CRC costs: Will you pay more or less this year?

There is lots of detail in the CRC simplification document and it’s not immediately clear what the impact will be on this year’s annual report. It would be helpful to hear from public sector participants (and local authorities in particular) who have started to consider whether the changes will increase or decrease their annual reported emissions.

You will be affected differently depending on whether you previously included non-core supplies in your annual report.

If you included any non-core supplies (in an RML) in your previous annual reports (i.e. you were  required to include some non-core supplies because your core supplies made up less than 90% of your total footprint OR you chose to include some non-core supplies voluntarily):

  1. If the non-core supplies you reported were any fuel other than electricity or gas, your costs will be reduced as these fuels are now excluded (i.e. gas oil, kerosene, waste);
  2. If the non-core supplies you reported were gas supplies consuming 73,200kWh/year or less, your costs will be reduced as these ‘small gas supplies’ are now excluded;
  3. If the non-core supplies you reported were electricity supplies through profile class 01 or 02 meters, your costs will be reduced as these meter types are now excluded;
  4. If the non-core supplies you reported were electricity supplies through profile class 03 or 04 meters, you costs will increase as you must now report this consumption.

If you did not previously report any non-core supplies (i.e. your core supplies made up 90% or more of your total footprint):

  1. There will be no change to any fuels other than electricity or gas; you did not report them previously and they are now excluded;
  2. There will be no change to gas supplies consuming 73,200kWh/year or less; you did not report them previously and they are now excluded;
  3. There will be no change to electricity supplies through profile class 01 or 02 meters; you did not report them previously and they are now excluded;
  4. If you have any electricity supplies through profile class 03 or 04 meters, you costs will increase as you must now report this consumption.

Other changes that may affect your emissions:

  1. If you have gas supplies that were classified in the footprint year as consuming 73,200kWh/year or less, but which have now increased their consumption to more than 73,200kWh/year, your costs will increase as you must now report them. The previous rules only required assessment during the footprint year of the Phase, with classification not changing during the Phase even if consumption went up, but the new rules require gas supplies to be assessed annually.
  2. Conversely, if you have gas supplies that were classified in the footprint year as consuming more than 73,200kWh/year, but which have now decreased their consumption to less than 73,200kWh/year, your costs will decrease as you can now exclude them.
  3. If you have gas CHP installations, the reporting requirements will change. Instead of reporting input fuel (gas) at a conversion factor of 0.1836kgCO2 per kWh, you will report self-supplied electricity at a factor which is lower than the grid average factor (2010 figure 0.47916kgCO2 per kWh). If any of the electricity generated is supplied outside of your CRC participant organisation, you may still exclude it as unconsumed supply.

Many participants will find they have some increases and some decreases in emissions as a result of the above changes; however, there are likely to be winners and losers. For example, a large rural county with many schools using oil may reduce its overall emissions because oil is now excluded from the Scheme. Conversely, a small city or unitary authority using exclusively electricity and gas may see a significant increase in reported emissions due to the inclusion of profile class 03 and 04 meters.

We recommend undertaking a review of your supplies and CRC emissions as soon as practicable, in order to prepare for any change in financial liability during the 2012-13 compliance year.