Carbon Reduction Commitment

On Wednesday, I spoke about the 'carbon reduction commitment energy efficiency scheme' at a breakfast briefing at the Institute of Directors.  April 1st marked the beginning of the first ‘foot-printing’ year of this scheme which will hit up to 5,000 of the UK’s largest organisations.

Organisations have until 30th September of this year to register.  If they fail to register they will be hit by a £5,000 fine and then a draconian £500 for each subsequent day they don’t register.  The first payments of £12 per tonne of carbon will be made next April and the all important league tables of performance will be released in October 2011.

People at the briefing wanted to know if it is a good idea.  It certainly has merits.  It is the first initiative that has translated national targets into something meaningful for large organisations.  It is forcing people to accurately measure their emissions. 

The league tables with their associated reputational risk and financial penalties are actively encouraging people to take early adopter actions and it has raised the issue of energy use and carbon up the managerial agenda. 

If successful it will also reduce carbon emissions by 4 million tonnes a year by 2020, the equivalent of taking 1 million cars off our roads.

However, there are fault-lines which could undermine the credibility of the initiative.  It excludes transport which obviously weakens its impact.  Worse, I have a gut feeling that private sector organisations will do better than the public sector and this will result in money being transferred from the public to the private sector. 

How are we going to feel if money for a cash-constrained health service ends up being re-distributed to a multi-national company because the latter has a better carbon performance? 

Finally, it is massively administratively complex and I wonder whether a simple carbon tax wouldn’t have a similar impact without creating a ridiculous bureaucracy.

Watch out for a PV Solar Revolution

On 1st April the Government’s feed-in-tariff came into operation.  The initial indication is that the Government may have got its sums wrong and has been overly generous with its tariff which currently stands at around 41.3p per kilowatt hour.   This was based on the assumption that PV (photovoltaic) costs about £5,200 per kilowatt hour.  However, due to an over-production of PV and new supplies of silicon, prices are now as low as £2,600 per kilowatt hour.

Several sharp-eyed firms have spotted this opportunity and we are likely to see a huge surge in the number of solar photovoltaic units on UK roofs.  These businesses are offering housing associations ‘PV for free’ in return for all the revenue from the Feed-in-Tariffs.  One organisation, Eaga, plans to install 1,000 units by the end of the year.  Other companies are exploring the option of leasing business premises’ roofs or even farmers' fields to install solar technology.

It will be interesting to see whether the Government sticks with the current tariff rate or undertakes an emergency review.  A clue may come from Spain and Germany which have recently cut their feed-in-tariff rates due to overdevelopment of PV.

Renewable Energy Awards

On Monday, I was one of the judges at the Renewable Energy Awards, the results of which will be announced in early June.  Award schemes such as this give a real insight into how a relatively new sector is developing.  The award entries starkly demonstrated that one of the biggest challenges the sector faces is the complexity of linking all the new sources of energy into the national grid.

Sophisticated engineering solutions are needed to ensure that we can connect massive off-shore wind farms back to the mainland or that the grid can cope with fluctuating energy flows delivered by intermittent solar or wind turbines.  At the awards we ploughed through a range of entries outlining solutions to these problems. 

The applications were superficially dull and virtually impossible to fully understand but are the essential glue required to fit a massively complex puzzle together.  What was clear was that the UK must have a high quality engineering sector to solve these problems and I hope that the Government and industry continue to invest in this crucial skills base otherwise all this work will head overseas.

Government cuts

On Monday, the Government announced around £6 billion of cuts from public sector spending.    Exactly what the impact of these cuts will be on DEFRA and DECC is still being determined but it did make me think that it will make it much easier for the Government to meet its 10:10 commitment to cut carbon emissions by 10% during the next 10/12 months. 

The simple equation is that less people, less offices and less activity will equate to less carbon.

The great beauty of 10:10 is that it is a clear message which people can quickly grasp and understand.  It is a politician's and publicist's dream.  The downside is that the simplicity hides complexity which while being dull and anorak like is fundamentally important if we are to create truly sustainable solutions. 

Personally, I will continue to try to explain this complexity rather than leap to the easy to grasp sound-bite.

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Trewin has been blogging for Global Action Plan for the past few years. If you enjoyed this week's blog you can find more here.

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