News Archive - decarbonisation

An energy framework designed to tackle the climate change emergency

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The climate change emergency was at the front and centre of the news agenda before Covid-19, and even while we are still in the grip of the pandemic, it is an issue that has rightfully refused to go away.

We have found that in our discussions with clients and potential new customers that the drive towards a carbon-neutral position – by 2050, or even 2030 in some cases – is still a key focus.

Figures released by BloombergNEF showed how purchasing green energy contracts rose by 40% on the previous year in 2019, reaching almost 20 gigawatts (GW), and that appetite for change is still there if our experience is anything to go by.

Our Choice Energy Framework is proving to be a popular option for those public sector organisations looking to not only save money in their energy procurement but also be more ethical in the way they power their facilities.

There has been tremendous interest in securing green energy contracts – ones that use wind and solar energy, for example – as opposed to traditional brown energy that relies on fossil fuel power generation.

The Choice Energy Framework involves up to six energy suppliers who have been shortlisted on the basis of tariff competitiveness, billing accuracy, max/min volume threshold restrictions and terms and conditions.

Fixed and flexible contracts will be offered by the suppliers with the length of the contract varying from 12 months to as long as four years.

If you would like to find out more, please contact one of our team on 01225-867722

Are you SECR compliant?

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As of today (April 1), the first Streamlined Energy and Carbon Reporting (SECR) reports are due.

SECR was brought in last year to encourage groups of businesses that fulfil the specified criteria to become more energy efficient and reduce their carbon footprint.

It replaced the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) with the aim of widening the net and bringing the benefits of carbon zero to more businesses.

The new regulations will require an estimated 11,900 companies incorporated in the UK to disclose their energy and carbon emissions – a far greater number than were required to act under the CRC.

Qualifying companies will need to include information on their UK energy use in line with the SECR framework in their Directors’ Report, or an equivalent Energy and Carbon Report for LLPs, for financial years beginning on or after 1 April 2019.

Where energy use and carbon emissions are considered to be of strategic importance to the organisation, the disclosure may be made in the Strategic Report instead, with a statement in the director’s report to indicate and explain this decision.

Who needs to comply?

Three groups of businesses are affected by the new regulations. Companies that fall within the following definitions must comply unless they meet certain exemption criteria:

  1. Quoted companies of any size that are already obliged to report under mandatory greenhouse gas reporting regulations.
  2. Unquoted companies incorporated in the UK that meet the definition of ‘large’ under the Companies Act 2006 will have new reporting obligations. This applies to registered and unregistered companies. Note that the criteria for ‘large’ differs from the ESOS Regulations.
  3. ‘Large’ Limited Liability Partnerships (LLPs) will be required to prepare and file a ‘Energy and Carbon Report’.

Unquoted companies or LLPs are defined as ‘large’ if they meet at least two of the following three criteria in a reporting year:

  • a turnover of £36 million or more
  • a balance sheet of £18 million or more or
  • 250 employees or more.

Certain companies that would otherwise be eligible may be exempt if their energy use is low – 40MWh or less over the reporting period.

Whilst not a requirement, external verification or assurance is recommended as best practice to ensure the accuracy, completeness and consistency of data for both internal and external stakeholders.

Energy Management has a proven track record in ensuring companies are compliant with all the latest relevant industry legislation so if you want to find out more about your SECR requirements, you can contact us on 01225-867722 or email sales@energymanagementltd.com.

What does the election result mean for the UK’s energy industry?

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Green issues were discussed in the election like never before, amidst a climate of fear around the future of the planet.

The main parties all stated they want to reduce the UK’s greenhouse gas emissions to net-zero by at least 2050, if not before. While progress on this front has been positive, the UK is still nowhere near meeting its target and the Committee on Climate Change has said radical changes need to happen in the next few years.

Planning for the future

It is hoped that by 2025 that the UK will have a plan in place to replace gas as a source of domestic heating with all cars and vans on the road being electric by the early 2030s.

The withdrawal bill, paving the way for Brexit on the 31st January 2020, is due to have its second commons reading this Friday. In February, a huge reshuffle will occur once the UK has left the EU with an expected budget statement in March.

Once Brexit has taken place, the UK will be released from any renewable energy targets set by the EU. The availability of funding from EU institutions may impact the deployment of innovation or capital-intensive projects.

EU funding

There are several EU initiatives that promote investment of energy infrastructure and they currently represent an important source of funding for UK energy projects. Therefore, Brexit could leave the UK short of funding or having to look for other means to support renewable infrastructure projects.

Although the UK would still be bound by national and international decarbonisation obligations, it is expected low carbon energy development will carry on forming part of the government’s climate change policy.

In terms of pricing, UK energy prices would be affected if the EU imposes export tariffs on gas flowing to the UK.