CRC Network | Implications of the CRC for the Public Sector
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CRC Network | Implications of the CRC for the Public Sector. Guest Speakers' presentations from CRC Network event 07/10/09 The CRC Network connects professionals who will be involved in the Government’s Carbon Reduction Commitment Scheme. It is an independent network, providing a forum for solutions sharing, idea generation, and mutual understanding. By joining the CRC Network, you will gain access to our Discussion Forum where you can connect with other professionals who are preparing for the CRC. View comments, questions and advice posted by others, or create your own posts. You can join at www.crcnetwork.co.uk
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CRC Network | Implications of the CRC for the Public Sector
- 1. Implications of the Carbon Reduction Commitment for the Public Sector
- 2. The CRC Network Forum www.crcnetwork.co.uk
- 3. Guest Speakers Introduced by Paula Sussex, Head of Business Consulting, Atos Origin Jenna Owen – Senior Policy Advisor – DECC Overview and update of policy and legislation Karen Lawrence – Project Manager – LGiU Preparing for the Carbon Reduction Commitment in local authorities James Pitcher – Climate Change Manager – TfL London Underground Case study for London Underground; strategy, challenges, opportunities Karl Heidel – Communications Manager – NHS Sustainable Development Unit Reducing carbon in the NHS; strategy, challenges, opportunities.
- 4. CRC Energy Efficiency Scheme An overview of the CRC and update on policy Jenna Owen 07 October 2009
- 13. Any queries [email_address] Government Response http:// www.decc.gov.uk/en/content/cms/consultations/crc/crc.aspx CRC Web pages www.decc.gov.uk/crc
- 15. Carbon Trading Public Sector Karen Lawrence Project Manager, Centre for Local Sustainability, LGiU
- 18. For more information contact: [email_address] or 020 7554 2875
- 20. October 14, 2009
- 21. October 14, 2009 Preparing for the CRC Strategy, Challenges and Opportunities James Pitcher, Climate Change Manager
- 27. London Underground Emissions estate
- 28. Scope of Transport for London (Parent Organisation) TfL non transport energy usage is 513,000 MWh per annum £circa £3m year one outlay
- 36. Reducing Carbon in the NHS Challenges Strategy Opportunities
- 49. Carbon Reduction and the NHS - Challenges
- 54. Reducing Carbon in the NHS Karl Heidel Communications Manager NHS SDU
- 55. Thank you for attending the CRC Network event. Look for future CRC Network events on our website CRCNetwork.co.uk. Now please join us for drinks!
Notas do Editor
- 1. Single sale of allowances in April 2011- reduce impact on cash flow 2. Greater flexibility in how organisations participate – voluntary disaggregation of SGU’s 5. Technical changes to make scheme more effective and easier to implement adopted after considering stakeholder response
- 3. Grouping and Disaggregation of English universities and colleges. While qualification for participation will be assessed on the basis of the University and Colleges as a group, once they have qualified the colleges will participate individually unless they choose to aggregate either with other colleges of the same university or with the university itself. 4. Machinery of Government changes. Government will adopt a slightly different approach to „Designated Changes‟ for „Machinery of Government‟ based changes. This is because such Government changes often do not involve legally distinct bodies, or equivalents to Significant Group Undertakings, upon which the „Designated Change‟ rules are based. Recycling baselines and historic averages will be updated for any „Machinery of Government‟ or ‟Relevant Decision‟ change rather than restricting updates to public sector equivalents of SGUs which was the case under the Designated Changes policy proposed.
- The idea of having a revenue neutral scheme received strong support in the previous consultation and has been retained
- Creates a reputational driver Strengthening the financial incentives over timing by phasing in a maximum bonus or penalty of 50% by year five.
