Pause for thought: CCA extension consultation closes

Following the closure of the government’s consultation on reforms and an extension to the CCA scheme on Thursday, EIC explores the success of the scheme so far and the opportunity that this extension presents to business leaders.

Laying a foundation 

During the Spring Budget announcement, Chancellor Sunak made it clear that while the economy would be strained during and after lockdown, its recovery could not come at the expense of UK climate goals.

Little over a month after the budget announcement, the Department for Business, Energy and Industrial Strategy (BEIS) proposed an extension to the Climate Change Agreements (CCA) scheme.

No doubt, this move was designed to engage with businesses that already fit the criteria of the scheme but were unable to join it previously and in doing so allow them to benefit from the reduced CCL cost and the environment to benefit from reduced carbon emissions.

2017 saw the Government aim its sights at a 20% improvement in commercial and industrial energy efficiency by 2030, this goal has informed the consultation with that target being upheld in regards to the extension.

The popularity and effectiveness of the scheme are undeniable, with recent analyses demonstrating that 80-100% of businesses were participating in most eligible sectors.

A consensus of this magnitude inspires hope for the UK’s climate goals, given that, of the UK’s total greenhouse gas emissions, 25% are business driven. An evaluation for the 2017 Clean Growth Strategy also showed that up to 22m tonnes of CO2 could be saved through investments in energy efficiency technology.

An open forum

The BEIS has made clear that facilities that do meet the current criteria would now be able to join the scheme for the first time since its initial closure in October 2018.

The Target Period being proposed, in addition to remaining in line with periods 1-4 of the scheme (running from the 1st January 2021 until 31st December 2022), will be supported by a variation of the certification period. Initially planned to end in March 2023, it would be pushed back to June of the same year to allow participants to gain certification for CCL discounts between April and June 2023. The added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

The CCA’s closing in 2018 had shut out new entrants to the scheme; however, businesses fitting the eligibility now have an opportunity to recoup up to 92% on electricity and 83% on gas CCL charges.

Applications to the CCA can be long-winded and complex, however the return on an initial investment of time is huge, especially considering that an average energy intensive business the added certification period, for which facilities will only be certified having met obligations in Target Period 5, will begin on 1 July 2023 and end on 31 March 2025.

Based on these figures, the opportunity presented by Sunak and the BEIS has the potential to dramatically change the landscape of the UK energy industry post COVID-19. Alongside legislation like ESOS, MEES and SECR, the CCA calls for expertise rather than direct action. EIC oversees the entire CCA application process and subsequent management of the service following approval of the application. We will be able to show the fiscal savings based on individual business’s energy consumption and ROI against our typical fees.

Moreover, EIC offers a comprehensive range of compliance services as well as ancillary strategies that can help improve your carbon profile while reducing utility costs.

 

COP26’s race to zero begins

EIC highlights the key points made in COP26 President Alok Sharma’s speech, which symbolised the beginning of the organisations ‘Race to Zero’ campaign, and how business leaders can take a poll position despite the starting gun having already been fired.

Mapping the future

News that the UK will postpone its hosting of the UN climate change conference (COP26) was not unexpected, given the necessity for social distancing that COVID-19 has imposed, however it did raise concerns over the UK’s determination to enact a green recovery post-lockdown.

While the UK track record may, in part, justify some of these concerns, individual safety is not the only benefit of such a delay to talks, for one the nations taking part will need a clear idea of the state of their respective economies once lockdown ends before committing to new policy. 

And from a psychological perspective it might be argued that due to the all-consuming nature of the pandemic when it comes to public and government attention, the conference would not receive the attention necessary if it went ahead this year.

How far we’ve come

Despite the conference now being slated for Q4 2021 (-12 November), Alok Sharma gave a speech last Friday that reasserted the UK’s ambitions and responsibilities with regards to the 2050 net zero target and how the race to zero was already hastening its completion.

The UK, in collaboration with Chile and the U.N., are already leaders of the Climate Ambition Alliance – representing over half of global GDP – however Sharma insisted in his speech that “…we must go further”.

Sharma outlined some of the UK’s major achievements in reducing carbon emissions in the last thirty years:

  • Since 1990 the UK economy has grown by 75% while simultaneously reducing carbon emissions by 43%
  • In the same time, the UK has two offshore wind turbines able to power 2,000 homes, as of 2020 the UK is leading nation for offshore wind capacity
  • Globally, the cost of solar and wind power have dropped by 85% and 49% respectively
  • Over two thirds of the worlds nations can now generate renewable energy cheaper than coal

While details of the path forward remain scant – not surprising given the reasons for postponement – Sharma made it clear that liberating capital to fund green initiatives and widespread support for electric vehicles would be crucial to the UNFCCC’s success.

