CRC Energy Efficiency Scheme – What is it and how might it affect me

June 18th, 2010 by Stuart

What is the CRC?

April 1 2010 saw the start of the UK CRC Energy Efficiency Scheme (aka Carbon Reduction Commitment), however it is clear that many businesses are still in the dark about what it is, how it works and whether it might affect them.

In brief the CRC is the UK Government’s mandatory scheme to encourage businesses and public organisations to take steps to measure and reduce their carbon emissions, and it attempts to achieve this via some simple (in theory) steps

1) All organisations covered by the CRC are required to calculate their estimated emissions based on their activities

2) They are then required to purchase allowances from the UK Government that will cover these emissions

3) Annually they are required to calculate their actual emissions, and dependent on whether they are better or worse than the purchased allowances, they will reclaim the cost of the allowances purchased plus or minus a bonus/penalty amount (initially of up to 10%)

This is an annual process so each year businesses will need to commit part of their cash flow to purchasing allowances, at the end of the year the business will receive this cash back (subject to the bonus/penalty) and will also be required to purchased allowances for the coming year.

Anyone covered by the CRC will therefore have a permanent cash flow impact, and may also be liable for a profit impact should their estimate be incorrect (very likely).

Who is covered by the CRC scheme?

To quote the Dept of Energy and Climate Change

Organisations are eligible if they (and their subsidiaries) have at least one half-hourly electricity meter (HHM) settled on the half-hourly market. Organisations that consumed more than 6,000 megawatt-hours (MWh) per year of half hourly metered electricity during 2008 qualify for full participation and need to register with the Environment Agency, who is the administrator for the scheme .Organisations that do not meet the 6000MWh threshold will have to make an information disclosure of their half hourly electricity consumption during 2008, which they submit once per phase. It is estimated that initially around 5,000 organisations will qualify for full participation, including supermarkets, water companies, banks, local authorities and all central Government Departments. Qualifying organisations will have to comply legally with the scheme or face financial and other penalties. A further 15,000 will have to make an information disclosure.

So in this initial phase the scheme will not directly affect SMEs although 2 caveats apply

1) The UK Government is committed to extending the CRC scheme to cover more and more businesses and organisations eventually covering most UK businesses

2) As many of us who have ever been part of a larger supply chain knows, what affects large businesses tend to be transmitted down to their suppliers.

This is the first in a series of articles trying to demystify the CRC along with blogs at www.waypoint-consulting.co.uk

Future posts will cover other aspects of the CRC scheme, how organisations can prepare for the scheme and how crucially they can use the scheme as a catalyst to save money by thinking more about how to reduce their energy consumption.

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Is social media entering a new phase?

May 27th, 2010 by Stuart

For months we have all had to endure endless hype and bluster about Web 2.0 and the upstoppable rise of social media such as Facebook, Twitter and the others. Over the past few weeks we have finally started to see the limitations inherent within these new technologies and hopefully a more realistic perspective.

From the UK election apparently being the first Web 2.0 Uk election, instead most of the interested stemmed from the TV debates. Irrespective of your opinions on whether these debates represented a big step forward in our democracy or not (and personally I feel not) it is undeniable that they were one of the defining and memorable events in an otherwise unmemorable election campaign.

We have also see the uproar as people realise the significance of the privacy changes made by Facebook earlier in the year, forcing Facebook into an embarrassing U turn.

Most recently we have had the incredible spectacle of a union leader tweeting updates from the highly emotive and challenging negotiations between Unite and BA. It is easy to see why Tony Woodley expressed “surprise” at the tweeting by joint leader Derek Simpson.

Do all these collectively signal the demise of social media? Of course not, but I do feel that it may indicate the start of the transistion from childhood into adulthood for the technology and more importantly the public’s relationship with the technology.

Rather like the first internet bubble in the 90’s, we all had unrealistic expectations of the Internet and often mis-called the winners and losers in the first technological “landgrab”. Once all the hype had settled, once the irrationality had been replaced with a more critical and objective perspective, then the Internet was able to fundamentally change the way society and business operate. I rather feel that we are seeing a similar process starting to happen with Web 2.0, hopefully we will start to enter a more rational phase in which the technologies start to find their proper place, people start to be more objective in their use of these technologies, and businesses will start to question which of these technologies will be beneficial to them and really start to work out how to use them for delivering real benefit.

Until then we will just have to continue with the notion that a business with no noticable income stream can go from startup to being worth $1bn in around 2 years. Sounds familar to the dot com bubble? Will Twitter be one of the survivors of Web 2.0 or one of the over-hyped failures? Only time will tell

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Increasing your IT Efficiency while reducing your Carbon Footprint

March 23rd, 2010 by Stuart

One of the biggest changes facing businesses over the next few years is about to get underway. The UK Government’s introduction of the CRC Energy Efficiency Scheme which commences in April 2010 will have a profound effect on how businesses will need to monitor, control and reduce their energy use. It forms the cornerstone of the UK Governments legally binding commitment to reduce carbon emissions by 80% by 2050. For businesses needing to understand the carbon impact of decisions will become second only to understanding the financial impact.

