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.