Approximately 1,000 business leaders, representing revenue totalling in excess £3.5tn have committed to the scheme including British motor giant Rolls Royce. According to the United Nations Framework Convention on Climate Change UNFCCC, around 75% of these businesses have already developed strategies and targets aligned with the 2050 target.

Dr. Alison Doig, international lead at the ECIU (Energy & Climate Intelligence Unit) recently commented on the danger of complacency in the opening stages of such a race. 

“This is not, however, about pushing climate action to some date in the future; no entity can reach net-zero in 2050 without starting now… participants will have to present delivery plans, including setting interim targets for the next decade, by the time COP26 opens in Glasgow next year.”

Clean energy was the first element of the British economy that Sharma cited when referring to the need for green growth after lockdown, making it a pressing issue for business leaders looking to get a head start on net zero. EIC provides comprehensive  support and advice to businesses in the procurement, management and generation of alternative energy sources. Each service forms an element of the robust energy management service that EIC offers.

 

 

 

 

 

 

EIC’s Utility Belt: Tips for more effective utility management

EIC outlines its best advice for intelligent energy management, minor changes that can yield significant savings and the importance of consistency in establishing new workplace cultures.

Technology vs culture 

The majority of your utility belt will be focused on the technology that you are currently using or could utilise in future however there is also a short section on the culture within your business and how that can factor into your success.

Heating and Ventilation 

Comfortable ambient temperature has become something of an assumption, commercially speaking, however the technology behind it often remains unexplored except to establish its basic controls for the user. Given that air conditioning alone can account for up to 30% of a site’s energy consumption, this is a significant oversight that, sadly can be solved very simply.

Sealing off or switching on 

A common method of controlling indoor temperatures is by sealing buildings, preventing windows being left open, however this can actually exacerbate the overall costs trying to be mitigated. It means air conditioning will be working overtime during hotter periods but also that air circulation may take a dip, meaning higher concentrations of CO2 and dampened performance from staff as a result.

IoT connectivity across sites can use occupancy monitoring and responsive temperature and air quality control to mitigate these issues. The provision of real-time data streams means that you can control individual spaces across large sites, maintaining utility usages that are responsive to demand and need.

Casual is smart 

Enstating a casual dress code during acutely hot or cold weather conditions means that staff will be able to offset their own demand on heating or cooling, not to mention be more comfortable in their work. 

Dig for victory

Planting trees is also a relatively cheap and environmentally friendly way to offset heating costs, since they provide shade and fresh oxygen as well as absorbing latent humidity in the air.

Lighting 

Intelligent lighting control can save 30-50% on energy costs automating this utility according to occupancy and respective demand means that you will not have spaces unnecessarily drawing power that isn’t being utilised. 

Let the sunshine in 

Not always an option depending on how sites are initially designed, however by using automated lighting, you can schedule lights to power down during daylight hours and reactivate once night falls. 

Using what you have 

The installation of LED bulbs for better efficiency and a longer lifespan can be an added boost to light use efficiency without being disruptive to pre-installed equipment, motion sensors are another low-impact option that help ensure that light is never wasted.

Professional culture 

As social creatures, culture is effectively the software that our communities run on, understanding this means that you can leverage your professional culture to become more energy efficient with a minimum of cost.

Empowering your team 

The use of environmental posters can help remind team members that their actions have weight in something larger than themselves. Small adjustments like the use of power strips also make it easier for them to adopt the positive habits that will be the foundation of your new professional culture. 

Communicate that computers should be shut down at the end of the day rather than left in standby, especially before the weekend. It has been estimated that a company with 200 PCs could save £12,000 annually this way. 

Breaking ranks 

2020 has demonstrated many things, among them our ability to work remotely and effectively and how doing so can help foster trust between managers and staff members. Encouraging this way of business means you can reduce or re-purpose the amount you are spending on office space and its attached utility costs. The same can be said of meetings that might’ve taken place on-site, by using video technology to bridge these physical gaps you reduce the occupancy on your own sites and the utility usage along with it.

