Financial Implications of the  Carbon Reduction Commitment for the Private Sector
The CRC Network Website www.crcnetwork.co.uk Over 500 registered members to date
Guest Speakers Introduced by Andy Cartland, Managing Director, Acre Chaired by Paul Druckman, Chairman, Trucost Hugo Seymo...
Financial implications of the CRC From zero action to proactive management CRC Network Event 3 March, 2010 Project Ed disc...
Overview <ul><li>The CRC cost factors </li></ul><ul><li>Scenarios:  </li></ul><ul><ul><li>Zero action </li></ul></ul><ul><...
The CRC cost  factors <ul><li>Allowance purchasing </li></ul><ul><ul><li>Government sale </li></ul></ul><ul><ul><li>Second...
<ul><li>Electricity consumption: 50,000 MWh </li></ul><ul><li>Resulting CRC footprint: 26,850 tCO 2 </li></ul>Scenarios:  ...
Cumulative cost of compliance £1.4 M £116 k - £24 k
Effort required to implement Benefit <ul><li>Zero action </li></ul><ul><li>Fine paying only </li></ul><ul><li>Minimum comp...
4 th  Vigo 1-4 Vigo House London W1S 3HT T: 020 3031 4000 W: www.greenstonecarbon.com
Chris Newton Facilities Management Director 3 March 2010 CRC Network The Financial Implications of the CRC Energy  Efficie...
ENERGY: CRC and our commitment to reduce Consumption <ul><li>Group Property are ensuring LBG are ready for the CRC  </li><...
BT is Driving Energy and Carbon Reduction Dr. Bernd Leven – BT Energy and Carbon Unit 03 March 2010
Energy and Carbon at BT? <ul><li>BT consumes 0.6% of the UK’s electricity (in top ten) </li></ul><ul><li>Reduced our UK ca...
BT’s energy and carbon strategy is global and includes travel, fleet, refrigerants, home workers etc. Energy  Efficiency G...
ICT enables other industries to reduce footprint Source: The Climate Group and GeSi: Smart 2020 (2008) Global Emissions in...
Growth in services drives ICT energy consumption Today Increase Future Digital Britain Super Fast Broad Band TV via intern...
BT has established an Energy and Carbon Unit to develop business cases and drive down energy consumption and carbon emissi...
We have developed a CRC model to prioritise actions that deliver the greatest benefits Model Energy Consumption Carbon Tru...
Focus of our strategy are … <ul><li>Carbon Trust Standard Certification </li></ul><ul><li>Automated  Metering (AMR) </li><...
Corporate Agility can reduce your CRC exposure Agile Working Transformation <ul><li>Corporate real estate rationalised </l...
Conclusion and Recommendation <ul><li>The CRC  </li></ul><ul><ul><li>Is an  additional  driver to reduce energy consumptio...
We provide services to reduce energy consumption and carbon emissions Sustainability Strategy Sustainability Business Oper...
Thank you for attending this CRC Network event.  Provide feedback on previous CRC Network events and look out for details ...
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CRC Network | Financial Implications of the CRC on the Private Sector

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CRC Network Event | Financial Implications of the CRC on the Private Sector

Event date: 3rd March 2010

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CRC Network | Financial Implications of the CRC on the Private Sector