- Thank you and good evening ladies and gentlemen. Please try not to disapprove of any latecomers that might arrive during slot, it is more than likely the fault of my employer.... My name is James Pitcher and I am Climate Change Coordinator at London Underground. For the past year I have been heavily involved in LU’s efforts to reduce transport-related emissions of carbon dioxide. My involvement started back in early 2008 following the development of LU’s Carbon Emissions Reduction Plan. Over the last year, LU has invested considerable time, effort and money planning for the forthcoming CRC and also on a range of initiatives designed to reduce carbon dioxide emissions. LU has identified carbon as a key performance metric for the business and we have worked hard to ensure that climate change mitigation is at the heart of our business activities. From this perspective, we are well equipped to deal with the requirements of the incoming Carbon Reduction Commitment and over the next 10 or 15 minutes, I would like to share how we have prepared for this new legislation with you. [NEXT]
- I would like to begin by explaining a little about our current upgrade programme. Passengers in London are witnessing the biggest transformation in the Tube's history. We are busy rebuilding the entire network, from tracks to trains and signals to stations. As London’s largest consumer of electricity, I shall then give some details about LU’s energy usage and how we have identified the emissions which are captured by the CRC regulations. I would also like to share with you some of the carbon management programmes that LU have implemented and lastly how the organisation has been preparing for the forthcoming legislation. [NEXT]
- With over 3.5 million journeys made each weekday, and more than one billion journeys every year, the work to renew the world's oldest metro system is needed now more than ever. If all these journeys were made by car, the additional 2.5 million more cars on the roads everyday would increase congestion and add 1.3million tonnes to London’s annual Carbon Dioxide (CO2) emissions. The Mayor of London has set ambitious reduction targets to reduce carbon emissions by 60 per cent by 2025 from 1990 levels. Increased use of public transport is a large part of the solution, and LU’s upgrade programme increases peak capacity into central London by almost a third. While the average car journey within London is responsible for the release of 138g of carbon dioxide, the average Tube journey results in the generation of just 48g, making the Tube one of the most carbon efficient forms of new transport capacity. LU is keen to maintain its position as a low carbon transport provider for London and to continue to implement measures that will increase our efficiency and reduce our overall carbon impact. LU is making major investments to meet London’s growing demand for transport which will help encourage modal shift and move people away from higher carbon transport options, such as cars, to public transport. The line upgrades programme will give London and our customers a world class service. This means an advance in reliability, capacity and quality of service. However, the line upgrades and increased train frequencies necessary to deliver the increase in passenger capacity will result in increased energy demand and associated carbon emissions. To mitigate this impact LU is currently implementing techniques that can be applied to ensure that we are as efficient as possible with the energy that we use and how renewable technology can be applied to power our operations wherever possible. [NEXT]
- Carbon management and climate change mitigation is treated as business as usual for LU. [NEXT] We have a dedicated resource within the organisation - the Climate Change Strategy Team – which provides a s ingle point of contact and expertise for the company. It is the teams aim to mainstream the issue of climate change within our corporate strategy and provide an effective response to future legislation - like the Carbon Reduction Commitment. Carbon & Energy Management has its own section within The Plan (the top 40 projects at LU that are completed each year) and we have implemented several performance metrics. We have an energy reduction metric on our station scorecards and carbon efficiency is included as one of only 10 strategic metrics for the whole business that directly affect our Directors scorecards. [NEXT] Published in 2008, our Carbon Emissions Reduction Plan demonstrates how the organisation can Deliver increased capacity and remain carbon efficient. We have already been working to reduce our carbon footprint in high impact priority areas highlighted by the report: • Improved energy efficiency from 750V electricity supply plus the application of regenerative braking on the Circle, District, Hammersmith & City and Metropolitan Lines will reduce the forecasted energy impact by 35 per cent, saving up to 10,000 tonnes carbon dioxide each year.