Measure for measure 

Meters and sub-meters are essential tools in understanding the energy needs of a site as well as what areas have the highest concentration of usage. Armed with this information you are better equipped to make policy decisions pertaining to both technology and culture within your utility management. The Carbon Trust has found that a site meter can save 10% in energy costs while sub-metres, which allow you to pinpoint areas where demand is highest, can offer a further saving of 30%.

Going the extra mile

There are a number of additional features that can be added to the design of many sites to both off-set and reduce utility costs including on-site solar generation & storage, combined heat and power and demand side response schemes.

EIC can create a comprehensive and all-inclusive package for your business that oversees all aspects of utility management from metering & monitoring to IoT empowered devices that keep you connected to site data 24/7.

Open architecture technology affords access to all your vital business systems, meaning EIC can communicate with, control and report on any aspect of any site including heating, lighting and ventilation. Our services page contains full details of our offerings.

 

 

 

 

 

The green gold rush: CCA extension proposed

EIC explains the government’s proposed extension to the climate change agreements initiative (CCA), the benefits of compliance and how EIC can ensure you qualify.

CCA: How and why

The climate change agreements initiative was established to incentivise the continued and effective implementation of energy efficiency strategies among the most energy intensive industrial sectors.

CCA encourages businesses to streamline their energy usage by offering a 93% reduction on electricity, and a 78% reduction on other fuels accrued as a result of the climate change levy (CCL).

Since its inception in 2013, approximately 700,000 tonnes of carbon emissions have been prevented each year, with businesses using up to 2.3 TWh less energy or enough to power 140,000 homes.

The need for such legislation becomes painfully obvious when framed in the context of energy wastage, in the City of London alone businesses are losing £35m each year this way according to a Green Alliance think tank report.

Originally, the initiative was due to conclude in March 2023 however Chancellor of the exchequer Rishi Sunak announced in the spring budget that there would be consultation on a possible two-year extension to the initiative.

The show goes on

While 9,000 facilities across the UK are already benefiting from the CCA, this extension is estimated to be worth as much as £300m annually in CCL discounts, for the businesses already taking part in the scheme as well as new beneficiaries that would now be able to apply.

It works by encouraging businesses to make improvements to site energy efficiency over an eight-year period. In return, businesses would receive a discount worth as much as £300m annually on CCL bills.

Given the financial uncertainty that COVID-19 continues to inspire, and cooling attitudes towards sustainable development and practices, the news of an extension is welcome on all fronts.

“Extending the Climate Change Agreement scheme will give businesses greater clarity and security at a time when they need it most. This extension will save businesses money while cutting emissions…”

-Energy Minister Kwasi Kwarteng

The consultation will cover proposals for the addition of a new Target Period, from 1 January 2021 to 31 December 2022, an extension of certification for reduced rates of CCL for participants 31 March 2025 and finally, to re-open the scheme, allowing eligible facilities not currently participating to apply to join.

Businesses that had previously missed the opportunity to join the scheme now stand a chance of taking advantage of these savings whilst contributing to a greener economy.

However, it should be noted that the criteria of eligibility for the scheme is not under review, rather the extra time will allow businesses to implement strategies that make them eligible in time for the levy discount to bear fruit.

The new gold rush

The extension proposed, should it be approved, presents a significant opportunity to both current beneficiaries and new comers to the scheme, provided they have the reporting mechanisms in place, to adhere to the scheme.

However, businesses that wish to take advantage of this opportunity in future will need to ensure that they are fully compliant with the scheme as soon as possible, in order to reap the most benefit.

EIC’s expert team of carbon consultants and data analysts are dedicated to offering your business a comprehensive CCA service from initial assessments through data analysis to actionable strategy.

Stay ahead of changes as the clocks spring forward

This weekend will see the official start of British Summer Time (BST), as clocks will spring forward one hour on Sunday 29 March 2020. How can IoT controls help you adapt to the clock change?

The clock change accelerates the seasonal trends towards lower demand during the warmer, lighter summer months.

Historically, the scale of peak power reduction following the clock change has been around 10%. However, early forecasts show an expected 5% drop in average demand for the week following the change. An unseasonably mild winter has kept demand levels depressed in general this year.

The advent of demand management and significant developments in energy efficiency and IoT controls have made the UK consumer more proactive when it comes to when and how they use electricity. It can be seen in the graph that overall demand, before and after the clock change, is trending downwards.

