DECC announces proposals to simplify the CRC Energy Efficiency Scheme

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On 30 June 2011, the Department for Energy and Climate Change (DECC) outlined the changes it proposes to make to the CRC Scheme in an attempt to simplify it and bring about a reduction to the administrative and regulatory burden on participants. Following a consultation process, the changes are due to come into force in April 2013. 

The Scheme is a mandatory trading scheme aimed at improving energy efficiency and cutting emissions for large businesses and public sector organisations in the UK. In essence, affected organisations are required to buy allowances to make emissions equal to the carbon intensity of their qualifying energy/fuel consumption. The types of organisations covered include large offices and data centres and as a result the changes outlined by DECC could have a significant impact on the digital business sector.

Data centres are of particular relevance here because it will be the outsourced service provider that will be responsible for buying the allowances. However, the customer itself is the one that will drive the usage of the data centre and therefore its energy consumption. This is an issue that will need to be dealt with in the agreement between the parties.

The changes proposed by DECC include the reduction of the number of applicable fuels from 29 to 4, the retention of league tables which could potentially damage an organisation’s reputation and the requirement to report on 100% of supplies of the 4 applicable fuels (electricity, gas and, when used in heating, kerosene and diesel).

If you want to find out more about any of the issues in this publication please get in touch with your usual Osborne Clarke contact, or the contact below.

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