be April 2010

• March 2011 – which is also the first compliance year.

The total Footprint emissions is the summation of all energy supplies used across the organisation from:

electricity; gas, and any other fuel types such as, LPG, diesel, etc.

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Phase 1 Footprint and 1st Annual Reporting Year:

The footprint year (2010/11) is also the 1st Annual Reporting Year with reports on both due in July 2011. The footprint year is a measure of your organisation’s total CO2 emissions, against which all other reporting years in the phase will be measured. This is important as, based on this data, the organisation is required to:

buy allowances at the beginning of each year (April) for each

tonne of CO2 they think they will emit in the during year;

record CO2 emissions during each Reporting Year; submit the Annual Report to the administrators detailing how

much CO2 they have emitted, and

surrender/reconciliation of allowances in July after the year end

for all the CO2 they have emitted.

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Calculating CRC Emissions:

From an organisation’s total footprint emissions, the emissions that are required to be included in the CRC emissions are calculated.– these are the emissions for which allowances are purchased. There are two rules that determine CRC emissions:

• 1. All emissions from core sources (detailed on next slide)
• f energy must be included in your CRC emissions,

unless they are covered by EU Emissions Trading System (EU ETS) or CCAs.

• 2. At least 90% of your total footprint emissions must be

regulated either by CRC or by EU ETS or CCAs. The remaining 10%, known as ‘Residual Sources’, of the

• rganisations emissions may be omitted, primarily

because the administrative burden of accounting for some very small sources of energy every year would be disproportionately large.

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Core Sources:

Core sources are all emissions from the following sources: all electricity consumed through HHMs (including pseudo HHM); all electricity consumed through AMR meters; all electricity consumed through profile class 5-8 meters; all daily-read gas meters; all gas consumed through AMR meters, and all non-daily metered gas consumption of more than 73,200 kWh per annum. You must include all energy from these core sources in your CRC emissions, unless they are already regulated under EU ETS or CCAs.

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90% Rule: If, after including all an organisation’s core sources, the CRC emissions have not yet reached the point where 90% of the total footprint emissions are regulated, then some of the residual sources must be included until the

• rganisation’s combined EU ETS, CCAs

and CRC coverage level is above the 90% threshold.

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Producing a Footprint report:

At the end of the footprint year, Boards require to provide a footprint report to the scheme administrator covering:

their total footprint emissions; their CRC emissions, and details of any exemptions through EU ETS.

This report must be submitted, using the CRC registry, by the last working day of July – four months after the end of the footprint year.

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Compiling an evidence pack:

Copies of all records that support information provided to the administrator must be retained in an evidence

• pack. This should include records and evidence for all

data that has been used to make the footprint report. Adding to this evidence pack information about energy usage and emissions in each compliance year:

structural records that define the scope of the

• rganisation;

data records showing the total energy consumption; special event records; data for Early Action and Growth metrics, and records to support exemptions and energy credits.

Evidence from 2010/11 must be kept for the duration for the scheme. Records from other years must be kept for five years after the end of the phase to which they relate.

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Reporting emissions and surrendering allowances:

Organisations are required to report their annual emissions by the last working day of July after the end

• f the first compliance year. (In the first year, this will be

29 July 2011). Like the footprint report, annual reporting is done via the CRC registry. Organisations entering details of their energy use for the sources contributing to your CRC emissions, the CRC registry then converts this figure into tonnes of CO2. In the introductory phase, the first compliance year of the scheme (2010/11) is also the footprint year for the first phase. You therefore have to submit your first annual report at the same time as your footprint report.

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CRC performance league table:

After all the Annual Reports have been received, a performance league table is compiled and published by the scheme

• administrator. To make a comparative assessment, performance is

calculated using three different metrics. These are:

an absolute metric - which simply reflects the relative change in an

• rganisation’s CRC emissions;

an early action metric, based on two factors equally weighted;

% of non-mandatory HH gas and electricity emissions covered by

voluntary AMRs by 31 March 2011, and

% of organisation covered by the Carbon Trust Standard or equivalent

by 31 March 2011.

a growth metric - this gives recognition and provides context for an

• rganisation’s growth or decline during its participation in the
• CRC. This is based on the percentage change of emissions per unit
• f revenue expenditure and is determined by comparing energy

intensity (i.e. per unit level of emissions) relative to average over the preceding 5 years (or those available until a 5-year history is established).