The role of renewables

The increase in wind and solar capacity in recent years has contributed to the overall demand reductions. Higher volumes of on-site renewable capacity allow more generation to be provided off-grid as homes and businesses generate their own electricity supply during windy or sunny spells. This reduces demand on the national transmission system. The high levels of solar availability during the summer season were a particularly strong influence on demand levels this year as on-site solar panels increased embedded generation, reducing demand requirements for the transmission network.

Renewables continue to deliver a growing percentage of the UK electricity mix. The 2019 share for wind, solar, hydro and bioenergy electricity sources was 31.8%, up from 27.5% in 2018.

How clock change impacts behaviour

The graph above shows how the peak demand changes before and after the clock change. The earlier evenings cause an increase in electricity demand as consumers use more sources of light and heat. Post-change, a longer day-time means that less lighting is used through the day and also has the effect of pushing daily peak demand to later in the evening.

The graph shows that over the last five years before the clock change, peak demand occurs at around 6.30pm in the weeks leading up. However, once the hour is gained peak demand occurs later in the day, at around 8.00pm on average.

The impact of coronavirus

As the COVID-19 situation has developed it has become increasingly clear that there will be an impact to demand levels. The graph below shows the effect of the temporary closure of schools and some businesses, with peak demand forecast to fall around 1GW on average week-on-week. The combination of the further closure of offices and the clock change will likely see demand drop heavily over the coming week.

React to changes in real-time

How can you best react to changing demand patterns and sources of generation? How can you ensure time-consuming but critical processes affected by the clock change are carried out efficiently?

With IoT-enabled controls, your business can access all the key information about your sites usage on a single platform. This allows you to make instantaneous changes to multiple sites at the touch of a button.

One of our multi-site clients previously spent three weeks making adjustments ahead of the clock changes. This involved engineers attending each site and changing multiple systems. With our system we could make the same changes in a matter of seconds.

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Science-Based Targets

A number of large corporations are leading the way in a bid to tackle climate change, with science-based targets.

What are science based targets?

Science-based targets are ambitious emissions reductions objectives, set out by businesses to specify how much they need to reduce their carbon emissions by, to limit temperature rises through global warming. They are considered a positive way to transition to a low-carbon economy.

This transformative action is a consequence of the Paris agreement in 2015 where 195 of the world’s governments committed to prevent climate change. A target was set, limiting global warming to below 2°C above pre-industrial levels, to a level of warming of 1.5°C.

The targets set for businesses to reduce GHG (greenhouse gas) emissions to meet this target, are referred to as ‘science-based’ if they are in-line with this temperature goal.

A united initiative

An initiative for this was set up by CDP, World Resources Institute (WRI), the World Wide Fund for Nature (WWF), and the United Nations Global Compact (UNGC). It focuses on companies that have set science-based targets to highlight the positive effects such as increased innovation, strengthened investor confidence and improved profitability.

In addition, the initiative:

  1. Defines and promotes best practice in science-based target setting via the support of a Technical Advisory Group.
  2. Offers resources, workshops and guidance to reduce barriers to adoption.
  3. Independently assesses and approves companies’ targets.

What are the benefits of setting science-based targets?

There are many benefits to setting science-based targets. As well as saving the planet it;

  • Illustrates excellent CSR – for large corporates there is almost a responsibility to take action against climate change, science-based targets are a way to do this.
  • Delivers a competitive advantage – helps your business to stand out in a crowded marketplace.
  • The whole company can be involved – you can engage both internal and external stakeholders to help your business achieve or even exceed your targets.
  • Provides Investor confidence – 52% of execs have seen investor confidence boosted by targets (sciencebasedtargets.org).
  • Increases innovation – 63% of company execs say science based targets drive innovation (sciencebasedtargets.org).

How do you set a science based target?

There are three science-based target (SBT) setting approaches:

  1. In a sector-based approach the global carbon budget is divided by sector and emission reductions allocated to individual companies based on its sector’s budget.
  2. With an absolute-based approach all companies will equally work towards the same percent reduction in absolute emissions.
  3. Economic-based approach – A carbon budget is equated to global GDP and a company’s share of emissions is determined by its gross profit, since the sum of all companies’ gross profits worldwide equate to global GDP.

How do businesses get involved?

For a business to get involved in the initiative there is a simple 4 step process to follow:

  1. Submit a letter to say you are committed to the scheme.
  2. Develop your own science-based target within 24 months.
  3. Submit your target for validation.
  4. Announce your target.

