Future carbon reduction measures

While the UK may not have had the best of summers in 2009, the trend in global temperatures is still upward – and the search for ways of reducing carbon emissions to the atmosphere is intensifying. Alan Aldridge, Executive Director of the Energy Services and Technology Association (ESTA), outlines some of the carbon reduction measures that facilities managers will have to respond to over the coming months.

Riding the wave of new legislation

The European Union has been taking the lead on climate change issues recently – and the result of its ‘20-20 by 2020’ climate and energy policy is starting to be felt in businesses and public sector organisations across the UK. The policy means the EU overall delivering a 20% reduction in carbon emissions (with individual countries doing more or less), as well as meeting a target of 20% renewable energy, by 2020 – just a decade away. For the UK, this means a 2020 saving of 34%, as set out by the Committee on Climate Change, and cannot include any emissions offsets. A challenge of this magnitude will require Government to be more ambitious in almost every aspect of energy and carbon saving legislation.

There is also an interesting footnote; the EU emissions target could go up to 30% (which would mean 42% for the UK) if the world achieves a binding international agreement on climate at the end of 2009 in Copenhagen. The initial target is already ambitious – 42% will require even greater strides.

The Carbon Reduction Commitment

One of the major policy measures to achieve the kind of reductions required is the EU’s Emissions Trading Scheme, which applies to energy-intensive industries across the European Community. Participants must have allowances for every tonne of carbon they produce. The scheme works by getting firms to invest in energy efficiency (and so reduce emissions) or buy allowances to emit carbon (from others with more than they need), whichever is cheaper. By restricting – and progressively reducing – the total number of allowances available, total emissions are steadily cut.

This ‘cap-and-trade’ scheme is well-established now and policymakers in the UK have decided to extend the principle to the large energy users who do not, however, have energy-intensive processes. The Carbon Reduction Commitment (CRC) will include large property companies, universities, large public sector organisations and Government Departments – and at the other end of the scale, all publicly funded schools.

Aside from schools (which will be included in their local authority emission totals but will not have to provide separate accounting to the administrator of the scheme) and Government Departments, other participants will be those which meet the basic entry conditions – they have half-hourly electricity metering and an annual electricity consumption of 6,000MWh or more (a bill of approximately £500,000 a year).

All those with half-hourly electricity metering (whether mandatory or voluntarily installed) will be contacted by the scheme administrator, the Environment Agency, in autumn 2009. Those contacted are required to supply details of electricity usage to see whether they are to be included or not – those who do not meet the consumption threshold still have an obligation of information disclosure. Note that the qualifying year was 2008 – so there is nothing that can be done now to alter eligibility.

For those who are included or ‘captured’ by the scheme, it begins in earnest in April 2010, although the first sale of allowances will not take place till a year later. Allowances will be sold at a fixed price of £12 per tonne for the first three years, to get participants used to the accounting process. The first sale in March 2011 will, unusually, cover the previous year and the following 12 months. All other sales will be for the following year which means participants will have to forecast demand fairly accurately if they are not to lay out too much money to start – or have to buy additional allowances on the spot market at the end of the accounting period.

Although electricity demand is the qualifying criterion, participating organisations must account for at least 90% of all energy consumption. So that means gas, oil and solid fuel – not transport fuel though, which is not included under the scheme.

For multi-site organisations, this may pose a problem. Those taking part will have to account for energy usage from all ‘core sources’ (defined as electricity down to Profile Class 5 and 73.2kWh for gas). ESTA calculates that this typically amounts to an annual spend of around £7-8,000 per site at current energy prices. So should your organisation be included in the CRC you will be required to account for all sites with this size of energy bill. And if the ‘core sources’ on larger sites do not in themselves cover the full 90% of consumption across the whole portfolio, then many smaller sites will have to be metered and accounted for as well. This may mean investment in some form of automatic meter reading (AMR) or the installation of automatic Monitoring & Targeting (aM&T) systems across a much larger part of the portfolio than originally envisaged.

However, the installation of advanced metering may well prove cost-effective for a wide range of organisations that are captured by the CRC. Partly this is due to the fact that while the CRC is revenue-neutral for the Government, with funds raised from allowances being returned to participants, there are several incentives to improve energy performance. First, the allocations are on the basis of improvement as shown in a league table of participants. Adequate metering is essential for optimising performance and securing a better position in the table. But there are an ‘early action’ incentive which is specifically for the installation of aM&T systems.

Figure 1. CRC implementation timeline. Source: Defra (click to enlarge)

Other impending measures

There are other reasons to consider upgrading the metering capability, which are connected to other impending pieces of legislation. The 2010 revision of the Building Regulations will mandate a further substantial jump in performance – some 25%. The Regulations already offer an allowance against the carbon targets for those who have installed aM&T while requiring AMR in all zones of over 500m2.

The Building Regulations revisions are being driven by the requirements of the European Energy Performance of Buildings Directive (EPBD), which is also responsible for the introduction of Energy Performance Certificates (EPCs) and perhaps more significantly Display Energy Certificates (DECS). DECs are currently only required for public buildings of over 1000m2 visited by large numbers of the public. However, the Directive is currently being revised in Brussels and the indications are that the size threshold will be drastically reduced – to 250m2. In addition, the remit may be extended to cover the private sector. In fact, a number of private sector organisations are already using DECs as a valuable tool not just in cutting consumption but in engaging staff and senior managers. The key to DECs is that they provide a snapshot of how well the building is being run (as opposed to EPCs which indicate how well it might run if it operated to design specification all the time). DECs are inherently easier to produce and indeed the latest aM&T systems are approved to produce DECs – another reason to consider these systems.

The Government has recognised the value of advanced metering in reducing emissions and is proposing that all businesses should receive these by 2014. However, that will be more than three years after the start of the CRC. Investment now should more than pay for them before that time.

Figure 2. Business case for automatic Monitoring & Targeting (aM&T) by spend and number of sites.

Managing energy

Finally, there is the question of competent operation. Like most technology, energy efficiency systems are at their most effective only if people know how to operate them properly. While the stories of sophisticated control equipment lying idle and unused are becoming much rarer, there is still a need for a common approach to energy management and a standard process for assessing excellence in energy management.

That is why ESTA has been working with partners around the world to develop a series of energy management standards, along the lines of the quality standards (ISO/EN 9000) and the environmental management standards (ISO/EN 14000). The new ISO/EN 16001 international energy management standard will be unveiled by BSI at the end of September.

In a sense, this ‘closes the circle’. We have standards for products, for processes and for quality and environmental management systems. Now we will have a recognised international standard for energy management. With just a few months before the world discusses how to make deep cuts in its use of fossil fuels, this seems a uniquely appropriate time to talk about management of our energy resources.

The Energy Services and Technology Association (ESTA) represents over 100 major providers of energy management equipment and services across the UK. For more details visit the website at: www.esta.org.uk

< Prev		Next >