  1. 1. Financial Implications of the Carbon Reduction Commitment for the Private Sector
  2. 2. The CRC Network Website www.crcnetwork.co.uk Over 500 registered members to date
  3. 3. Guest Speakers Introduced by Andy Cartland, Managing Director, Acre Chaired by Paul Druckman, Chairman, Trucost Hugo Seymour – Carbon Consultant – Greenstone Carbon Management Cost factors, scenarios and implementation effort for the CRC Chris Newton – Head of Facilities Management – Lloyds Banking Group Case study for Lloyds Banking Group: strategy, challenges and opportunities Dr Bernd Leven – Senior Manager, Renewables, Energy & Carbon – BT Case study for BT: strategy, challenges and opportunities
  4. 4. Financial implications of the CRC From zero action to proactive management CRC Network Event 3 March, 2010 Project Ed discussion document 2 May 2007 Presentation to Jumeirah
  5. 5. Overview <ul><li>The CRC cost factors </li></ul><ul><li>Scenarios: </li></ul><ul><ul><li>Zero action </li></ul></ul><ul><ul><li>Minimum compliance </li></ul></ul><ul><ul><li>Proactive management </li></ul></ul><ul><li>Effort required to implement </li></ul>
  6. 6. The CRC cost factors <ul><li>Allowance purchasing </li></ul><ul><ul><li>Government sale </li></ul></ul><ul><ul><li>Secondary market </li></ul></ul><ul><li>Fines and civil penalties </li></ul><ul><li>Reputation </li></ul>
  7. 7. <ul><li>Electricity consumption: 50,000 MWh </li></ul><ul><li>Resulting CRC footprint: 26,850 tCO 2 </li></ul>Scenarios: Zero action, minimum compliance, proactive management * 20% of allowances bought on secondary market at £18 per tCO 2 Zero Action Minimum compliance Proactive management Allowance cost Recycling payment £0 £0 £257,760 £238,428 £322,200 £346,365 Secondary market £0 £96,660 * £0 Fines £1,396,500 £0 £0 Reputational risk Very high High Low
  8. 8. Cumulative cost of compliance £1.4 M £116 k - £24 k
  9. 9. Effort required to implement Benefit <ul><li>Zero action </li></ul><ul><li>Fine paying only </li></ul><ul><li>Minimum compliance </li></ul><ul><li>Annual carbon calculation </li></ul><ul><li>Yearly data gathering for report preparation </li></ul><ul><li>Allowance purchasing at Government sale and from secondary market </li></ul><ul><li>Proactive management </li></ul><ul><li>Monthly carbon measurement and monitoring </li></ul><ul><li>Programme of reduction initiatives </li></ul><ul><li>Carbon management to forecasts and carbon budgets </li></ul>
  10. 10. 4 th Vigo 1-4 Vigo House London W1S 3HT T: 020 3031 4000 W: www.greenstonecarbon.com
  11. 11. Chris Newton Facilities Management Director 3 March 2010 CRC Network The Financial Implications of the CRC Energy Efficiency Scheme for the Private Sector
  12. 12. ENERGY: CRC and our commitment to reduce Consumption <ul><li>Group Property are ensuring LBG are ready for the CRC </li></ul><ul><li>CRC is a mandatory scheme, starting in April 2010, which aims to improve energy efficiency and reduce the amount of carbon dioxide (CO 2 ) emitted in the UK. </li></ul><ul><li>LBG meet the qualification criteria and must participate fully in the scheme. </li></ul><ul><li>The scheme has a number of detailed reporting and compliance requirements, as well as potential financial and reputation impacts based on performance in the scheme’s annually published league table. </li></ul><ul><li>Participating organisations must register for the scheme by 30 th Sept 2010 (or by 30 th June 2010 if any significant group undertakings will be participating separately). </li></ul><ul><li>Participating organisations must accurately calculate their emissions (irrespective of the type of energy consumed), and purchase allowances, initially sold by Government, for each tonne of CO 2 they emit. </li></ul><ul><li>During the introductory phase (Apr 2010 - Apr 2013) allowances will be sold at a fixed price of £12 per tonne of CO 2 , thereafter these become a market commodity. (NB the same carbon presently costs us circa £170 per tonne in purchased energy costs.) </li></ul><ul><li>The first sale of allowances is in April 2011 and Savings generated from increased energy efficiency will exceed the costs of participation. </li></ul><ul><li>Any organisation that does not comply with its legal obligations under CRC will be subject to financial and other penalties. </li></ul><ul><li>Key Initiatives presently in train: </li></ul><ul><li>Lighting replacement  </li></ul><ul><li>Building management system </li></ul><ul><li>upgrade Dry cooler controls </li></ul><ul><li>Voltage optimisation - PowerPerfector units </li></ul><ul><li>BMS reconfiguration – upgrades et al </li></ul><ul><li>Boiler Burner Controls AMRs </li></ul><ul><li>Carbon Trust standard </li></ul>
