There may have been many confusing changes to the Carbon Reduction Commitment scheme since its introduction last year, but one thing remains true - cutting energy use saves money. Emily Manson explains what's different and describes easy ways to cut energy costs
Since its implementation in April last year, the Carbon Reduction Commitment (CRC) scheme has been fraught with difficulties. First there were criticisms over the way it was publicised, then came the spectacular government U-turn, effectively changing CRC from an environmental ranking system with financial rewards for compliant businesses, to a "stealth tax".
Some 10,000 businesses have already been exempted from the scheme and last month saw further changes proposed, with the coalition announcing "simplification proposals".
The industry can be forgiven for scepticism, but climate change minister Greg Barker set out his stall, saying the plans were to help businesses reduce their emissions without strangling them in red tape.
"Energy efficiency is a no-brainer. It saves money and cuts carbon," he said. "Our proposals will make it easier and simpler for businesses to feel the benefits of using less energy as well as supporting jobs in the energy savings industry."
So, if your business is still required to comply with the scheme, what could the new "simplifications" mean for your operation? Here's what you need to know:
CRC basics: A quick recap The CRC is a mandatory scheme started in April last year to improve energy efficiency and reduce carbon emissions in medium- and large-sized businesses - which are collectively responsible for about 10% of UK emissions.
The scheme provides reputational, behavioural and financial targets to help organisations develop energy management strategies to improve their management of energy use.
Then last year, the Government stunned industry by announcing that the scheme, which had required businesses to install energy meters so that the most energy efficient operations could reap financial rewards, would no longer pay out these incentives, thereby leaving the scheme as purely stick, no carrot.
The latest changes announced last month (June), are now aimed at reducing the overlap between CRC and other green policies, as well as making the scheme simpler. It hopes to reduce the administrative burden on businesses, provide greater certainty to participants about how they comply with the CRC, and allow greater flexibility for businesses in how they take part.
These proposals will go to a formal consultation stage next year but in the meantime comments are being encouraged.
The simplification proposals The current scheme requires businesses to report on emissions from 29 different fuels but this could be reduced to just four, as 95% of emissions come from electricity and gas. It also requires large businesses to participate in groups which are not naturally aligned and these could be scrapped. The qualification process would also be reduced to one step, so businesses would only need to prove they use a certain amount of electricity from a qualifying meter.
In phase two of the scheme, which begins in 2014, the variable pricing auction element for buying allowances could be changed from an annual event to two sales a year, with fixed prices.
Finally, to reduce current overlaps, any Climate Change Agreement (CCA) or EU Emissions Trading Scheme (ETS) site would automatically be exempt from the CRC scheme.
Easy steps to reduce energy In the meantime, the industry is still required to comply with the existing legislation. The £1b a year which is currently spent on energy needs to be reduced through the installation of sub-meters, regular audits and subsequent analysis.
Mark Linehan, managing director of the Sustainable Restaurant Association, says: "Improving energy efficiency across all areas of the business not only helps save fuel and protect the environment but also helps restaurants cut costs, in some cases significantly. A great way to start is to measure energy use."
Once operations have audit trails they can then identify areas where efficiency measures can be introduced. To maximise their effectiveness, audits need to be tailored to the individual business and requirements will depend on the type and size of the operation, but the areas which need to be looked at will generally remain the same.
The areas include:
â- Checking heating and cooling basics - ensure windows and doors are closed when heating or cooling systems are in use and only operate one system at a time - do not heat and cool simultaneously.
â- Developing a culture among staff to minimise the loss of cold air from areas like beer cellars, walk-in freezer/fridges, keg stores and use of strip curtains to keep cold air in.
â- Carrying out energy efficiency measures as part of routine maintenance.
â- Maximising potential energy-saving opportunities during refurbishments. Up to 40% subsequent savings are possible in some projects.
the carbon trust
For help, advice and energy audit templates, the Carbon Trust offers:
â- Free online Action Plan tool to help create audits for hospitality businesses and monitor potential savings
â- Free Energy Analyser tool to help analyse energy consumption, costs and carbon emissions by looking at variations in half hourly energy use, and to identify periods of maximum, minimum and average energy consumption and cost
â- Free carbon surveys for the sector and online footprint calculator
â- Downloadable energy saving checklists for lighting, heating, ventilation, housekeeping and refrigeration
â- Useful guide to consider taking in all things carbon including energy - http://www.tinyurl.com/carbonindicator" target="_blank" rel="noreferrer">www.tinyurl.com/carbonindicator](http://www.tinyurl.com/carbonindicator)
induction hobs take the heat out of energy costs
Although Osso restaurant in Peebles is too small an operation to be required to comply with the CRC scheme, the owners found they were being crippled by increasingly high electricity bills.
