With the Carbon Reduction Commitment upon us, FSN senior writer, Niki Leahy, completes her three part series on the initiative by looking at the software requirements and some of the solutions available in the market.
The Environment Agency, (the EA) which is responsible for administering the CRC Scheme describe it as a, “mandatory scheme that aims to improve energy efficiency and reduce the amount of carbon dioxide emitted in the UK”. Although the EA estimate approximately 5 000 organisations will be required to participate in the CRC, almost 20 000 organisations are expected to be affected by the new legislation which came into effect on 1st April. The CRC requires participant organisation to purchase carbon allowances from the Government, which are based on each tonne of CO2 they emit. These allowances must be surrendered at the end of each year based on the organisation’s actual energy usage. Organisations may trade allowances on the secondary market – and sell their unused allowances to those within the Scheme who find they need more.
Previous articles about the CRC have focused on the qualification criteria for organisations that must register and participate under the Scheme, as well those that must register and make an information disclosure. As you may recall, for registration purposes you need to be submitting electricity consumption data for all of 2008 by 30th September 2010 that relates to half hourly meters with a meter point administration number, (MPAN) beginning S00, as well as all electricity consumed via automatic meter readings and pseudo or dynamic half hourly meters. Previous articles have also covered the implications for accounting systems and processes as well as mandatory record keeping, budgeting systems. Well known amongst specialist software providers is Global CarbonSystems which developed its Energy & Carbon Intelligence System, (ECIS) for the Australian market in response to the Australian government’s National Greenhouse and Energy Reporting System. ECIS is an example of an enterprise software solution, designed to capture, report and manage all environmental data, including energy, fuel, water and carbon emissions on a web based platform. The EA already has considerable powers to audit the “carbon accounts” of participants, and it is envisaged that some time in the near future participants will face independent carbon auditing requirements similar to those of financial accounts.
Organisations still grappling with the submission of 2008 registration data, as well as with the requirements of the footprint report and annual reports, may well be relieved to know that the EA have developed an excel based tool designed to assist participants with their energy data management for 2010 and beyond. This tool allows for the storage of energy supply data needed to support the footprint and annual reports in a single file. You can access a copy of the Environment Agency’s tool here.
Using the EA Data Collection Tool
There are some obvious advantages to using the EA’S CRC excel based tool in gathering all the energy consumption data needed for the footprint and annual reports to be submitted in July 2011 – however those organisations with complicated structures, considerable energy consumption data and an interest in managing all their utility services, (such as waste disposed, water consumed and other Scope 3 greenhouse gas emissions data) are looking for more sophisticated ways in which to monitor these inputs, AND their carbon outputs and associated costs.
Options in addition to the ECIS system outlined above include software systems from SystemsLink, TAC, Entech, Team, Stark and others. These capture carbon data from existing sub metering systems via building management systems, as well as from main fiscal metering systems and more sophisticated main data management systems including Cloud computing applications.
Main data management systems that can be used for the CRC should provide a central data store with web based access, and automatically collate meter data from both fiscal meters and sub metering systems where enabled, and be integrated with ERP. Smart metering systems are strongly recommended for all utilities because they provide automated processes, reducing physical meter reading, as well as live dynamic data (day plus 1), automated monitoring and targeting which identifies potential areas for energy efficiency.
In addition to getting the rights systems in place, organisations should also take early actions wherever possible, these include gaining the Carbon Trust Standard accreditation, and installing AMR meters on all electricity and gas sources purchased that are not half hourly metered by the energy provider. AMR meters facilitate the tracking and management of energy consumption, but are also important for improving the organisation’s position within the CRC league table.
CRC Revenue Recycling
Participants in the CRC get their money back (i.e. the expenditure they have made on carbon emissions allowances they have purchased to cover their CO2 emissions) plus a bonus or penalty payment, which is based on a league table of all CRC participants. Position in the overall league table is calculated using the weighted average of three leagues which measure the following:-
- absolute metrics, (the annual percentage change in CO2 emissions over a 5 year rolling average)
- early action metrics, (the percentage of non mandatory half hourly meters covered by a voluntary AMR and the percentage of emissions covered by the Carbon Trust standard)
- growth metric, (the percentage of change in emissions per unit of takeover against a rolling five year annual emissions per unit of turnover)
Head of climate change and sustainable development at the Environment Agency, Tony Grayling, said recently of the CRC league table, “this is a very public judgement on how seriously you take your environmental responsibilities. Carbon reduction doesn't need to be complicated or expensive, there are simple and inexpensive steps every organisation can take to cut their energy consumption - from motion sensors for lighting in offices to higher efficiency motors in manufacturing."
Mr Grayling added: "All the money raised from allowance sales will be recycled back to participants according to their energy performance.
"The best performers will get more money back than they paid, while poor performers will get less. From next year, the Environment Agency will publish an annual league table highlighting the best and worst performers in CRC."
In addition to the annual league table, from 2013 an emissions cap and trade system will be introduced. This will limit the total amount of carbon dioxide participating organisations can emit by capping the total number of allowances available and selling them at auction – with obvious implications for cost for those organisations that don’t manage a year on year reduction in their output of carbon emissions.