On June 30th Government minister Greg Barker announced the next steps to simplify the CRC Energy Efficiency Scheme. Those who attended our workshops earlier in the year won’t be surprised by the main announcements and it’s important to remember that the changes apply to phase 2 which starts in 2013. Those in the CRC now must continue with the existing regulations.
Generally there should be sighs of relief across the public sector. The 90% rule will go meaning that organisations need only produce one ‘Annual’ report a year and can forget the footprint report. The much misunderstood residual fuels will also go and from 2013 only four fuels will be in the scheme – gas electricity, kerosene and diesel.
Despite it feeling like a tax, the CRC is still officially a trading scheme. A return to full blooded trading is only a consideration for phase 3 but in phase 2 there will be a limited opportunity to trade. The idea is that you can buy allowances at the beginning or end of year and that they will be cheaper at the beginning. So it’s possible to buy cheaper allowances at the beginning, realise you don’t need them and sell them on. However, if you like certainty then it’s still possible to wait until the year is over and just buy what you need.
The big unresolved issue is schools and particularly academies. DECC finally accept that this is a problem for councils but offer no solutions, only an intention to review in the light of stakeholder feedback and the publication of an options paper.
Many public sector bodies are on the threshold of participation and will be interested to know that phase 2 qualification has changed. It is now simpler and only applies to electricity going through settled half hourly meters. DECC is reserving the option of lowering the threshold if this results in lots of organisations dropping out of the scheme, but insists that it is not looking to expand the scope of the scheme.
DECC have acted to remove one of the perverse incentives in the scheme which meant that councils stuck to inefficient metering of street lighting to avoid inclusion in the CRC. From now on the supply definition will include ‘passive pseudo half hourly’ and ‘pseudo non half hourly’.
Finally, some hospitals may be relieved to know that from 2013 EU ETS installations will not be considered as supplies for CRC purposes including energy self supplied to EU ETS installations. This may well result in some hospitals not participating in the scheme in 2013 but depends on what happens to the lowered qualification threshold.