CRC Energy Efficiency Scheme Is Bad Policy Better Than No Policy?

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1 CRC Energy Efficiency Scheme Is Bad Policy Better Than No Policy? CES Seminar Thursday 22 November 2012 at hours Room 45A AZ 04 John Davis Sustainability Manager, University of Surrey

2 Carbon Reduction Commitment Energy Efficiency Scheme (CRC EES) What is the CRC How the CRC works What does it mean for the University

3 What is the CRC CRC is a mandatory carbon emissions reporting and pricing scheme to cover all organisations using more than 6,000MWh per year of electricity (equivalent to an annual electricity bill of about 500,000) The CRC came into force in April 2010 and aims to significantly reduce UK carbon emissions not covered by other pieces of legislation The primary focus is to reduce emissions in non-energy intensive sectors in the UK. This complements the role of Climate Change Agreements and the EU Emissions Trading Scheme, which are directed primarily at energy-intensive organisations. In October 2010, the Government announced significant changes to the CRC as a part of the Comprehensive Spending Review. The most significant change was the removal of the recycling payment.

4 How the CRC Works The CRC comprises three primary elements: 1. Emissions reporting requirement Participants in the CRC will need to measure and report their carbon emissions annually, following a specific set of measurement rules. The first annual report of emissions occurred in July A new carbon price Starting in 2012, participants will buy allowances from Government each year to cover their emissions in the previous year. This means that organisations that decrease their emissions can lower their costs under the CRC.

5 How the CRC Works (continued) There are two important changes about buying allowances that the Government announced under the CSR The money raised from the sale of allowances will be retained by the Government rather than recycled back to CRC participants The first sale of allowances to cover emissions in fiscal year 2011/12 will be in 2012 rather than 2011 The price of allowances for phase 1 (introductory phase) was set at 12 per tonne of carbon dioxide in the 2011 Budget.

6 How the CRC Works (continued) 3. Ranking of Participants in a Performance League Table A publicly available CRC performance league table will show how each participant is performing compared to others in the scheme. This is the reputational driver. An organisation s league table position each year will be determined by performance in three metrics: Early Action Metric Absolute Metric Growth Metric The weighting of these three metrics will change over time. In the first year, early action will count for 100% of the organisation s league table score. Over the first few years of the scheme, the early action metric will gradually fade in importance until the absolute and growth metrics receive 75% and 25% weightings respectively in 2014/15 and thereafter.

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8 Ranked Uni's CRC Public League Table Rank Registration Number Organisation Name Weighted Score Emissions (Tonnes of CO2) Early Action Metric (%) Absolute Metric (%) Growth Metric (%) CRC Roehampton University CRC Nuffield College CRC Goldsmiths, University Of London CRC Trinity College, Oxford CRC Robert Gordon University CRC University of Glamorgan CRC Loughborough University CRC The University of Reading CRC The University of Hull CRC University of Surrey CRC Cambridge Colleges' Carbon Reduction Consortium CRC University of Bedfordshire CRC University of London CRC The University of York CRC University of East Anglia CRC University of the West of Scotland CRC Coventry University Higher Education Corporation CRC Imperial College CRC All Souls College CRC Aston University CRC Bangor University CRC Birkbeck, University of London

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10 Carbon Reduction Commitment (CRC) The Sectors targeted generate 10% of UK CO 2 emissions 55 MtCO 2 CRC Aims to reduce CO 2 emissions by at least 4 MtCO 2 by 2020 The HE Sector responsible emissions of 5.4 MtCO 2 in HEFCE is committed to reducing sector emissions by 34% (from 1990 baseline by 2020)

11 GHG Protocol classification of emissions Report to HEFCE on an emissions reporting framework by Arup, CenSA and De Montfort University January 2012

12 Report to HEFCE on sector emissions by Arup, CenSA and De Montfort University (January 2012) The overall footprint results show the total English HE sector emissions for are estimated to be 5.4MtCO 2, with the largest sectors being building energy and the embodied emissions associated with supply-chain

13 What does it mean for the University Improving energy efficiency will save money and improve the organisation s reputation There is a clear financial incentive to perform well in the CRC. We will reduce the number of emissions allowances we need to buy if we cut emissions, putting us at a cost advantage to competitors that have not cut emissions CRC league table an opportunity to enhance the business reputation The CRC performance league table will rate and compare participants carbon reduction efforts. A high ranking could enhance our reputation with customers, suppliers, business partners, employees and investors alike.

