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The new energy and carbon reporting framework: will your company be affected?

There are significant changes on the way to how businesses report their energy and carbon emissions.

On 18 July 2018, the government confirmed that the the CRC Energy Efficiency Scheme will close on 31 March 2019 and be replaced by a new reporting framework, Streamlined Energy and Carbon Reporting (SECR) from April 2019.

Around 4,000 companies (and 1,200 other public and private sector organisations) are currently obliged to report their annual carbon emissions under the CRC Energy Efficiency Scheme (the CRC scheme). However, the government estimates that around 11,900 businesses will be required to report annually on their energy and carbon performance under SECR, many for the first time.

The new reporting requirements demonstrate the growing trend for company reports to be the vehicle for public disclosure of information relating to environmental impact. Draft regulations¹ covering the new reporting requirements have been published alongside the regulations dealing with the closure of the CRC scheme. These documents give the details for the transition to the proposed SECR framework from April 2019.

Final decisions a business must take on complying with the new scheme will need to wait until the legislation is completed. However, whether you are an energy manager or company secretary, it is essential that you understand how your company may be affected by the new scheme.

Join our webinar “Navigating the complexities around SECR” on Tuesday 18th September at 15:00-15:45, to hear from our panel of experts, including Gary Shanahan, who heads the Business and Industrial Energy Efficiency, Tax & Reporting team at BEIS and find out how your organisation may be affected. Register here.

SECR – essentials you need to know now
When will the new energy and carbon reporting regulations come into effect?
If approved by Parliament in their current form, the regulations will be effective in financial years beginning on or after 1st April 2019.

Who is affected by the new regulations?
The regulations apply to UK companies (in contrast to ESOS, which applies to undertakings, a broader designation) and limited liability partnerships (LLPs).

Quoted companies
Currently, all quoted companies report on their global greenhouse gas emissions and intensity metric as part of their directors’ reports. They will now have to include their annual energy consumption and any energy efficiency actions made in the reporting year, in addition to their current reporting obligations.

Large unquoted companies
For the first time, large unquoted companies must provide information in their directors’ report on their UK carbon emissions and energy use.

What is a large unquoted company?
This follows the definition in the Companies Act 2006. In summary, a company meeting two of the following conditions in the financial year is a large company:
● Turnover: at least £36m
● Balance sheet total: at least £18m
● Number of employees: at least 250

Many different types of organisation are unquoted companies and will need to assess their qualification. For example, many universities are registered as companies and will be in scope if they reach the qualification threshold.

Corporate groups
UK subsidiaries that qualify for SECR will not be required to report where they are covered by a parent’s group report (although they may report individually on a voluntary basis). Group reports will be covered by the new regulations.

Overseas companies
Companies that are not registered in the UK are not obliged to file annual reports at Companies House, and therefore fall outside the scope of SECR.

Limited liability partnerships
In summary, members of large limited liability partnerships (LLPs) will have to prepare new annual energy and carbon reports after April 2019 (see the section on unquoted companies for qualification criteria). Parent LLPs preparing group accounts must prepare consolidated energy and carbon reports, relating to the undertakings included in the consolidation. In the case of parent LLPs, the qualification criteria are aggregated and are met by the group. Failure to comply with the requirement to prepare an energy and carbon report will be a criminal offence and subject to a fine.

What will be included in the energy and carbon reports?

Quoted companies
In addition to current reporting requirements in their directors’ reports, quoted companies will report their global annual energy consumption and a description of any actions taken to increase energy efficiency.

Unquoted companies
Unquoted companies must include in their annual directors’ reports their emissions in tonnes of carbon dioxide equivalent and their annual energy consumption from UK activities, including fuel consumed for transport.

The report must also include a description of any measures taken to increase energy efficiency during the financial year and an appropriate intensity ratio, which expresses the company’s emissions in relation to a quantifiable factor associated with the company’s activities.

LLPs
Large LLPs will be required to prepare an energy and carbon report for each financial year. The information to be provided is the same as by large unquoted companies.
The LLP’s energy and carbon report must include the names of the members of the LLP and the name of the designated member signing the energy and carbon report.

Exceptions
A company is exempted from the reporting requirements if it consumed 40,000 kWh or less of energy in the UK in the reporting period.A qualifying company or LLP is also exempted if the disclosure is considered by the directors to be seriously prejudicial to the interests of the company.
If obtaining the required energy and carbon information is not practical, the company must state what information is not included and why (a “comply or explain” provision).