  13. 13. BT is Driving Energy and Carbon Reduction Dr. Bernd Leven – BT Energy and Carbon Unit 03 March 2010
  14. 14. Energy and Carbon at BT? <ul><li>BT consumes 0.6% of the UK’s electricity (in top ten) </li></ul><ul><li>Reduced our UK carbon footprint by 58% since 1996 (including renewable energy) </li></ul><ul><li>Plans to reduce our UK carbon footprint by 80% by 2016 </li></ul><ul><li>Plans to reduce our global carbon intensity by 80% by 2020 </li></ul>
  15. 15. BT’s energy and carbon strategy is global and includes travel, fleet, refrigerants, home workers etc. Energy Efficiency Generate Renewable Energy Purchase Low Carbon Energy In CRC Scope Not In CRC Scope Priority of Action 1 2 3 Building energy consumption in the UK
  16. 16. ICT enables other industries to reduce footprint Source: The Climate Group and GeSi: Smart 2020 (2008) Global Emissions in GtCO2e p.a.
  17. 17. Growth in services drives ICT energy consumption Today Increase Future Digital Britain Super Fast Broad Band TV via internet Data Centre services for customers Tenants in BT buildings Reduction Migration to 21 Century Network Energy efficiency programmes
  18. 18. BT has established an Energy and Carbon Unit to develop business cases and drive down energy consumption and carbon emissions across the group Strategy and Policy Operations and Projects Capital - Energy Saving Energy Supply and Data Mgt Energy and Carbon Services Wind for Change Project Energy Efficiency Generate Renewable Energy Purchase Low Carbon Energy
  19. 19. We have developed a CRC model to prioritise actions that deliver the greatest benefits Model Energy Consumption Carbon Trust Standard Certification Automated Metering (AMR) Assumptions on other participants League Table Position Cash Flow Bonus or Penalties Risks Focus for action
  20. 20. Focus of our strategy are … <ul><li>Carbon Trust Standard Certification </li></ul><ul><li>Automated Metering (AMR) </li></ul><ul><li>Energy consumption </li></ul>Achieved in Feb. 2009  Installed voluntary AMR for 96% of the electricity of BT’s 6,000 sites Rolling-out Gas AMR  Launched Energy Savings Programme in 2008 and capital investment programme in 2009 
  21. 21. Corporate Agility can reduce your CRC exposure Agile Working Transformation <ul><li>Corporate real estate rationalised </li></ul><ul><li>Flexible workers are able to work from nearest office, home or customer site </li></ul><ul><li>Home worker impact understood and mitigated </li></ul><ul><li>Technology optimised to enable CO 2 reductions from business activities </li></ul><ul><li>Business travel reduced </li></ul><ul><li>Business costs reduced </li></ul>Carbon Efficient Agile Organisation <ul><li>Information Communication Technology is regarded as a net CO 2 producer </li></ul><ul><li>Corporate Real Estate is not optimised for flexible working </li></ul><ul><li>All workers commute to the office, mainly by car </li></ul>Carbon inefficient organisation with traditional working practices Operational Efficiency in ICT Carbon Impact Assessment Corporate Real Estate Assessment
  22. 22. Conclusion and Recommendation <ul><li>The CRC </li></ul><ul><ul><li>Is an additional driver to reduce energy consumption </li></ul></ul><ul><ul><li>Main driver is energy cost reduction </li></ul></ul><ul><li>BT </li></ul><ul><ul><li>Is in a good starting position for the CRC (Early action and saving programmes) </li></ul></ul><ul><ul><li>Enables your organisation to reduce energy consumption and carbon footprint </li></ul></ul>
  23. 23. We provide services to reduce energy consumption and carbon emissions Sustainability Strategy Sustainability Business Operator Portfolio of Off-the-shelf Services Implementation Planning Assessment IT Services Workforce Flexible Workforce Conferencing Mobility Solutions Field Force Automation CRM Data Centres Low Carbon Managed Application Lower Carbon Hosting and Storage Energy Efficiency Improvement Unified Comms. Unified Communications One voice Video Conferencing Monitoring Unified Infrastructure Services Smart Customer Interactions Homeshoring (UK only) Contact Centre Efficiency Professional Services (IT Audit) Integrating Network & IT services Operational Efficiency For further information please contact Ted Shann [email_address] or tel. 0118 982 1382
  24. 24. Thank you for attending this CRC Network event. Provide feedback on previous CRC Network events and look out for details of future CRC Network events on our website CRCNetwork.co.uk . Now please join us for drinks!

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