MacRoberts Education e-update 04/03/10

CARBON REDUCTION COMMITMENT LOOMS LARGE

This e-update is a brief reminder of the key elements of the Carbon Reduction Commitment Energy Efficiency Scheme (the "Scheme") which is due to be phased in from April this year. The Scheme is to be a mandatory cap and trade scheme that will apply to large public and private sector organisations. Failure to register for the Scheme will result in a potentially hefty fine. Organisations which may be affected should be considering the implications now.

The Environment Agency and DECC have recently issued some (mostly) helpful guidance on the
operation of the Scheme, which can be found by clicking here.

How does the Scheme apply to Universities and Further Education colleges?
The Scheme will apply to organisations rather than to individual sites or properties. In the case of Universities, it is clear from the draft of the Order which will implement the Scheme and from the guidance that in Scotland, Wales and Ireland, Universities will be considered to be a single organisation for the purposes of the Scheme and will have to account accordingly. In England, the situation is broadly the same, except that the collegiate Universities of Cambridge, Durham and Oxford are to aggregate their energy consumption.

As far as Further Education colleges are concerned, they are not specifically dealt with in the draft Order, nor in the guidance. Nonetheless, they will potentially qualify for the Scheme under generic provisions of the Order. Probably in most cases as a single organisation.

Who must register for the Scheme?
In order to assess its obligation to register under the Scheme, the University or College must assess the total half-hourly metered electricity directly supplied to it during the qualification year, January to December 2008. Where the total half hourly electricity supplied during that period was equal to or more than 6,000 Megawatt hours (MWh), the University or College will have to register as a participant under the Scheme. If the energy consumption was less that 6,000 MWh, there will still be a disclosure requirement, although there will be no requirement to participate in the Scheme.

Conclusion
If an assessment of the likely participation requirements for a University or College have not yet been considered, one should be carried out immediately, if only to avoid penalties for failure to register. If it is established that the University or College will have to register for and participate in the Scheme, early consideration should be given to estate management strategies to reduce energy consumption and so to mitigate any negative effects of having to trade in allowances in order to meet obligations under the Scheme.

For further information, please contact Gillian Campbell or Lillian Mackenzie on 0131 229 5046.

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