CRC Energy Efficiency Scheme

The Simplified
Energy Efficiency Scheme
Cath Pike – Policy Adviser, CRC Energy Efficiency Scheme
Paul McLaughlin – IEE Strategic Outreach and Engagement Manager
Energy Efficiency
“Energy efficiency belongs at the heart of a low-carbon economy.
By reducing energy use and cutting down on waste, we can
reduce energy bills, make our energy system more sustainable,
and drive down greenhouse gas emissions.”
Ed Davey, Secretary of State
“The simplified CRC – alongside the Green Deal – is the best
way to achieve greater energy efficiency and contribute to
meeting our carbon budgets in the relevant sectors.”
Greg Barker, Minister of State for Climate Change
The Energy Efficiency Strategy
Driving the availability and
disclosure of energy use
Encouraging growth
in green jobs
Incentivising innovation in
energy efficiency
CRC Energy
Increasing awareness
of energy use within
Reducing organisations’
energy bills
The simplification process
Late 2010: Ministers committed to simplifying the scheme
2011: Evidence-gathering period
March-June 2012: Formal Consultation
December 2012: Government Response
May 2013: New legislation
April 2014: All simplifications in effect
Changes to proposals since consultation
Number of fuels covered reduced to two, rather than four
2% de minimis on gas introduced, to reduce the reporting burden
State-funded schools in England withdrawn from the scheme
Landlord/tenant rules disapplied in the presence of a construction
lease of a minimum of 30, rather than 40, years
Allowance surrender deadline extended to the end of October,
rather than September
Removal of the Performance League Table, replaced with the
publication of participants’ aggregated energy use and emissions
Simplifications in effect for Phase 1
• Reduction in number of fuels covered, from 29
to 2
• Removal of the 90% applicable rule, with a 2% de
minimis threshold for gas
• Exclude domestic electricity supplies 9profile
classes 01 and 02) and a similar meter-based
exclusion for domestic gas supplies with an
annual quantity of <73,200kWh
• Extension of the CRC allowance surrender
deadline to the end of October
• Removal of the Performance League Table,
replaced with the publication of participants’
aggregated energy use and emissions data
• Concerns raised during consultation that
position on renewable self-generation within
CRC was inconsistent with wider Government
policy on renewables.
• Commitment to review the position set out in
Government Response to consultation on
CRC simplification, December 2012
Renewables – option criteria
• Need to fit with existing policies:
– Renewable Obligation Certificates (ROCs)
– Feed-in Tariffs (FITs)
• Provide value for money
A one-stage qualification test
• Fewer qualification criteria
o Qualification based on supplies through
settled half hourly meters only
• 6,000MWh qualification threshold retained
• Automatic population mechanism
A reduced reporting burden
Reduced reporting requirements
o Only one annual report in 2013/14
o Abolition of footprint report requirement
Fewer fuels covered
o Removal of 27 fuels from reporting requirements
Removal of 90% applicable percentage rule
o 100% reporting, but only on two fuels - electricity and
gas (responsible together for 93% of CRC emissions)
o 2% de minimis organisational threshold for gas
Reduced data retention period
o Records required to be kept for only six years
A more coherent policy framework
• Fewer policy overlaps
o Clearer definition of EU ETS and CCA boundaries
o All energy supplied to EU ETS installations and CCA facilities out
of scope
o Removal of CCA exemption rules
o Emissions factors aligned with Government’s GHG Reporting
A more coherent policy framework
Out of CRC
electricity or
EU ETS/CCA Facility
Out of CRC
ETS/CCA part
of site
Gas Supply
Electricity Supply
Report all at lower
emissions factor
electricity or
More flexible organisational rules
More flexible disaggregation
o Any subsidiary undertaking can disaggregate for separate participation
o Disaggregation at any point during the first year of the phase, or during
a compliance year
Replacement of Significant Group Undertakings
o “Participant Equivalent” status for undertakings
large enough to qualify for the CRC in their own
Simplified “designated changes” rules
Example of Participant Equivalents
within a CRC group
A more flexible trading system
• Two fixed-price sales of allowances each year
o Forecast sale at the beginning of the year
o Buy-to-comply sale after the end of the reporting year
• Allowance surrender deadline extended
o Moved from the end of July to the end of October
• Prices set through Budget process
o Price at forecast sale lower than at buy-to-comply sale
Allowance Sale Deadlines
• Staggering the compliance deadlines
o Reporting deadline – 31 July 2013
o Allowance application period – 3 - 31 July 2013
o Allowance payment period – 2 – 20 September 2013
o Allocation period – 2 September – 15 October 2013
o Surrender deadline (CRC Order) – 31 October 2013
o Payment by BACS, where possible
Publication of Aggregated Data - Background
o Chancellor’s Autumn Statement 2012 announced the removal
of the CRC Performance League Table from the 2011-2012
reporting year onwards
o Going forward, the Environment Agency will publish CRC
participants’ aggregated data
o Provides an opportunity to shape reshape future data
publications and to address stakeholder concerns relating to
the former PLT
Key Concerns around the PLT
o Metrics
o Disagreement over the appropriate metrics to accurately reflect
participants’ performance. Future data publications will not be
based on metrics
o Ranking
o Some participants had concerns around any form of ranking
(based on the metrics). Going forward, participants will not be
o Ranking all CRC participants in one table
o Some participants wanted to be ranked against only their
competitors. More flexible provisions in the CRC Order 2013
provide scope for this concern to be addressed
What data should be published?
o Emissions Data
o Published as part of the PLT
o Energy Use Data
o Not previously published. Some participants have raised
concerns around commercial confidentiality.
o May facilitate comparison of performance across phase 1
o Turnover Data
o Not previously published. Commercial in confidence
o Data not always current
How to facilitate sectoral splits and year on year
o Sectoral Splits
o Would this be helpful?
o Would the ability to sort organisations based on self
selected SIC codes be the best way of facilitating this?
o Other options?
o Year on Year Comparison
o PLT data covered only one reporting year
o Would it be helpful to publish data for each year within a
phase side by side?
Timing for publication of data
o PLT publication timing was the autumn following each
reporting year
o Future data publications
o Intention is to keep future data publications to the same
timeframe as those for the former PLT
o Comments?
How to represent changes in
organisational structure
o Designated changes and disaggregation
o Changes in organisational structure might lead to an
increase/decrease in the emissions of individual
o These changes might be attributed to performance, rather
than organisational change, if not reflected as such in data
o SGUs and Participant Equivalents
o Should these be included and listed under their parent
CRC Evaluation
• Evaluation Approach
o Annual data reports
o Phase 1 evaluation (2015)
o Phase 2 evaluation (2016-17)
• Key Challenges
o Identifying the counterfactual and isolating impacts of CRC
from other factors
o Identifying incentive levels related to different drivers
o Ensuring robustness of qualitative data
• Feasibility Study – July – September 2013
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