Some final words about CRC closure
The CRC Energy Efficiency Scheme (Revocation and Savings) Order 2018 deals with the arrangements for CRC closure and will come into force on 1 October 2018. It revokes the CRC Energy Efficiency Scheme Orders 2010 and 2013, while allowing the scheme to operate until the end of the phase (31 March 2019), with the final allowance surrender date on the last working day of October 2019. The CRC Registry will continue to operate for this purpose and participants will have access to their CRC accounts until 31 March 2022. After this date the Registry will be closed.
To the relief of participants who purchased too many allowances in advance and have a surplus in their compliance accounts, repayment of surplus allowances may be applied for during the period 1 April 2022 and 31 March 2025.

Join our webinar “Navigating the complexities around SECR” on Tuesday 18th September at 15:00-15:45, to hear from our panel of experts, Including Gary Shanahan, who heads the Business and Industrial Energy Efficiency, Tax & Reporting team at BEIS. Register here.

¹The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018

Related Blogs:

UK Government announcement means energy & carbon reporting for many more companies in 2019.

Tackling Scope 3 for Science Based Targets

[Updated] Organisation completing science-based targets (SBTs) often experience challenges throughout the target setting process. Carbon Credentials has helped numerous clients satisfy the requirements set by the Science-Based Target initiative (SBTi) as many find the Scope 3 emissions assessment can often be the most troublesome requirement.

So what are Scope 3 emissions?

The Greenhouse Gas Protocol (GHG Protocol) is the most widely used accounting standard for GHG emissions. In another blog, my colleague Kyna wrote about the use of emission scopes for allocating emissions for investor reporting. The same methodology is also drawn upon by the SBTi to provide the basis for long-term target setting.

This GHG Protocol categorises an organisation’s emissions into three “scopes”.

  • Scope 1 emissions (direct emissions) are defined as emissions from sources that are owned or controlled by the organisation. This might include, for example, natural gas combusted in a boiler at a company’s head office.
  • Scope 2 emissions (indirect emissions) are emissions from purchased electricity, heat, steam or cooling consumed by the company, but generated elsewhere.
  • Scope 3 emissions (other indirect emissions) are emissions that occur as a consequence of the operations of the organisation but are not directly owned or controlled by that organisation. For example, emissions from waste generated by a company are defined as Scope 3 emissions.

The GHG Protocol Scope 3 guidance outlines the 15 different Scope 3 categories and each should be assessed in terms of their materiality in order to understand what an organisation should report on. A summary of the three scopes of emissions and their definitions can be seen in the infographic below.

Figure 1 A breakdown of how different emissions are categorised into Scope 1, 2, or 3.

Scope 3 emissions are especially important for organisations because they often make up the largest portion of the overall footprint. The challenge organisations face in quantifying Scope 3 lies in the degree of control they have over these activities and the collection of data associated with them. Paradoxically, the most significant emission reductions can be made by targeting Scope 3 activities. By calculating Scope 1, 2 and 3 emissions, an organisation can understand its full climate change impact and prioritise efforts to reduce emissions.

What does the Science-Based Targets initiative require for Scope 3?

Previously, the SBTi only recommended that companies submitting targets undertake a Scope 3 screening, but this is now a requirement of the process. This means that organisations must look at all relevant Scope 3 categories and determine their significance.

The SBTi requires that if Scope 3 emissions make up over 40% of total Scope 1, 2, and 3 emissions then the majority of Scope 3 emissions must be included in the target. The “majority” is defined as the top 3 categories or 2/3 of total scope 3 emissions.

In terms of ambition, it is not a requirement that Scope 3 targets are in line with a 2 degrees scenario, but that the targets are challenging and robust. The organisation must demonstrate that their Scope 3 targets are addressing the main sources of GHG emissions within their value chain in line with current best practice.

So how do I begin with setting a target on my Scope 3 emissions?

So far, most organisations have focussed on Scope 1 and 2 emissions and many are not yet even measuring Scope 3. The graph below demonstrates that over twice as many UK CDP respondents are setting Scope 1 & 2 targets versus those companies that are setting Scope 3 targets.

[image] Figure 2 A comparison of the number of UK companies setting Scope 1 and 2 versus Scope 3 targets as reported in CDP 2016.

Figure 2 A comparison of the number of UK companies setting Scope 1 and 2 versus Scope 3 targets as reported in CDP 2016.

It can be difficult to set a target when there is no baseline data to compare against. Subsequently, there is a lot of uncertainty about how to get started on the journey. The process diagram below gives a high-level understanding of the steps to evaluating an organisation’s value chain impacts:

[image] Figure 3 A high-level process diagram demonstrating the steps for understanding Scope 3 emissions.

Figure 3 A high-level process diagram demonstrating the steps for understanding Scope 3 emissions.

The first step in the process is to perform an initial Scope 3 gap analysis. The gap analysis is where organisations can assess current reporting against the 15 Scope 3 emissions categories to determine whether all relevant emission sources are covered. This analysis will allow you to either move on to set your targets or demonstrate that more work must be done in this area.

What should I do next?