Following up an advert in Caterer, head chef and business partner Ally McGrath contacted the Carbon Trust about its interest free loans to help with the cost of installing an induction hob.
McGrath says: "It was easy to get, we just had to prove it was going to lower our carbon footprint. That was simple as we had an electric solid top before, which burned electricity as it was on from 7.30am to close because it took so long to heat up."
He was granted a £5,000 interest free loan in January 2010 and installed a four-ring Control Induction hob and plancha. McGrath says: "We've already paid off the loan and our electricity bills have reduced by a quarter."
"The team love the new system. The plancha is an awesome bit of kit and the speed and controllability of the induction is amazing. With the plancha, we now don't use any frying pans, which also saves on washing up and hot pans being thrown into the sinks."
Induction hobs are obviously energy efficient, but other advantages include cooking speed - it boils water in nine seconds, ease of cleaning - it's a flat surface, and enabling kitchens to maintain an ambient room temperature.
McGrath adds: "It has really made the working conditions in the kitchen much more pleasant as it is a lot cooler in the kitchen now."
top 10 energy-saving tips: easy wins
1 Turn the thermostat down by one degree to save up to 8% on your annual heating bill
2 What gets measured gets managed - start with a benchmark of your past year's energy usage so you can easily set energy-reduction targets
3 Make all kitchen staff aware of simple efficiency measures, such as only turning on equipment when required
4 Plan a maintenance schedule
5 Energy management training can reduce catering energy use by up to 25%
6 Look for the most energy efficient A-rated models for new equipment and consider induction sensors on hobs that turn on off when you cease using them
7 Purchase new energy-efficient equipment with Enhanced Capital Allowances with a 100% tax allowance in the year of purchase
8 Use the right sized pan and put lids on
9 Consider whether the extractor fan needs to be on all day
10 A 20% cut in energy costs can represent the same bottom line benefit as a 5% increase in sales
Source: Sustainable Restaurant Association
keeping cool at jury's inn heathrow
The air-conditioning at Jury's Inn Heathrow has long been programmed to automatically cut off when the room key card is removed by the guest, helping to reduce energy wastage when rooms are vacant.
But this failed to target the unnecessary cooling when air-conditioning was left on throughout the night. To counter this, the hotel introduced a DCS Energy Monitoring system with timer-control software, which allows the hotel to individually control the settings in each room by computer. The timer can be switched off at any point but can be overridden by the guest if required. The total saving between 2009 and 2010 was £36,000 from an electricity reduction of 8.3% in the first year.
Sean Twohig, group risk health and safety manager at Jurys Inn, says joining the Green Tourism Business Scheme (GTBS) in 2009 helped the group to focus its attention on reducing carbon emissions as well as overall energy consumption.
He explains: "One of the areas we assessed is how much energy we use and how much we reduce it by. Between 2009 and 2010 we reduced our spend on fuel by 16%, water by 3.5% and electricity by 4.6% and that was with an increase in room occupancy of 8% across the group."
Overall, the group has reduced its energy consumption by 5% per annum and is the only UK hotel group to have been awarded 29 Gold awards from the GTBS. By 2012, it estimates it will have reduced this by 20% across the group.
"All our employees play their part in implementing our initiatives, from the maintenance team through to housekeeping, which has been a major contributor to our success," adds Twohig.
how to perform an energy audit
â- Look at your last year's usage as an initial guide
â- Walk around the premises at different times to identify where savings can be made
â- Don't just factor in the equipment, also consider staff practices
â- Appoint an energy champion to oversee the audit
â- Talk to your energy provider who should be able to provide metering services and measurement tools
â- Once average use is established, operations can then identify areas where savings can be made and can prioritise actions
â- Useful guide to consider taking in all things carbon including energy: [www.tinyurl.com/carbonindicator
Source: Sustainable Restaurant Association
how to claim tax allowance
Enhanced Capital Allowances (ECAs) enable businesses to buy energy efficient equipment using a 100% rate of tax allowance in the year of purchase. Businesses claim this on energy efficient equipment on the ECA's Energy Technology List.
Energy Efficiency loans are available to small or medium-sized enterprises in England, Scotland and Wales. They can borrow from £5,000 to £100,000, unsecured, interest-free and repayable over a period of up to four years.
Climate Change Levy Exemption Certificates may be available if your business buys renewable energy, or implements other energy-saving measures such as combined heat and power systems.