A PwC climate change manager has warned companies they have just three weeks to register for upcoming government legislation, the Carbon Reduction Commitment (CRC), and not until the end of September, as many businesses believe.
From 30 September approximately all companies which spend about £500,000 on its annual energy bill are required to register under the CRC and pay for energy related carbon emissions.
However, Henry La Fleming, a manger in the sustainability and climate change team at PwC, said business have actually just 18 days to register at the Environment Agency, which is overseeing the scheme.
He warns the Environment Agency need to run checks on senior directors responsible for the scheme in the business prior to registration. This could take between two and four weeks which could push the deadline to 2 September, La Fleming said.
Any business that misses the deadline faces an initial £5,000 fine and a daily charge of £500 until registered up to a maximum of £45,000
Analysis by PwC found poor performing businesses with energy bills of £1m could pay costs of up to £500,000 over five years. However, business with the same sized bill could reduce its energy costs by 8% equating to £85,000 in savings in just one year, and £150,000 over five years.
Electricity is the biggest single operating cost for any colocation data centre or in-house data centre, so every company is keeping a keen eye on the costs of electricity. So why have so few companies failed to register so far?
Perhaps the answer lies in the way the calculation is done to set the 6GWh per annum threshold? The calculation is across the whole of an organisation, including all subsidiaries. An independent colocation data centre has only one or a small number of sites to worry about, each of which creates a large and very visible invoice from the electricity utility company each month. So the data centre industry is very aware of its costs. But, a company which operates, say, a thousand chemist shops and factories across the UK has exactly the same problem, but spread across many thousands of bills, all of which may be aggregated and negotiated centrally, but which may alternatively be negotiated, accounted and paid at local level. Some may be on half-hourly meters, others not. Head Office may not even be aware which bills, when added up, exceed the registration threshold.
So, it clearly isn?t the data centre or colocation industry that is likely to make up the list of companies that should have registered but haven?t ? it?s all the sprawling big corporates without decent financial controls, who are confidently sitting there thinking it has nothing to do with them. When the EA points out to them that it really has, along with a nasty fine, they may discover they need to do something about it quickly.
Posted by: Roger Keenan, managing director, City Lifeline, 18 Aug 2010 | 00:00
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