838 companies are currently taking science-based climate action and 343 companies have approved science-based targets.

How EIC can help

We can help you create science-based targets as part of a Carbon Management Plan that can also incorporate Net Zero goals. We’re already partnering with leading UK private and public sector organisations supporting them to transform their operations in line with ambitious targets that will help to save the planet and future-proof their business.

EIC can assist in meeting your science based targets by:

  • Establishing your carbon footprint to act as your baseline
  • Provide recommendations to reduce your carbon impact
  • Set your target to reduce your carbon footprint to meet the 5°C objective
  • Create an ongoing Carbon Management Plan
  • Create and publish all documentation required for the scheme
  • Work with you to embed the strategy into your business
  • Assist you with carbon offset strategies

We can also provide marketing packages for use both internally and externally, to assist with CSR around your targets.

An update on ESOS Phase 2

The ESOS deadline for Phase 2 was 5 December 2019. Unlike Phase 1, no extra time has been issued to allow for late submissions. Any qualifying organisations who did not complete their assessment and submit a compliance notification by the deadline are at risk of enforcement action. Penalties issued in Phase 1 for compliance failures ranged up to £45,000 with a potential maximum fine of £90,000.

Compliance Notices

ESOS Regulators are currently issuing compliance notices to all UK corporate groups who they believe should have participated but they haven’t yet received a notification of completion from.

If you receive this, you must inform the regulators whether you are;

  • in the process of completing your compliance, or
  • provide evidence you have already submitted your notification, or
  • advise that you do not qualify for ESOS

ESOS submissions

You can find a published list of all businesses who have made a submission via the ESOS notification system as of 1 February 2020 here.

Further evaluation on the effectiveness of energy audits and ESOS can be found here.

ESOS support

If you need urgent support with your Phase 2 compliance, talk to EIC today. Our dedicated team of ESOS Lead Assessors and highly trained Energy Auditors will work hard to help you comply as soon as possible, and support you in any conversations with the Environment Agency.

After ESOS compliance

It’s vital that you don’t let your compliance go to waste. ESOS aims to highlight where companies can make energy improvements, cut wastage and lower costs. Use these opportunities to improve your operations and make significant energy savings. The most common areas for energy savings are lighting, energy management through smarter energy procurement, metering, monitoring and controls, and air conditioning.

SECR

If your business complies with ESOS, it’s highly likely you will need to comply with Streamlined Energy and Carbon Reporting (SECR) too. SECR was introduced in April 2019 as a framework for energy and carbon reporting. Its aim is to reduce some of the administrative burden of overlapping carbon schemes and to improve visibility of energy and carbon emissions for large UK organisations.

SECR can also help businesses on their first steps to meet the UK’s 2050 Net Zero target. Companies in scope of the legislation will need to include their energy use and carbon emissions in their Directors’ Report as part of their annual filing obligations. They will also need to report any energy efficiency actions they have taken within each financial year. If the coronavirus is likely to cause a delay to your accounts, there is guidance here.

Talk to EIC on 01527 511 757 or email info@eic.co.uk if you need any further advice on ESOS or SECR. We’re here to help.

Consultation to improve MEES

The Department for Business, Energy & Industrial Strategy (BEIS) has published a consultation to seek views on proposed targets for the Minimum Energy Efficiency Standard (MEES). Currently MEES make it unlawful to grant new leases to properties with an Energy Performance Certificate rating of F and G.

The Government’s options

The Government has identified two potential trajectories for strengthening the PRS (Private Rented Sector) Regulations. These aim to unlock the economic opportunities of low carbon growth, and deliver important energy and carbon savings:

  • The Government’s preferred route is that all non-domestic privately rented buildings achieve a Minimum Energy Efficiency Standard of a B rating, by 1 April 2030. This is provided the measure (or package of measures) required to reach an EPC ‘B’ proves cost effective.
  • The alternative option is that all non-domestic privately rented buildings reach a ‘C’ rating by 1 April 2030, if cost effective.

In both cases, the Government recognises that not all buildings will be able to reach the required minimum standard. In this instance the Government proposes that landlords can continue to lease their building (from 2030) providing they can prove that the building has reached the highest EPC band that a cost-effective package of measures can deliver.