- In addition to purchasing carbon efficient assets and implementing innovative engineering techniques, LU can also contribute by improving our own energy efficiency. [NEXT] LU’s electricity consumption in 2007/2008 was 0.4 per cent of all the electricity used in the UK and 2.8 per cent of London’s total usage, making LU the largest consumer of electricity in the capital. [NEXT] To identify where the biggest carbon reduction opportunity areas were and also to ensure that we as an organisation fully appreciated our responsibilities under the Carbon Reduction Commitment, the starting point was to fully understand our carbon footprint. The Carbon Reduction Commitment is placing the impetus on organisations to reduce their greenhouse gas emissions. And I believe that measuring your corporate carbon footprint (and by way of doing this) identifying the emissions to be included in the CRC should be the first step you make. LU’s report has been prepared using the best practice GHG Protocol methodology and is the most comprehensive estimate of the LU carbon footprint yet prepared. It includes the emissions resulting from LU’s use of electricity and other fuels, and supporting activities such as waste management, staff travel and, where possible, the emissions of LU’s contractors. LU’s total carbon footprint in 2007/2008 was 750,000 tonnes CO2e. Carbon emissions from electricity use accounts for 82 per cent of total emissions, two thirds of which arise from train services. [NEXT]
- The first step for LU when gathering emissions data for the CRC was to identify which emissions where to be included. Under the requirements of the draft legislation, emissions arising from transportation activities are exempt from the scheme. The carbon emissions released whilst providing the train service in 2008 were in the region of 500,000 tonnes of carbon dioxide. This can be removed from our emissions estate under the CRC regulations. The remaining emissions arise from: Natural gas consumption at Greenwich Power Station Electricity usage from the lighting, lifts, escalators and other assets at our stations The 1,000 groundwater pumps that operate continuously to prevent our lower Tube lines from flooding Mid-tunnel ventilation fans used to keep our passengers relatively cool And finally utilities consumption at our 16 depots and 24 head office buildings With emissions arising from transportation activities exempt from the scheme one might be forgiven for thinking that LU’s remaining Carbon Reduction Commitment obligation is very small. Unfortunately, it is not. The organisation still consumes in the region of a quarter of a million MWh of electricity for what we term as ‘non traction’ purposes. In the first year of the scheme where we are required to purchase allowances retrospectively and for the future, it is expected that LU’s payment will be in the region of 3 million pounds. [NEXT]
- LU is part of the Transport for London parent organisation, along with Surface Transport, London Rail and Corporate. TfL is part of the Greater London Authority which is covered by unique legislation – the GLA Act so discussions were held directly with DECC on structure of participation. DECC has agreed the that Transport for London should participate individually as the parent organisation, covering its four ‘modes’ of London Underground, Surface Transport, London Rail and Corporate (head office portfolio).
- To fully assess our requirements under the legislation and to communicate this at an early stage to the rest of the business, we started to calculate the extent of our CRC obligations in June 2008. [NEXT] The simple fact that we are a large organisation spread over a wide geographical area immediately proved to be problematic. As you can imagine, LU has an incredibly complex electricity distribution network with countless supply points, substations and over 1,000 electricity meters. Identifying the emissions that are to be included in the scheme has proved to be time consuming! A metering strategy was developed at the end of last year to plan the installation of AMR across the business at key sites and to raise awareness of the scheme with our directors. This strategy highlighted areas of the network where we lacked accuracy in terms of the data that we were receiving, for example the Jubilee Line Extension. Examining our metering estate closely allowed us to identify weak areas like this and we have since been able to address the situation. In accordance with the latest guidance document, we have also included an uplift of 10% in the amount of allowances that we will need to purchase for all areas where we are likely to submit estimated meter readings. [NEXT] For annual reporting purposes, LU has developed carbon management software that has now been adjusted to identify the emissions to be included within the scheme and also provide an indication of the likely financial implications. The tool is centrally managed and all electricity data relevant to the CRC is passed to one individual to minimise the chances of a mistake or error in reporting. More recently, and again for the sake of simplicity, we have passed a request to the scheme regulator, the Environment Agency, to ask that all letters be passed to one central location rather than to all of the billing points across our network. [NEXT] We have also worked closely with our Energy Supplier to develop a list of all the identification numbers for the electricity meters across our network and have also asked them to provide us with the total annual energy consumption associated with the relevant supply contracts. I believe that it is important to calculate your consumption yourselves as well as considering the information provided by your supplier – after all it will be you buying the CRC allowances and not them.