If the results of the gap analysis show you haven’t quite analysed everything you need to, firming up the Scope 3 reporting boundary will be of huge benefit and move you along the SBT process. Remember, a central requirement of the SBTi is to demonstrate that you have considered the relevance of emission categories included and can provide a justification for excluding the others.

By evaluating Scope 3 emissions against the GHG Protocol Value Chain criteria, a company can identify which emission sources are truly relevant to their organisation and should, therefore, be included within the target. My colleague Scarlett Benson will describe this process in more detail in the second part of this Scope 3 SBT blog series.

If you would like help understanding your Scope 3 emissions or developing a science-based target, please get in touch with one of our experts here.

Emma Watson, Consultant

[Updated March 2018. Originally posted July 31st 2017]

With 1 year to go, are you ready for CRC’s successor?

[Updated May 2018] Download our CRC Reporting Guide:2018 Edition


It seems hard to believe that in a few weeks we will be in the final year of CRC reporting (starting 1 April 2018). As discussed in my blog of 22 February 2018, we know what the government proposes to replace CRC with a streamlined energy and carbon reporting framework (SECR).

Whatever shape this framework takes, verified energy data and first-rate systems for managing energy consumption will be at the heart of the new reporting framework.

Which companies will be most at risk?

CRC targets both public and private sector organisations consuming over a minimum threshold of electricity. Although higher education and many public-sector organisations report to CRC, the SECR proposals on mandatory reporting do not apply to them. Instead, the government proposes voluntary carbon emissions reporting and energy efficiency measures supported by the loans scheme administered by Salix Finance for the public sector (see our blog of 4 December 2017 for details).

Large quoted companies are already obliged to measure and report their greenhouse gas (GHG) emissions in their directors’ report. Therefore, the government’s proposals for mandatory energy and carbon reporting post CRC are aimed at large unquoted companies.

In the SECR consultation, the government proposed that UK unquoted companies in scope should report on the following in their annual reports:

  • Total UK energy use,
  • Scope 1 and 2 GHG emissions associated with UK use, and
  • An intensity metric.

So, not only will large unquoted companies be reporting on their total energy use, they could also be reporting on their UK Scope 1 and 2 GHG emissions for the first time.

We don’t yet know when the new SECR reporting framework will start. However, whatever carbon and energy reporting scheme is put in place after CRC ends in 2019, participants will be expected to have embedded resilient energy data systems to ensure compliance with this mandatory scheme.

Well managed data & expert compliance advice

We have helped numerous companies improve data management and through our expert compliance advice, we have helped minimise their reporting and compliance risk. But we didn’t just help them manage their compliance data. We made it possible for them to visualise it, turning it into meaningful information that helped them communicate the story tells to internal and external stakeholders and got buy-in from senior management for energy efficiency projects.

Find out how we can help you.

Check out some of our other CRC Blogs:

What will replace the CRC Energy Efficiency Scheme, and when?

Response to the Streamlined Energy & Carbon Reporting (SECR) Consultation (summarised)

 

 

Why is it so difficult to get climate issues onto the board level agenda? Is TCFD a solution?

I recently heard the phrase climate competence gap and it really resonated with me. Jane Stevenson, CDP Engagement Director to the Task Force on Climate-Related Financial Disclosure (TCFD) was speaking at a Carbon Credentials event and invoked the phrase when describing a barrier that many of us will be familiar with. Namely, that climate-related issues are seldom well understood at Board level and are even less likely to be championed by the members of the Board.

Why is it so difficult to get climate issues onto the board level agenda?

What can we do to bridge this disconnect between the senior decision makers in our organisations and the overwhelming evidence that companies need to act now to ensure we stay below a 2-degree warming scenario?

Might the answer be the recent recommendations to come out from the Task Force on Climate-Related Financial Disclosure?

There are 3 key reasons why these recommendations could help you achieve greater traction at Board level.

1. It’s an industry-led initiative.

The recommendations have been steadily increasing in prominence since their launch last June as a result of their credibility and pragmatic nature.

The TCFD is backed by key industry figures, it is chaired by Michael Bloomberg and was instigated by Mark Carney in his role as chair of the Financial Stability Board. This gives the recommendations credibility that is more likely resonate at Board level than previous disclosure initiatives.

2. They have an investor focus.

The purpose of the TCFD recommendations is to improve financial disclosure so that investors can make better-informed decisions on where to deploy their capital. Investors are becoming increasingly aware of the risk that climate change can have of devaluing an organisation or rendering it obsolete. Andrew Parry, Head of Sustainable Investment at Hermes Investment Management, stated at one of our recent events that organisations need to be conscious of not just having stranded assets but stranded business models as well.

Investors will be looking for companies to disclose inline with the TCFD so they can make their investment decisions. Boards that are not managing climate-related risks could find themselves struggling to retain or attract investment.

