Revised CRC scheme has two ‘own goals’

The Energy Consortium (TEC) believes that changes made to the CRC Energy Efficiency Scheme following the Comprehensive Spending Review mean that proactive carbon managers are penalised twice — first because revenue recycling has been scrapped and secondly because allowances now have to be purchased for automated meter readings (AMR).

TEC’s head of Carbon Advisory Service Brian Hornsby said that pre-CSR there was some logic in the CRC Scheme’s approach to early action incentives. ‘Installing AMRs was marketed as a means to improve one’s position in the CRC league table, with the prospect of a full or enhanced refund of revenue in the recycling process.

‘Theoretically, organisations could get at least 90% of allowance purchase costs back under the recycling process. The significance of the ruling allowing up to 10% of emissions to be classified as “residual”, and therefore discounted for allowance purchasing purposes, was marginal.’

Mr Hornsby says that the impact of scrapping revenue recycling has hidden consequences, above the obvious one of having to purchase all allowances. He says the league table no longer has any financial benefit, only reputational — adding that efficient carbon managers get no ‘bonus’, other than the satisfaction that their efforts mean less carbon will be bought.

‘The impact goes deeper though. Having gone to the trouble of installing AMRs, with the attendant data-collection costs, any meters that would otherwise have been classified as “residual” have now become “core”, so allowances for these must now be purchased. Is that one own goal or two?’ he asks.

TEC is a leading independent proponent and provider of collaborative energy procurement in the public sector, particularly to universities and colleges, and suggested a number of simplifications to the CRC Scheme earlier this year to DECC.

‘CRC Scheme aims are to be applauded, but the vehicle for delivering the desired savings has become the legendry camel, designed by a committee commissioned to produce a racehorse. This double-whammy of penalties is a clear example of the consequences of poorly worked through changes to an already over-complex scheme,’ suggests Mr Hornsby.

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