- [NEXT] In addition to monitoring what an organisations emissions are now, I believe that it is also important to measure what is likely to happen to your company’s emissions in the future. The Carbon Reduction Commitment is likely to be around for some time – do you know what your company’s carbon emissions will be in 2020? In order to plan what implications the scheme will have on your company, it is important to think about future years of the scheme and not just how you are going to get through the first year. We have spent a great deal of time modelling our future emissions at LU and have produced estimates of our full carbon footprint right up until the year 2040. In addition, once the scheme has started in earnest, LU will monitor its carbon emissions regularly throughout the year through use of the carbon management software. Any dramatic change in emissions, which might effect the number of allowances we require, can be identified early and appropriate plans put into place. [NEXT] We have increased awareness of the scheme within the company. A steering group was established as soon as possible and key members of staff have been involved from the outset. The Carbon Reduction Commitment became a boardroom agenda item at LU in autumn 2008 and it is important to ensure that all senior members of staff are fully briefed on what impact the scheme will have on their organisation. At LU, our executive committee, strategic planning, contract requirements, business planning, finance and legal teams have all been informed about the regulations. Earlier this year, LU also ensured that the financial implications of the Carbon Reduction Commitment are included within the business case development process for future projects. This is really important. Some of our projects (for example doubling the size of Victoria station as part of a congestion relief scheme) could have big repercussions in terms of additional allowances that we will need to purchase in the future. Again, consider how the regulations will affect your organisation in the future and not just today. Finally on this point – participate! The regulations are still in draft format so respond to all of DECCs consultations (including the one that is running at the moment), if there is something that you are not entirely happy with as an organisation, take this opportunity to raise it with the scheme regulators now! [NEXT] Can you take early action? The benefits of taking early action are clear. A higher league table position with all the financial and reputational benefits that it will bring are attractive to all organisations. LU has been exploring how we can make best use of the early action metrics for the last year. [NEXT]
- As well as the complexities of gathering the data required for participation within the scheme, there are some other features of the legislation that have sometimes made involvement in the scheme complicated for London Underground. [NEXT] As one of the largest landlords in London, identifying who is responsible for the emissions arising from a lot of the commercial premises at our stations can prove quite complex. Accurately measuring the emissions which arise from these sources can also prove to be tricky. [NEXT] The simple fact that we are a large organisation spread over a wide geographical area can prove problematic. A great deal of time has been spent visiting sites across the network to check the functionality of electricity meters and to educate staff in their operation. [NEXT] As I alluded to earlier, emissions arising from transportation are not currently included within the scheme. But what does this term actually mean? Without our 1,000 groundwater pumps continually working 24 hours a day, 7 days a week, 365 days each year, half of the network would flood – therefore is it not fair to say that the emissions arising from these assets are critical to moving passengers around the network and therefore ‘transportation emissions?’ This might be wishful thinking however.....
- LU recognise that the Carbon Reduction Commitment presents both risks and opportunities for the organisation. [NEXT] Although the financial outlay for inclusion within the scheme may represent a risk in terms of cash flow, the prospect of receiving a recycling payment that is larger than the initial payment must not be overlooked. Organisations actively seeking to reduce their carbon footprint as part of their business practices may have these achievements recognised and benefit from the scheme financially. The prospect for the price of carbon allowances to increase in the future must also be considered. [NEXT] Arguably the chief incentive to improve energy performance is the league table. Its value lies in transparency and comparability in assessing different companies’ commitment to reducing their carbon footprints. The reward for good reputation and efficiency will be a place at the top of the table and the good headlines that go with it. As a widely publicised Government scheme, a culture of naming and shaming is likely to arise in the media and the damage to reputation caused by being at the base of the league table could be severe. [NEXT] The CRC might be a lightly regulated scheme in terms of how many participants will be audited each year, however one must bear in mind that any audit process is likely to be strict. The importance of keeping up-to-date evidence packs cannot be stressed enough. [NEXT]
- LU recognise that the Carbon Reduction Commitment presents both risks and opportunities for the organisation. [NEXT] Although the financial outlay for inclusion within the scheme may represent a risk in terms of cash flow, the prospect of receiving a recycling payment that is larger than the initial payment must not be overlooked. Organisations actively seeking to reduce their carbon footprint as part of their business practices may have these achievements recognised and benefit from the scheme financially. The prospect for the price of carbon allowances to increase in the future must also be considered. [NEXT] Arguably the chief incentive to improve energy performance is the league table. Its value lies in transparency and comparability in assessing different companies’ commitment to reducing their carbon footprints. The reward for good reputation and efficiency will be a place at the top of the table and the good headlines that go with it. As a widely publicised Government scheme, a culture of naming and shaming is likely to arise in the media and the damage to reputation caused by being at the base of the league table could be severe. [NEXT] The CRC might be a lightly regulated scheme in terms of how many participants will be audited each year, however one must bear in mind that any audit process is likely to be strict. The importance of keeping up-to-date evidence packs cannot be stressed enough. [NEXT]
- I would like to finish my presentation by giving a few recommendations based upon some of the experiences that we have had whilst preparing for the scheme: (List above) I hope that you have found this overview of how LU has been preparing for the CRC useful, that you enjoy the rest of your day and that our network will get you home safely this evening. Thank you. [NEXT]
- I would like to finish my presentation by giving a few recommendations based upon some of the experiences that we have had whilst preparing for the scheme: (List above) I hope that you have found this overview of how LU has been preparing for the CRC useful, that you enjoy the rest of your day and that our network will get you home safely this evening. Thank you. [NEXT]