14 University of Surrey, Manor Park Campus Energy Supply Strategy Crystal Ball Gazing

15 kgco2/kwh Crystal Ball Gazing Electricity 70 Emissions Factor /Tonne Cost of Carbon University of Surrey, Manor Park Campus Energy Supply Strategy

16 University of Surrey, Manor Park Campus Energy Supply Strategy Crystal Ball Gazing

17 University of Surrey CO 2 Emission Baseline, Growth to & Saving Required for 34% Reduction 35,000 30, ,365 tonnes 25,000 20,000 5,395 11,599 43% reduction from 2011 level (4.8% per annum) Tonnes CO 2 15,000 10,000 5,000 23,580 23,580 27,162 15,563 66% of baseline e.g. 34% reduction CRC Regulated Baseline New Development Internal Temp Extended Hours

18 Contribution to CO 2 Reduction Target from Key Projects 30,000 25,000 3,121 tonne gap ,000 10,706 2,400 1,000 1,500 Tonnes CO2 15,000 27,297 26,269 1,685 10,000 15,563 15,563 5, CRC CRC SH West Zone CHP LIP FC's & LEV's ConCom Op Practice B Change

19 tco 2 /year Electricity Total CO 2 Emissions (tonnes) Stacked bar represents the total emissions for each building shown in order of reduction opportunity Reduction Opportunity Benchmark Emissions BA AC DoK Library Austin Pearce AD AA MS SSP PGMS Hall Complex AW BC BB Students Union

20 tco2/year Heating Total CO 2 Emissions (tonnes) Stacked bar represents the total emissions for each building shown in order of reduction opportunity Reduction Opportunity Benchmark Emissions DoK MS BC Library AY BA Hall Complex AX AW Students Union Nodus CRC Central Stores E&FM AZ

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22 Faculty Reports University Metering system Monthly League Table 1 Aug 2011 to 31 Aug 2011 Site Channel Consum% Consumption Units Cost ( ) AB AB FEPS Electricity ,388 kwh 12, BC BC FEPS Electricity ,404 kwh 7, Duke of Kent DoK FEPS Electricity ,623 kwh 6, BA BA FEPS Electricity ,518 kwh 5, BB BB FEPS Electricity ,165 kwh 5, AA AA FEPS Electricity ,770 kwh 1, ATI ATI FEPS Electricity ,935 kwh 1, AZ AZ FEPS Electricity ,691 kwh Nodus Centre Nodus Centre FEPS Electricity ,350 kwh Avg rate (p) TOTAL ,844 42,

23 Example Faculty/Department Reports Emissions by Channel For Electricity Period: 1-Aug-2011 to 31-Aug-2011 Tonnes Emission of Pollutants in Period No. Channel name CO2 SO2 NOx CO VOC Methane 1 AB FEPS Electricity 71 2 BC FEPS Electricity 47 3 DoK FEPS Electricity 41 4 BA FEPS Electricity 34 5 BB FEPS Electricity 31 6 AA FEPS Electricity 11 7 ATI FEPS Electricity 8 8 AZ FEPS Electricity 5 9 Nodus Centre FEPS Electricity 4 Total

24 Learning Centre Solar Power (10kWp array) Feed-in Tariffs generate income for 25 years index linked Experience of the operation of embedded generator Post Graduate Research Project with ATI

25 Opened April 2010 Olympic Size Pool 350,000 Annual Energy Cost

26 SSP 300kW biomass boiler Biomass boiler and fuel delivery system Underground fuel storage bunker

27 Feasibility Study Wind Scheme Manor Park Initial Wind Resource 2 x 2.5 MW turbines Annual Cost Savings 841,230 Annual C0 2 Reduction 5,880 tonnes (51% of target)

28 2012 People & Planet Green League Institutions 2011 Ranked 114 th Award Class 3 rd 2012 Ranked 47 th Award Class 2:1 University Climbed 67 places in the league - missed a 1 st by 0.5 point Surrey achieves 5 th place in the 1994 sub league

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30 Nottingham 5 th Place - Green League Surrey 47 th Place - Green League

31 EcoCampus & ISO 14001

32 CRC Energy Efficiency Scheme - Summary CRC is a mandatory carbon emissions reporting & pricing scheme CRC has fiscal and reputational drivers ( 12/tonne and public league table) The CSR reduced the impact of the league table The aim is reduce non energy intensive sectors carbon emissions by 4 MtCO 2 by 2020 The scheme is currently in the introductory phase CO 2 cost 12/tonne With the removal of the recycling payment, CRC is effectively an energy or carbon tax Impact for the University 326,000 per annum CRC is on the University risk register, Cap & Trade system predicted to drive up price

33 CRC Energy Efficiency Scheme Is Bad Policy Better Than No Policy? CES Seminar Thursday 22 November 2012 at hours Room 45A AZ 04 John Davis Sustainability Manager, University of Surrey