CarbonFeet

Despite popular thinking, many organizations are welcoming the introduction of the CRC Energy Efficiency Scheme, the far-reaching initiative dreamed up by the British government. The scheme, due to get underway in April of 2010, is a bold attempt to reduce carbon emissions and affect climate change. The biggest consumers of energy in the country will now have to pay to emit carbon, although the payments will be reimbursed together with incentives for those who are really proactive.

Unlike some similar suggestions in other countries, notably the US, the CRC Energy Efficiency Scheme is designed to be revenue neutral to the taxation authorities. This in itself can be seen as quite a carrot for the aggressive organization. Company executives can now see that if they take significant steps to reduce their carbon emissions they will achieve natural efficiencies through the use of less energy, but could also receive financial bonuses if their actions turn into better-than-average results.

As a league table of results will be compiled by the British government, made available to media and the public, everyone will be able to see the relative efficiency of the big companies. If an organization is unable to perform, it may suffer reputationaly, in addition to the payment of penalties.

It is inconceivable if true, that according to one recent survey a majority of organizations affected by the CRC Energy Efficiency Scheme remain passive. They appear not to have significant plans in place to start reducing their emissions and to become sustainable.

Simple compliance with the CRC Energy Efficiency Scheme will not be sufficient and each company will have to do its best to reduce its emissions. When the scheme gets going, a number of different metrics will be used to calculate performance, but in the early days the “early action” metric is the important measurement. Organizations that fit automatic meter readers or join the ranks of an accredited organization will score more highly than those who don’t.

Fundamentally, companies must report a decline in energy use year-by-year and this is the main measurement within the CRC Energy Efficiency Scheme. A number of modifiers will be applied to the results and companies that are seen to be especially successful, for example by decreasing emissions while they also grow, will earn even more payback.

When the scheme matures into an auction-based project in 2013, a cap will be placed on the total number of carbon emissions allowable in the UK. Carbon will then become a keenly traded financial commodity and those who are ill prepared with flounder.

As always, cash flow comes into the picture. The company must buy carbon allowances in advance of it using them and the amount that it buys will be directly related to its performance figures from the preceding year. In addition to the receipt of bonuses, a performing company will also benefit from having a reduced cash flow commitment and will also be more energy efficient as well. Clearly, for some, the CRC Energy Efficiency scheme will be very welcome.

Daniel Stouffer has a lot of information about the CRC Energy Efficiency Scheme and how a visit to www.verisae.com can be of use to you.

The British government was determined to make a difference in the war against climate change and pushed through new legislation to pave the way for the CRC Energy Efficiency Scheme. The path they were paving was indeed groundbreaking and the government went out of its way to solicit feedback from those affected. While the program will not essentially gain any sharp teeth until it’s “cap and trade” auction scheme element kicks in, 5000 organizations are being forced to comply anyway very soon. These companies spend about a half million dollars per year on energy costs and are primary polluters.

When the program was first mooted, it was suggested that companies start buying allowances right from the beginning of the program, each allowance representing a tonne of carbon dioxide. While the organization would not actually pay these funds until the end of the first trading year, the point of payment also coincided with a requirement for them to pay the following year’s allowances in advance. This was known as a double sale of emission allowances and became very unpopular as it would have been extremely prohibitive from a cash flow perspective.

This is the first phase of the CRC Energy Efficiency Scheme and is three years long as part of the introduction. During this time, allowances are going to be made available for sale at the rate of 12 per tonne and will be unlimited. The actual “cap” Of “cap and trade” will not be in place for several years. The company will know how many allowances it has to purchase because it will calculate these figures during the course of the year beginning spring 2010 — the “footprint year.”

Companies now only need to pay for their emissions in advance and do not have to pay, in April 2011 as had been originally mooted, for both the footprint year and the following year.

Each April when the scheme gets underway, starting in April 2011, organizations must buy allowances from the government. The buying period lasts for the entire month and a company’s payment must clear through the bank before the allowances will be issued. The government has said that it intends to set up a registry, still currently in development, enabling all the transactions to be processed.

If additional allowances are required to be purchased by an organization in the emissions scheme, basically due to the lack of efficiency or a miscalculation, these will be available on a secondary market. Thus companies will be allowed to trade with other participants in the scheme to buy and use allowances in this way. The terms of this agreement will be between sellers and buyers and have nothing to do with the government as such.

Many organizations are pleased to see the elimination of the double sale. This has been considered a serious flaw in the make up of the CRC Energy Efficiency Scheme and a huge financial burden for those organizations forced to comply. Now, they will just have to make cash flow arrangements for April 2011, based on the purchase of allowances for the period then commencing.

It’s vitally important that companies become energy efficient anyway and this scheme just underlines the situation. The government will publish the league table of participants, with those who are most efficient receiving bonuses while those who have failed to perform suffering corresponding penalties. Those who show a clear initiative are already joining the Carbon Trust Standard and fitting automatic meter readers as part of a concerted effort.

Daniel Stouffer has a great deal of information about the CRC Energy Efficiency Scheme and how a visit to www.verisae.com will aid you.

Organizations are sometimes quite selective about the word “efficiency.” They are very focused on ultimate productivity and pay good attention to metrics associated with output according to benchmarks and categorization. It is assumed that if the asset is producing quantifiably that it is efficient, but little regard is given to energy-related efficiency.

In truth, energy efficiency is much more important than benchmarks asset production. In the larger scheme, it means little that the asset can produce X number of products, if as a consequence of its action it is producing an excess amounts of carbon emissions. Society wants to know that commercial productivity is totally efficient from an energy perspective, or there are likely to be consequences.

Organizations that do not adopt enterprise carbon and energy management systems to help them become ultimately efficient run the risk of failure. A competitive organization may seize the initiative and ensure that its assets are not only productive, but using the least amount of energy possible and consequently polluting less. This concept may have seemed totally alien even only a few years back, but the outcome may well be expected in short order.

Enterprise carbon and energy management systems are able to track individual asset performance, in correlation with all other elements of a typical operation. If asset performance is optimized, the business is likely to be more efficient from an overall basis. The systems bring together all the information and enables the organization to be fully aware of its position and liability.

Legislative pressures are growing. The House of Representatives passed the American Clean Energy and Security Act, which is now in front of the Senate. Progress is slow, but if this is ultimately passed it will require organizations to barter for and trade their rights to use energy, as represented by the new tradable commodity — carbon.

Performance related energy efficiency is the ultimate bottom line for a company. Enterprise carbon and energy management systems have determined this situation and rather than represent an additional burden or expense, can be seen as a very smart investment in the future.

Our national grid is failing and as our energy production and distribution systems become less able to cope with an increasing demand, costs will continue to rise and a stark reality will face everyone ahead. New systems and processes must be adopted as each and every company becomes sustainable.

An organization has many stakeholders and public opinion may yet represent one of the biggest pressures it will face. Society will expect an organization to have enterprise carbon and energy management systems at its disposal and will be looking for results at the risk of withholding support for the company.

Daniel Stouffer has a lot of data about enterprise carbon and energy management systems and how a visit to www.verisae.com can be of use to you.