CRC Energy Efficiency Scheme 2011:Making Energy Efficiency the Key

"We will keep a close eye on the CRC. Making sure it is effective, simple and streamlined; encouraging those industries that need it most. If it can be improved, we will make changes before the next stage in 2013."

The Rt. Hon. Chris Huhne MP, Secretary of State for Energy and Climate Change

Govtoday presents our 2nd, Annual National Conference and Exhibition CRC Energy Efficiency Scheme 2011: Making Energy Efficiency the Key, which will be held at the Brewery on the 16th March 2011.

Following the Climate Change Act 2008, and acknowledging the UK's international commitment to a reduction in carbon emissions of 34 per cent by 2020, the Coalition Government has promised to deliver 'the greenest government ever', securing our low carbon economy through green growth and targeted carbon reduction measures across both the public and private sectors.

The CRC Energy Efficiency Scheme was introduced to incentivise large organisations to invest in carbon reduction infrastructure, raising awareness and encouraging behaviour change, with energy efficiency regarded as the key to this process.

The Scheme commenced on 1st April 2010, targeting both public and private organisations with an annual half-hourly metered electricity usage of at least 6,000 Megawatt hours (MWh) - responsible for approximately 10 per cent of the UK's emissions.

In simplistic terms, upfront payment of allowances to the Treasury due in 2011, at a fixed price of £12/tCO2, would then be recycled back to those organisations achieving significant energy efficiency and emissions reduction. Currently, 2,779 organisations are registered as full participants of the Scheme, with 12,100 registering as information declarers as of 1st October 2011.

However, in response to both widespread criticism of the complexity and costs of compliance to the Scheme and the Committee on Climate Change Report on 24th September 2010 - 'Advice to Government on the second phase of CRC' - in the Spending Review on the 20th October 2010, the Government announced that the CRC would be simplified to reduce the burden. The first allowance sales will now take place in 2012, rather than 2011, allowing extra time for organisations to invest in energy efficient processes, technologies and management programmes. Moreover, the expected revenue of £1 billion from the Scheme would now be used to reduce the budget deficit and would no longer be recycled to the relevant participating organisations.

"There was an awful lot of criticism of the amount of administration and compliance costs the CRC was imposing... with very little effect on carbon reduction... the impact on carbon reduction was effectively coming from the tax side and not from the very complicated, very baroque system of recycling."
Rt. Hon. Chris Huhne, Secretary of State for Energy and Climate Change

Consequently, a CRC Energy Efficiency Scheme Consultation began in November 2010, and a detailed revision of the Scheme is due in early 2011, with the first allowance sales now due to commence in 2012, allowing extra time for organisations to invest in energy efficient processes, technologies and management programmes.

Following this announcement, the Government has now launched a consultation from 17th November to 17th December 2011, on extending the introductory phase and postponing the start of Phase 2 until 2013. A detailed revision of the Scheme is due in early 2011.

Carbon Reduction Energy Efficiency Scheme 2011: Making Energy Efficiency the Key Conference and Exhibition will provide detailed information and clarity on these key changes to the Scheme. An opportunity for industry and government to exchange knowledge and best practice, this second national Conference will bring together those at the forefront of this ever-shifting agenda to evaluate the challenges ahead.