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CRC performance league table – first year:

At the end of the first year of the scheme, Government will only have collected one year of emissions data and therefore will not be able to calculate either the absolute or growth metrics. So for this first year, the league table will be based solely on the early action metric. To improve your chances of doing well in this metric, you need to:

voluntarily install automatic meters (AMR), and attain the Carbon Trust Standard or equivalent

and ensure you have a valid certificate for the relevant compliance year.

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CRC performance league table – cont:

Phase Year Bonus/Penalty Rate Introductory phase Year One +/-10% Introductory phase Year Two +/-20% First capped phase Year Three +/-30% First capped phase Year Four +/-40% First capped phase Year Five +/-50%

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CRC performance league table – cont:

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Audit and regulation:

CRC is based on self-certification of

• emissions. However, to ensure the integrity of

the scheme there is an audit procedure to verify the accuracy of participants’ records and returns:

all organisations can expect to be audited during the

scheme, and the data collected for previous years must also be made available for assessment;

it will be a desk-based assessment of the evidence pack

provided by each participant to find out whether the data in the participant’s reports is correct and based on sufficient records, and

site visits will be made where necessary.

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Audit and regulation - Penalties:

Failure to register: immediate fine of £5,000 imposed for failure to register by the deadline; further fine of £500 per working day for each subsequent working day of delay until last working day of July (the next reporting deadline), and publication of non-compliance. Failure to disclose information: where an organisation with a Half Hourly Meter (HHM) that does not meet the qualifying threshold fails to make an information disclosure, a one-off fine of £1,000. Failure to provide a footprint report: immediate fine of £5,000 for failure to provide a footprint report by the reporting deadline; further fine of £0.05 per tonne of carbon dioxide (tCO2) per working day for each subsequent day of delay up to a maximum of 40 working days. This part of the fine is doubled after 40 working days, and publication of non-compliance.

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Audit and regulation – Penalties cont:

Failure to provide annual report; immediate fine of £5,000 for failure to provide an annual report by the reporting deadline; further fine of £0.05 per tonne of carbon dioxide (tCO2) per working day for each subsequent day of delay up to a maximum of 40 working days. This part of the fine is doubled after forty working days. Total emissions are doubled, for the purposes of calculating the league table only; publication of non-compliance; administrator will block the transfer of all allowances out of the participant’s registry account until report is received, and bottom ranking on the Performance League Table. Incorrect reporting: fine of £40 for each tCO2 of emissions incorrectly reported – to be applied wherever there is a margin of error greater than 5%, and publication of non-compliance.

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Audit and regulation – Penalties cont:

Failure to comply with the performance commitment: must obtain and cancel the outstanding balance of allowances as soon as possible; fine of £40/tCO2 in respect of each allowance that should have been obtained and cancelled; publication of non-compliance, and administrator will block the transfer of all allowances out

• f the participant’s registry account until all necessary

allowances are cancelled. Failure to keep adequate records: fine of £5 per tCO2 of total emissions reported in the most recent annual report, and publication of non-compliance.

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Audit and regulation – Criminal Offences:

Falsification: knowingly or recklessly make false or misleading statement; falsification of evidence, and attempt to deceive or mislead the administrator. Summarily: imprisonment up to three years, and fine up to £50,000. Indictment: imprisonment up to two years, and fine (undetermined). Non-compliance with enforcement: failure to comply with an enforcement notice; intentionally obstruct the administrator; failure to provide assistance, facilities and information or to permit any inspection, and failure to appear, or prevent any other person from appearing, before the administrator as part of an inspection.

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Contacts:

For all the information on CRC go to: http://www.decc.gov.uk/en/content/cms/consul tations/crc/crc.aspx Or contact John Dunlop at the HFS by either email or telephone: johndunlop@nhs.net 0141 352 5543