News Archive - CCA

How to control energy costs in the Covid-19 crisis

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Controlling costs has always been good business, but during the COVID-19 pandemic, it is now more important than ever.

With turnover having taken a hit in so many different sectors, the ability to manage overheads could make all the difference to a business’s survival or demise.

Government initiatives like the furlough scheme have helped employers keep wage costs down but what can be done to protect against energy costs?

Spiralling energy costs can sap the life out of a company, so it is important to put a cost-control plan in place and get the power back in your hands, so to speak, wherever possible.

Controlling energy costs can be done through better energy procurement, by introducing a range of energy efficiency measures and by leveraging government help.

Procurement

The price of gas and electricity nosedived during the first U.K lockdown as industry ground to a halt and demand plummeted. But once industry started to open up again and people realised the end of the world wasn’t nigh, prices rallied significantly.

Currently, market conditions are favourable to securing contracts early but, in a volatile energy market such as they one we are currently experiencing, a flexible approach shouldn’t be ruled out when formulating your energy procurement strategy.

Business energy deals offer a wide procurement window for tendering contracts and are more flexible than those available to domestic users in that they can be fixed for anything up to four years.

While it is not possible to forecast prices changes with a 100% degree of accuracy, the best business energy consultants are able to offer informed and impartial advice about the type of contract best aligned to your business’s needs.

Energy efficiency

COVID-19 has changed the way we conduct business, with home-working and Zoom conference calls now the norm.

Companies have reduced their carbon footprint as a result of less road and air miles being used to get to and from meetings, while energy consumption has dramatically fallen as premises remain empty or part-empty.

A greener way of living and working has been one of the few positive spin-offs of COVID-19 and there is an opportunity to build on this once the worst of the pandemic has passed. After all, the cheapest unit of energy is the one you never use.

European Regional Development Funding is still available to SMEs for energy efficiency measures, despite our withdrawal from the European Union.

We would advise businesses to check with their local Chamber of Commerce to see what level of support is being offered as these vary from region to region.

Government help

As experienced practitioners in the handling of Climate Change Agreement applications, we continue to help companies maximise the Climate Change Levy (CCL) discounts available to them.

Companies have been asked to monitor their energy performance against a 2018 baseline instead of the old 2008 baseline and the data is then used by the Environment Agency to set targets for TP5 (Target Period 5, 2021-22).

As well as providing this information in a timely fashion, contact details for the appointed authorised and admin CCA personnel need to be kept up to date, too.

Failure to do so could result in discount notification emails going unread because they’ve been directed to the wrong member of staff or to someone who has either retired or moved on.

The Metallurgical Exemption is another aspect of the CCA that can benefit certain industry sectors.

As a point of good housekeeping, multiple site operators who use different suppliers should ensure they resubmit the relevant forms if they ever change one of those suppliers. Otherwise, they could run the risk of missing out financially.

To coin a phrase, ‘if you take care of the small things, the big things take care of themselves.’

If you would like to speak to one of our business energy consultants about managing your nergy costs better, please get in touch by calling us on 01225-867722.

Climate Change Agreement deadline reminder

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The deadline for applications for the Climate Change Agreement (CCA) is fast approaching and prospective or existing clients are advised to get in touch now.

After a two-month extension was granted by the UK government, companies eligible to apply for the scheme can now do so up until 30 November this year.

However, most trade associations require applications to arrive before the end of October to enable them to be vetted and processed in a timely fashion.

First established in 2001, the CCA incentivises energy and carbon savings through setting energy-efficiency targets whilst also helping to reduce energy costs in sectors with energy-intensive processes by providing a significant discount to Climate Change Levy (CCL)

The current targets provide the basis on which organisations can make improvements to the energy-efficiency of facilities included in agreements over an eight-year period, ensuring their contribution to UK-wide goals, in return for savings worth nearly £300m annually.

We are currently working on applications for existing customers and would welcome approaches from other companies who need guidance in this area or are interested in utilising our expertise in energy procurement, invoice validation and compliance and legislation.

All you need to know about the CCA entry changes

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After a thorough consultation process conducted by The Department for Business, Energy and Industrial Strategy (BEIS) involving 101 key stakeholders, the UK government has decided to extend the new entrant deadline for the Climate Change Agreement (CCA) scheme.

Companies eligible to apply for the scheme can now do so up until 30 November this year after an overwhelming majority of respondents responded in favour of pushing it back by two months from the end of September.

First established in 2001, the CCA incentivises energy and carbon savings through setting energy-efficiency targets whilst also helping to reduce energy costs in sectors with energy-intensive processes by providing a significant discount to Climate Change Levy (CCL)

The current targets provide the basis on which organisations can make improvements to the energy-efficiency of facilities included in agreements over an eight-year period, ensuring their contribution to UK-wide goals, in return for savings worth nearly £300m annually.

As it has been agreed to change the baseline year from 2008 to 2018, companies already in the scheme will need to recalculate their energy consumption data and bring it up to date. We can assist with that process whilst also checking the eligibility of companies who wish to join the scheme for the first time.

CCAs are not intended as a straightforward subsidy for energy-intensive industries and are designed to encourage businesses to unlock additional energy efficiency potential. Our energy auditing process helps to identify areas where those possible savings can be made.

Also, by analysing consumption against throughput units, we are able to accurately monitor a client’s progress towards targets, allowing for more accurate budget forecasting.

If you would like to speak with one of our team about CCAs, please give us a call on 01225-867722.

Mitigating against CCL rises

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Non-energy costs (often referred to as thirty-party costs) have consistently been on the rise in recent times and they now account for around 60 per cent of a company’s overall energy bill, and everything points to this trend continuing in the future.

This month has seen an increase in rates for Climate Change Levy (CCL, affecting electricity, natural gas, LPG and other taxable commodities. 

The CCL rate – an environmental tax on energy delivered to non-domestic users – has been raised to recover the revenue from abolishing the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) at the end of the 2018/19 compliance year.

One way to keep a check on these increases is by ensuring compliance and reducing energy consumption; energy efficiency is now every bit as important as procurement in terms of energy management.

Alternatively, your business may currently be in a Climate Change Agreement (CCA). Businesses who hold a CCA will see their CCL discount increase from 90% up to a 93% reduction in electricity costs and from 65% up to a 78% discount on gas, LPG and any other taxable commodity.

Taxable Commodity April 2018 Rate April 2019 Rate
Electricity (£/kWh) 0.00583 0.00847
Gas (£/kWh) 0.00203 0.00339
LPG (£/kg) 0.01591 0.02175

At Energy Management, we have an experienced team of energy consultants and chartered engineers who are highly-skilled at devising and implementing cost-reduction solutions including the introduction of energy-saving technologies. We are also have years of experience in guiding clients through the CCA process, ensuring all relevant procedures are followed to ensure CCL discount.

Our bespoke energy management portal, EM-Powered, is also an invaluable tool is accurately monitoring and reporting energy consumption so that businesses have a proper understanding of their consumption.

If you need help in managing your CCA, please get in contact on 01225-867722.