Has AMR made you CRC Red?

AMR is now a topic that has reached even the furthest corners of the UK plc. The main driver of recent months has been the Carbon Reduction Commitment Energy Efficiency Scheme (CRCees as it is now to be known), but have you unwittingly found yourself affected by the CRCees?
    
Many companies have been investing in AMR and smart meters as a result of the benefits that it can bring to organisations seeking to control their energy consumption or the reduction in estimated energy bills (but not eliminated!) etc. These companies, if not originally qualifying for the CRCees, may have found themselves qualifying for the CRCees scheme after all.
    
The CRC Energy Efficiency Scheme’s impact on your business (should it qualify) will in 2011 entirely depend upon what are called the Early Action Metrics, whereby a league table is drawn up and your companies relative performance to others is gauged by these metrics. In the first year, a successful installation of AMR across 90 per cent of your portfolio should see you avoid the associated financial penalties as AMR accounts for 50 per cent of these metrics in the first year. The other metric is to achieve the Carbon Trust Standard or other similar scheme.
    
Originally the qualification for CRCees was based upon your electricity consumption from “00” profile half hourly meters only. If you consumed more than 6 GWh per annum from half hourly metered supplies, then you qualified (unless you were already part of the EUETS). AMR consumption was not included within the qualifying consumption from mandated “00” profile half hourly meter until February this year when the entry criteria was clarified as follows:

Qualification
Qualification for the scheme is based on half-hourly metered electricity usage. Your organisation will qualify if during the 2008 calendar year it:

1. had at least one half-hourly electricity meter (HHM) settled on the half-hourly market across the whole organisation

2. had a total half-hourly electricity consumption over 6,000 megawatt-hours (MWh) once electricity used for transport and domestic accommodation has been excluded

Your electricity supplier will be able to confirm if you have any half-hourly meters settled on the half-hourly market. In the scheme, half-hourly meters include any:

• mandatory half-hourly meters
• voluntary half-hourly meters
• half-hourly light meters
• pseudo half-hourly meters (commonly used to measure electricity consumption of street furniture – e.g. street lights, traffic lights, etc)
• Remotely read Automatic Meter Reading (AMR) meters that produce half-hourly data. These are not necessarily settled on the half-hourly market and therefore do not count towards the first qualification criterion

All organisations that meet the first criterion but consume less than 6,000MWh of half-hourly electricity will not qualify. They will however still need to submit information to the administrator at the beginning of the scheme.
    
So, even if you have just one “00” profile half hourly meter, and consume a total of 6 GWh across all your AMR meters and your “00” profile HH meters, then you’re in!
    
This is a problem for these companies primarily because:

a) They have not made an allowance of an additional 10 per cent of their energy budget for this year to prepare for the cash flow of CRCees

b) Lack of information about the scheme means that they will struggle to meet the reporting criteria

c) Failure to recognise that they are to be part of the scheme means that they may be fined.

However, just a couple of months ago the Environment Agency had a climb down on the requirement to buy two years carbon allowances in July 2011, essentially halving the cash flow impact of the CRC energy efficiency scheme on qualifying businesses, at the same time doubling the benefit in the second and third years of the scheme of installing AMR.
    
In the second and third year of the CRCees the impact of AMR has doubled now delivering 20 per cent in the second year and 10 per cent in the third year. This now gives higher emphasis to Early Action changes and reducing more slowly to better recognise your investment in AMR. Of course your company’s ability to reduce its consumption weighs heaviest after the first year, with the difficulties of doing this from estimated invoices; AMR is the best way to prove exactly what you have used. It is also worth noting that if your consumption submission for CRCees is based upon estimated readings then they will be increased by 10 per cent, offering further incentive for the installation of AMR.
    
Getting AMR right
Jonathan Akers, head of Technical Energy Services BIU, says:” The incentives for getting AMR right are being created by both the government and suppliers. The penalties from the board room for getting it wrong are also due to changing legislation and lack of transparency. It is important that your AMR solution is independently verified, financial and consumption benefits clearly detailed, and that the same company will support you in a year or two’s time when you are asked to prove the results.”

For more information
Tel: 01253 789 816
Fax: 01253 714 131
E-mail: info@biu.com
Web: www.biu.com