Real estate sustainability

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Courtesy of WSP | Parsons Brinckerhoff

Under the Carbon Reduction Commitment (CRC), all organisations using more than 6,000MWh of half-hourly metered electricity will be participants in CRC unless those supplies are already covered by Climate Change Agreements. Are you affected?

What is the CRC?
The CRC is a new mandatory form of carbon trading which aims to improve energy efficiency and reduce the amount of carbon dioxide emitted in the UK. Around 5,000 large public and private sector organisations will be involved in the CRC and many of these will be from the real estate sector.

Who will be obligated and when?
Any organisation which has at least one half hourly electricity meter and settles electricity on the half hourly market will be required to monitor and report on their energy use. Any of these organisations that then have annual electricity consumption through all their half hourly meters of at least 6,000 MWh (an approximate billing of £500,000) must then purchase carbon allowances.

The CRC starts in April 2010. However, the qualification year for the scheme is the calendar year 2008 and organisations should now be acting to confirm their 2008 energy usage.

What will the costs be?
Carbon allowances must be purchased for all of an organisation’s emissions (excluding transportation and activities covered by a Climate Change Agreement or the EU Emissions Trading Scheme). These must be purchased in advance from the Government and will initially be priced at a fixed cost of £12 per tonne. This will be the equivalent of almost £40,000 additional cost on a 6,000 MWh electricity bill. From April 2013 the price of carbon will fluctuate with prices established via an auction mechanism. The total amount of credits available for purchase will reduce year on year, thus encouraging energy efficiency.

In addition, the Government will then publish an annual performance league table showing the comparative performance of all participants. The revenue raised from selling allowances will be recycled back to participating organisations based on their league table performance. The aim of the scheme is to be cost neutral and to create a direct incentive for all organisations to reduce their emissions, but there will be winners and losers.

How is WSP Environment and Energy assisting Clients?
WSP is currently working with clients to benchmark their energy use and develop effective strategies to reduce consumption, looking at both their existing portfolios and their next acquisitions and developments.

We can provide a range of services to prepare your organisation for the CRC including:

  • Working with you to establish a CRC strategy.
  • Measurement of property portfolio energy and CO² emissions data.
  • Establishing carbon management reporting and tracking systems.
  • Identification of immediate, low cost carbon reduction strategies.
  • Preparation of carbon reduction master plans for managing the long term reduction of CO².
  • Assessing options for on-site low carbon and renewable energy generation.
  • System engineering and property upgrades to reduce emissions.
  • Low or zero carbon new build solutions.
  • Emissions data and reporting for CRC compliance management.

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