In order to improve anything, it is first necessary to be able to quantify it, this is as true for CO2 Emissions as for anything else. It is essential therefore to be able to measure your starting point, this is known as your Carbon Footprint. A ‘carbon footprint’ measures the total greenhouse gas emissions caused directly and indirectly by a person, organisation, event or product. Once you have your footprint, this should form the basis for both ongoing Monitoring and Action Planning.

Action Planning can be used to identify potential opportunities to reduce the footprint, and caninclude a range of measures, some simple and quick, others more involved. Monitoring will enable you to understand the impact of changes on your overall footpint and will assist in demonstrating your commitment to, and compliance with, legislation such as the CRC.

In the vast majority of cases the changes that will deliver a reduction in the carbon footprint are the same changes that will deliver a more cost efficient, more manageable and ultimtely more effective IT environment.

In future posts I will consider in more details the various areas that need to be considered when developing an IT Carbon Footprint, and the sort of changes that can deliver the improvements that should benefit the profitability and effectiveness of the business as well as ensuring a reduction in CO2 emissions.

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Rural Broadband

March 23rd, 2010 by Stuart

At least the politicians in the UK are now talking about rural broadband, but the cynic in me wonders whether this has more to do with an upcoming election rather than a serious desire to sort out this issue.

Gordon Brown talks about the need to provide “superfast” broadband to all homes in the country while David Cameron talks about putting the UK top of the European broadband league. Admirable sentiments, but unrealistic. Let’s look at Gordon Brown’s statement first – superfast broadband for all – what exactly does he mean by “superfast”, is he talking about the definition of superfast being 50Mbps. Given the inability to delivery these sort of speeds even in densely populated urban areas, how exactly does he suggest that we can achieve these speeds in rural areas where the distance to the nearest exchange can prevent any reliable broadband service from being delivered? This doesn’t even begin to address the fact that broadband speeds are one of the most “flexible”  definitions known to man.

David Cameron has also been talking recently about broadband, and talks ambitiously about putting the UK at the top of the European league for broadband provision, while suggesting that part of the BBC licence fee could be diverted to fill in gas where the market doesn’t work to increase provisions. It seems to be unrealistic to aim for top of the league without having any real understanding as to how you can improve the low speeds that dog most rural communities and will continue to drag down the average that is part of the reason we are so low in the current standings.

Both leaders talk knowingly about the benefits of broadband, about its ability to transform business models, to enable home working, to enable the provision of audio or visual services such as on-demand TV, but neither of them seem to be able to say how much this will cost or how it will be delivered, instead relying on bland statements about markets, encouraging provision etc.

Living in a rural community I am fortunate enough to get a reasonably reliable broadband service, touching 2Mb, not enough to deliver most TV on demand services, but enough for most of my current needs. There are many people who are not this fortunate and have an unreliable service or can’t get broadband at all. Do I expect to get the sort of speeds available in cities? No, of course not and what’s more I don’t even want politicians to start suggesting that I will because quite frankly I don’t believe them when they say that. I personally am willing to accept a 2 tier service, and believe that most rural communities are, but feel that the current provision falls a long way short of what is currently possible.

The problem with delivering rural broadband is well understood; copper wiring over extended distances. That being said, the solution must therefore be to either overcome the problems with copper wires or avoid using them.

If any government is serious about addressing this issue it would do well to “encourage” the deployment of fibre between all BT’s exchanges and their cabinets. The vast majority of rural households and businesses are in all probability closer to a street cabinet than they are to their local exchange. Extending the fibre network to the cabinet will have the effect of reducing the amount of copper wiring involved, and hence should deliver an immediate improvement in broadband speeds for the vast majority or rural homes and businesses.

Where it is not possible to do this, the mobile providers should be looked at to see whether their existing network infrastructure can be used to plug the gaps.

While this well understood process is ongoing, it should then be possible to continue to undertake the research necessary to understand the new technologies that can be brought to bear on delivering high speed broadband services.  

Government should consider encouraging the deployment of fibre/mobile based improvements in the short term via the use of through tax credits and a streamlined planning process and could then support the R&D via an “open-source” model. That is to say that Government could fund the research work into new methods of delivering broadband, and make this research publically available through something like the GNU licence. That way the market can do what it does best; work out how to exploit the technology to deliver chargeable services to as many customers as possible and we can all benefit from improved broadband provision.

And one final word for those who thing that rural broadband isn’t an issue for them, remember the rural communities and businesses are likely to be your customers, suppliers or even both.

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