Have you taken CRC action?

With the registration period for CRC now over (ended 30 September) organisations are turning their attention to data collection. The footprint and annual reports need to be submitted by the end of July next year.

For many organisations this means implementing AMR metering (Voluntary Automatic Meter Reading). This is for four reasons:

1. Estimated energy consumption is increased by 10 per cent within the CRC (to compensate for potential errors). Regular meter readings take away the need for estimating consumption.

2. There are fines and penalties for inaccurate data (£40 a tonne of CO2).

3. Having accurate half hourly data has been shown to reduce energy consumption. Studies have shown 10-20 per cent savings can be achieved through data analysis and taking action to address abnormal energy consumption.

4. Qualifies for 50 per cent of the Early Action Metric (the other 50 per cent is for achieving one of the four approved Carbon Reduction Standards).

Financial benefit
The Early Action Metric provides significant financial benefit to help justify the business case for investing in AMR. During the introductory phase the Early Action Metric (EAM) is worth up to 48 per cent of a years recycle payments:
• Year 1 (2010/11) EAM weight = 100 per cent, penalty/bonus = +/- 10 per cent, value at risk = 20 per cent
• Year 2 (2011/12) EAM weight = 40 per cent, penalty/bonus = +/- 20 per cent, value at risk = 16 per cent
• Year 3 (2012/13) EAM weight = 20 per cent, penalty/bonus = +/- 30 per cent, value at risk = 12 per cent

What does this mean in numbers? For an organisation spending £2m on energy their annual allowances will be in the region of £160,000 (depending on the price they pay for energy and the split between gas and electricity, etc).

Over the introductory phase the potential value at risk from the Early Action Metric is 48 per cent = £76,800. This is the difference between being at the top and the bottom of the league table.

Data solutions
So, what can organisations do? Well, most of the energy suppliers are now providing data solutions as part of their services. Usually this involves installing smart meters and an online tool with access to half hourly data. Your first point of contact should be your existing supplier to find out what they can do for you. If you’re tied into an energy supply contract for a period of time you can shop around and compare products and services from other providers. There is also a framework agreement on the buying solutions website (www.buyingsolutions.gov.uk) which is a useful starting point.

It’s worth noting that the Environment Agency clarified the guidance on AMR earlier this year. Many participants thought that as long as they had installed AMR by the end March 2011 they would qualify for the Early Action Metric. This is not the case. The metric is calculated based on how much annual energy consumption is actually measured through AMR. This means that to obtain the maximum benefit AMR would have to be installed and operational on 1 April 2010.

Our experience talking to CRC participants suggests that many are in the early stages of AMR implementation and will therefore lose out on most of the EAM benefits.

Carbon Reduction Standards
There is some good news. The rules are different for the other Early Action Metric, obtaining one of the four approved Carbon Reduction Standards:
• Carbon Saver GOLD Standard: 0800 1075175, www.carbonsaver.org
• Carbon Trust Standard: 0800 0191443, www.carbontruststandard.com
• CEMARS: 01235 820813, www.achilles.com
• Energy Verification Reduction Kitemark: 0845 0809000, www.bsigroup.com

Provided an organisation holds a valid certificate from either of the schemes on 31 March each year they qualify. This means it’s not too late to improve your recycle payments for the first three years of the scheme.

In summary, with significant sums at risk it’s important for organisations to take action now. The benefits from implementing AMR are reducing every day so if it’s on the to-do list, bring it to the top! Also, seriously consider applying for an approved carbon reduction standard. Not only will it provide financial benefits, it will also provide reputational benefits for your stakeholders. It’s not too late. Apply today.

About the author
Glenn Wilkinson MBA FRSA FCMI is the managing director for Carbon Saver, which provides one of the four approved Early Action Standards.

For  more information
Tel: 01204 843484
Freephone: 0800 1075175
E-mail: glenn@carbonsaver.org
Web: www.carbonsaver.org