DECC have recently signalled the proposed changes that will be made to the CRC Energy Efficiency Scheme (the CRC) to make it simpler and reduce administrative burdens that it places on participants. The changes are to be implemented this year.

DECC have announced that the CRC will be modified, not scrapped as some protagonists have called for, and that a new CRC Order is likely to enter into force in June 2013. It is predicted that these alterations will produce substantially reduced administration costs for participants of around £272m up to 2030 - a saving of around 55 per cent for CRC members.

Amongst the changes are the following;

  • From Phase 2 onwards the applicable qualification criteria will be simplified so that it will be assessed only on electricity supplies through Settled Half Hourly Meters (sHHMs).
  • Changes will be made to the treatment of trusts.
  • Technical changes to the definition of supply will be introduced. This will give CRC responsibility to the organisation with direct control for fuel it receives, or supplies made at its direction.
  • The general Landlord and Tenant Rule will be disapplied in respect of ground lease arrangements, with CRC responsibility passing to the tenant where the lease is 30 years or more.
  • Introduction of two fixed price sales in Phase 2 - one “forecast sale” at the start of the year and one “buy to comply sale” after the end of the reporting year. The intention is to encourage participants to forecast their consumption as prices will be lower at the first sale than at the second.
  • From 1 June 2013, the number of fuels participants are required to report will be reduced from 29 to 2 - electricity and gas (the latter only when used for heating purposes).
  • Performance league tables will be abolished from 1 June 2013. Instead, the Environment Agency will publish participants’ aggregated energy use and emissions data.

Guidance to the consultation response proposals is expected to be released by the Environment Agency early this year. Overall, these changes should represent a significant and welcome simplification of the CRC, however be prepared for possible future changes as post 2016 will see further review for the CRC.