Questions remain as clock ticks down

All eyes might have been on the CRC Energy Efficiency Scheme live date, but Dave Lewis, head of business energy services at npower says the time for questions is over - the real work starts now

After years in the making including a name change, a shift of dates and much debate and questioning, the CRC Energy Efficiency Scheme finally went live in April. Given the many seminars, lectures and articles during this time, for many April might have felt like the finishing post, but in reality it was just the beginning.

The 25,000 or so organisations with half hourly metered electricity supply, that will be affected by the scheme, have only until 30th September to prepare and submit an information disclosure on their electricity consumption. This must be an accurate report on electricity use through half hourly meters (HHM) in 2008, the qualification year. Any organisation whose consumption was 6000MWh through one or more half hourly settled meters or AMR qualifies for the scheme in full, which means they will need to submit more detailed information on energy consumption.

In practice this sounds relatively simple - a quick look at your energy records or bills from 2008 to check consumption, complete the registration and send it to the Environment Agency. Job done! The truth is quite different, however, and while for some it may prove relatively simple, for many, completing the registration pack will feel like a bureaucratic and onerous task.

Those with meters spread across several sites will face a particular challenge.Many energy bills may only provide details of estimated consumption due to the way the energy contract has been managed, which could influence the accuracy of reporting. Some participants will have changed energy suppliers since 2008, which could be another complication.

September may feel like some time away, but when considerations like these are factored in, the need to get CRC reporting in place is now pressing. If further incentive was needed, organisations that are eligible for CRC but fail to register in time, will face a fixed fine of £5000, plus an additional £500 per working day per HHM for every day past deadline, to a maximum of 80 days.

The truth of the matter is that registration is the easy part. The more complex element of CRC comes in 2011 when full participants will be required to purchase allowances to cover their CO2 emissions for the year ahead.

This is when the scheme will start to impact cash flow and require careful management to ensure that organisations don't fall foul of the scheme's financial pitfalls. Organisations shouldn't under-estimate reputation consequences of the subsequent league table publication either.

As former Energy and Climate Change Secretary, Ed Miliband, put it when the scheme was launched: "The rewards for businesses who act to cut their carbon emissions are really starting to pay off. It's no longer simply about doing the right thing for the environment, it's now a sure-fire financial investment." What's interesting about this statement is that it underlines the fact that not cutting emissions is just as equally a financial investment misfire. Despite this, we know from our own experience that many businesses are still grappling with the complexities of the scheme. In regular seminars I give on CRC, many are still asking fairly rudimentary questions about participation, and our annual study into businesses' opinion on energy use, the npower Business Energy Index (nBEI), also reveals large numbers are still in the dark.

In the latest index 44% of participants believe the level of guidance on the CRC has not been adequate, while 49% said they do not understand what's required of them to buy carbon allowances, and 44% are also unclear on forecasting their CO2 emissions.

These results suggest many businesses face the prospect of financial challenges unless they can effectively manage their participation.

It is the risk of financial penalty that we believe will lead businesses to look at solutions to manage the CRC, turning to specialists for advice if the expertise to manage the scheme doesn't exist in house. The role of outsourcing such tasks is already common place. Recruitment consultants are called on to manage employment, for example, or IT specialists to advise on IT requirements.

At npower we're increasingly working with a number of our customers in this way under our new 'CRC Assist' service, which supports organisations in managing their CRC obligations. The service is designed to help businesses understand the CRC scheme; assist them with the development of an energy management strategy; and manage their participation in the scheme including forecasting and guidance on the purchasing of emissions allowances.

Using services like CRC Assist could prove time and cost effective, negating the need to recruit and train new staff for the task and freeing up internal resources. It could prove more productive in the long term as the CRC strategy would be based not only on compliance, but on long term goals to deliver energy savings and carbon reductions focused on performing well under the scheme, financially and reputationally, that are linked to a company's broader business objectives.

Our 'CRC Assist' service was launched this year. The interest it has generated is a sign of how businesses are keen to get their CRC plans in place.We expect this only to continue as the registration deadline approaches. For those that haven't yet started the registration process, or aren't sure if they need to register or complete an information disclosure, time is running out.With the clock ticking to 30th September, outsourcing CRC requirements could be a perfect solution.