DRIVE FORWARD THE OPPORTUNITIES OF THE CRC

Industrial companies across the UK have until 30 September to register for the Carbon Reduction Commitment Energy Efficiency Scheme (CRC).  This is a landmark date for companies to ensure they avoid the potential fines of late registration.  However, as Mark Chrimes, Product Manager for Siemens Industry Automation & Drive Technologies discusses, this is just the starting point and for those who prepare well, the CRC offers great opportunities.

The CRC applies to any organisation with half-hourly metered electricity supply. In total around 20,000 UK organisations are affected across the public and private sectors.  Those who had at least one half hourly settled meter and whose consumption was 6,000 MWh or more a year in 2008 - which is being used as the qualification year - through all half hourly meters will be required to participate fully.  It is expected that there will be approximately 5,000 organisations as full participants. 

Up until the end of September 2010, organisations with a half hourly meter must either register for full participation or make an information disclosure on their half hourly electricity.  This information disclosure process will include organisations with consumption below 6,000MWh meaning up to 15,000 companies will be required to take part in this element of the scheme.  A financial penalty will be imposed on organisations who fail to do this by the deadline.

The CRC is designed to drive energy efficiency and carbon savings by giving organisations a financial incentive to do so through emissions trading, and a reputational incentive as the best performing companies will feature in the highest positions in the scheme’s published league table.

To ensure they are best-placed to benefit from the rewards on offer, organisations need to continue to make energy savings and increase their energy efficiency.  After obvious measures such as turning down the heating slightly or ensuring lights are switched off, attention needs to be paid to processes on site to ensure they are as efficient as possible.  In particular, the parts within a plant can affect the efficiency of the site, so these should be thoroughly audited.  However, as with any area that may require investment, it is important for companies to have a clear route to the finance needed for potential upgrades.

The Energy Technology List (ETL) is an element of the Enhanced Capital Allowance (ECA) scheme, a key part of the Government’s programme to manage climate change, designed to encourage businesses to invest in energy-saving equipment.  The ECA provides businesses with enhanced tax relief for investments in equipment that meets published energy-saving criteria.

Manufacturers who want to invest in parts which will help their site become more energy-efficient are rewarded financially through the scheme, so expenditure can be offset.  Specifically, 100 per cent of first year ECAs allow the full cost of an investment in designated energy-saving plant and machinery to be written off against the taxable profits of the period in which the investment is made.

An example of parts which bring energy-saving benefits to a site once installed are variable speed drives and these feature on the list. Variable speed drives not only offer energy-saving benefits, but can increase efficiency on site helping to boost productivity levels and ultimately, profit.

The CRC offers rewards to those companies who continue to reduce their energy consumption and when basic measures for doing this have been exhausted, upgrading the plant is the natural next step.  It is therefore vital that manufacturers can do this with as little cost as possible, meaning the ETL is invaluable.

Siemens plc
Manchester

Can be contacted on

Tel: 0845 7705070
www.siemens.co.uk/automation.