The impacts

BEIS estimates that using the ‘B’ rating EPC route, an investment of approximately £5 billion up to 2030 is required. The estimated average payback time would be 4-5 years. Their modelling suggests this will translate to £1 billion in bill savings for business in 2030. This would deliver an overall value of £6.1 billion to the UK economy. The annual benefit to businesses by using this option is projected to be approximately double that of the ‘C’ rating EPC.

Regardless of the option chosen, BEIS proposes that existing exemptions will continue to apply. This means that landlords will be required to carry out upgrades that are cost-effective, with an expected payback on energy savings of seven years or less. If the work cannot meet this criteria then landlords are able to register an exemption, valid for five years.

The proposed timescale

The Government has asked whether a single implementation date of 2030 is appropriate for landlords to meet the determined rating. As an alternative it has been suggested that incremental targets leading up to 2030 could be introduced. This would encourage landlords to improve the EPC rating of their buildings over time.

The consultation is expected to close on 7 January 2020.

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Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the timeliest updates you can find us on Twitter and LinkedIn. To find out more about our Minimum Energy Efficiency Standard (MEES) solutions click here.

ESOS Phase 2 – Deadline Approaching

By this date (5th December 2019) all companies that qualify for ESOS must have submitted notification of their compliance with the Environment Agency (EA) or risk enforcement action. There is still a considerable amount of work to do to ensure that all of the ~10,000 qualifying organisations are fully compliant.

Penalties for non-compliance are high

Fines for non-compliance could be severe and scheme regulators will issue fixed penalties for a variety of offences. These include:

  • Failing to notify of compliance or to maintain sufficient records (up to £5,000)
  • Failing to undertake compliance activities or making misleading statements (up to £50,000 plus £500 per day up to 80 days)

Businesses that are subject to a penalty will have their details published online.

An arduous task if not prepared

In order to ensure compliance, businesses need to calculate their total energy consumption; this can be an onerous task if sound internal data collection processes are not already in place. Appropriate compliance activities should then be completed covering significant energy consumption or 90% of total energy consumption. Finally, ESOS compliance must be reviewed and signed-off by a qualified Lead Assessor, of which there are a limited number.

Environment Agency external audit

ESOS compliance is subject to an external audit by the Environment Agency (EA). As such it is critical for businesses to ensure compliance activities are delivered to a high standard. In ESOS Phase 1, the Environment Agency audited approximately 1 in 20 businesses that notified compliance. Many of the enforcement penalties related to maintenance and accuracy of records.

Leniency is unlikely

Regulators are less likely to be lenient in this phase of ESOS than they were in Phase 1. This applies to both late compliance and the standard of compliance activity such as energy audits. The deadline is in just two months and businesses that qualify still have an opportunity to ensure compliance, although quick action is required.

The benefits of ESOS

If engaged with effectively, ESOS serves as an excellent way for businesses to identify ways in which they can reduce their energy consumption as well as associated costs and carbon emissions. EIC have engaged with many businesses that have implemented energy saving opportunities following their ESOS Phase 1 compliance activities.

Why choose EIC?

Whether it’s ESOS, SECR, or CCAs, EIC will work with you to reach compliance deadlines and targets. In Phase 1 of ESOS our team identified 2,829 individual energy efficiency opportunities, equivalent to 461GWh or £43.9m of annual savings across 1,148 individual audits. We also helped over 300 ESOS Phase 1 clients avoid combined penalties of over £48m, based on maximum fines.

To find out more about how we can help you comply and implement recommendations post ESOS compliance, call us on 01527 511 757 or email esos@eic.co.uk

Net Zero UK

The action will require the UK to reduce net greenhouse gas emissions to nothing over the next 30 years. This is a more ambitious target than the previous, which was at least an 80% reduction from 1990 levels.

The decision follows the Net Zero report, by the Committee on Climate Change (CCC), which was commissioned by the government to reassess the UK’s long-term emissions targets. The report recommended the 2050 net zero target for the UK, while issuing a 2045 target for Scotland and a 95% reduction in greenhouse gases by 2050 for Wales.

Representatives of the Scottish and Welsh governments have already announced intentions for the nations to aim for these targets, with the Welsh government aiming to go further than the CCC advice; targeting net zero emissions no later than 2050.

Is this achievable?

The report by the Committee on Climate Change states that the net zero target is possible with known technologies, alongside behavioral and societal changes in people’s lives. The organisation has forecast that that the target is also within the expected economic cost that Parliament accepted when legislating the previous 2050 target under the Paris Agreement.

The report does come with the caveat that net zero is only possible if clear, sensible and well-designed policies to enable reductions in emissions are introduced across the country in a strict timeline. The CCC highlights that current policy would not meet even the previous target.

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An update on Smart Export Guarantee

The Department of Business, Energy and Industrial Strategy (BEIS) has published a response to their consultation on the future for small-scale low-carbon generation, which sought views on policy proposals for a Smart Export Guarantee (SEG).

The SEG will require suppliers with at least 150,000 domestic customers to provide a minimum of one tariff offer to small-scale low-carbon generators. Exporters of up to 5MW capacity of anaerobic digestion, hydro, micro-combined heat and power, onshore wind, and solar photovoltaics are eligible for payment.

It is the government’s opinion that small-scale low-carbon electricity generation should be supported by competitive, market-based solutions. To this effect, the government will not specify a minimum tariff rate in order to allow the market to develop. However, a supplier must provide payment greater than zero at all times of export.

The SEG is a replacement for the Feed-in Tariff (FiT), which closed to new generators in March 2019. The Feed-in Tariff scheme was originally introduced in April 2010 in order to incentivise the development of small-scale renewable generation from decentralised energy solutions. Generators were paid a fixed rate determined by the Government, which varied by technology and scale.

How will this impact you?

All suppliers that meet the SEG criteria will be required to offer at least one tariff by an expected date of 31 December 2019, providing small-scale generators with a choice of who they want to export to.

Currently, there are very few suppliers that offer tariffs of this nature. However, as the deadline approaches it can be expected that all larger suppliers will begin to offer their own options, allowing generators to choose the best tariff for themselves.

Stay informed with EIC insights

Our Market Intelligence team keep a close eye on the energy markets and industry updates. For the most timely updates you can find us on Twitter and LinkedIn Follow us today.

Visit our webpage to find out more about EIC Market Intelligence and how we keep our clients informed at a frequency to suit them.

An insight into SECR

SECR will require all quoted companies, large UK incorporated unquoted companies, and limited liability partnerships (LLPs) to report their energy use and carbon emissions relating to gas, electricity, and transport, and apply an intensity metric, through their annual Directors’ reports.

 

Summary of the Government’s proposed SECR framework

From April next year, large organisations in the UK will need to comply with the SECR regulations. The new scheme is part of the Government’s reform package.

Its aim is to reduce some of the administrative burden of overlapping carbon schemes and improve visibility of energy and carbon emissions. As such, it will be introduced to coincide with the end of the current Carbon Reduction Commitment (CRC) Energy Efficiency Scheme.

SECR will build on the existing mandatory reporting of greenhouse gas emissions by UK quoted companies and the Energy Savings Opportunity Scheme (ESOS).

 

Who needs to comply with SECR?

SECR qualification will follow the Companies Act 2006 definition of a ‘large organisation’, where two or more of the following criteria apply to a company within a financial year:

  • More than 250 employees.
  • Annual turnover greater than £36m.
  • Annual balance sheet total greater than £18m.

There is no exemption for involvement for energy used in other schemes – e.g. Climate Change Agreements (CCAs) or EU Emissions Trading Scheme (ETS).

 

What are the reporting requirements?

From 1 April 2019, affected organisations will be required to:

  • Make a public disclosure within their annual directors’ report of energy use and carbon emissions.
  • Report using a relative intensity metric e.g. tCO2/number of employees.
  • Provide a narrative on energy efficiency actions taken during the reporting period.

Reporting will align with an organisation’s financial reporting year.

 

Is anyone exempt from SECR?

Yes – those exempt from complying with SECR include:

  • Public sector organisations.
  • Organisations consuming less than 40,000kWh in the 12-month period are not required to disclose SECR information.
  • Unquoted companies where it would not be practical to obtain some or all of the SECR information.
  • Disclosure of information which Directors think would be seriously prejudicial to interests of the company.

 

There seem to be similarities to ESOS – can ESOS compliance help with SECR?

Yes. Though ESOS and SECR are separate schemes, and will continue as such, the information from your ESOS compliance can be used to support SECR reporting.

 

Where do I start with compliance?

The detailed guidance for SECR will soon be published. EIC can assist with compliance as well as providing bespoke reporting to ensure that you have real visibility of your energy and carbon emissions both at organisational and site level.

If you would like to know more about SECR, what it means for your business visit our Streamlined Energy and Carbon Reporting (SECR) service page.