3. Scenario analysis will change the game

Scenario analysis is a key recommendation that focuses on the resilience of organisational strategy. Companies must consider not just how they impact the climate but how the climate will impact them. This is still a new area for most organisations and is being developed, yet it is clear that we cannot fully understand how a company will respond to different scenarios without exploring the Board’s decision-making capabilities and increasing their competence to the risks that they face.

So what does this tell us? The TCFD recommendations have potential, more than previous initiatives, to resonate with your Board. You have an opportunity to leverage the recommendations to get buy-in at a senior level and drive the change that underpins your company’s disclosure.

For more information on how you can prepare effectively for the recommendations, get in touch with us.

Are you ready for the increase in regulated energy costs?

We asked a group of Sustainability Directors at our recent event on Streamlined Energy & Carbon Reporting how they expect their energy costs to change over the next 5 years:

  •      42% said they expect to see an increase of 4%
  •      58% said they expect to see an increase of more than 6%

Given the regulatory changes ahead, we expect energy costs to actually increase by more than 10%.

The delivered price of energy to your business is made up of the commodity cost and the pass-through regulated costs.  The regulated costs now make up over 60% of the total cost you pay as a business.  While the commodity costs of electricity and gas remain relatively low, with some degree of volatility, the regulated charges will increase by 20-30% in coming 3-5 years  

Most businesses are not ready for this increase. They will need to prepare by taking either or both of these possible approaches:

  • Adding the increase into their budgets for medium-term planning, while finding ways for the rest of the business to absorb the cost or grow sales and margins to counteract it (a 10% increase in costs will require a 5-10x additional value in sales revenue to pay for it).

OR

  • Executing a new energy strategy that drives down energy costs to enable flat year-on-year costs, or better still reducing overall energy costs.

The second approach is the better option for any business, but achieving a reduction in costs is difficult if most of the basic energy efficient changes have already been done, such as installing LED lighting.

The question then becomes, how can you go above and beyond basic energy efficiency measures?

Our work on advanced data analytics and energy performance is driving an average 14% reduction in energy costs.  We are proving that it is possible, in the face of growing energy regulated prices to drive overall energy cost reductions.  The key ingredient is understanding the data.

We found that businesses are often unaware that regulated charges are applied at different times of the day and can vary by region across countries.  It is difficult for businesses to assess building performance at the times when electricity is costing 2x or 3x more than usual.

Through connecting buildings to our ADAPt system (Assured Data Analytics Platform), we are enabling our clients to see how their buildings are performing and helping them to drive actions to save energy and improve the work environment for the people in the building.  It’s a win-win and can reveal a goldmine of new opportunities for cost reduction and improve wellbeing.

If you are interested in learning how this approach can be applied to your business, then please contact us here.

Congratulations to Taylor Wimpey – Winner of CDP’s Most Improved award for 2017

Carbon Credentials is delighted to announce that Taylor Wimpey has been presented with the 2017 CDP award for Most Improved Water response.

This was the first year that Carbon Credentials supported Taylor Wimpey on their CDP responses for both the Climate Change and Water submissions.

Taylor Wimpey improved its score for Water from a B to an A- (Leadership-level) and maintained its B status in the Climate Change response. Congratulations Taylor Wimpey!

How did Taylor Wimpey achieve Leadership?

The process began with a Gap Analysis of Taylor Wimpey’s previous year’s CDP responses. This scored the submissions against the updated scoring methodology and looked for any gaps in the existing response. The exercise identified areas for improvement and provided Taylor Wimpey with a robust plan for the 2017 disclosure cycle.

The next phase focussed on engaging with the wider business. Carbon Credentials conducted board-level interviews to understand the strategic risks and opportunities facing the business and fed this insight into the responses.

Carbon Credentials’ experts collated emissions and water data for inclusion within the submissions and provided insight and context to any changes identified.

Our clients improved and maintained their market-leading scores in 2017.

In 2017 Carbon Credentials supported 1 in 6 companies achieving Leadership in the UK CDP Climate Change and Water programmes. See how some of our clients improved below.

The CDP submission is changing in 2018.

CDP has announced that in 2018 there will be significant changes to the layout and scope of the submission. The main differences will be:

  • The introduction of sector-specific questions.
  • Incorporation of the recommendations of the Task Force on Climate-Related Financial Disclosure. Questions will be grouped into the same four categories as the TCFD, including 1) Governance 2) Strategy 3) Risk management and 4) Metrics & targets.
  • An emphasis on scenario analyses and the future of business operations under climate scenarios.

Carbon Credentials is holding an event on the CDP changes in 2018.

Once the new questionnaire has been released we will be holding an event in January that will run through the changes to it and help you understand what the TCFD recommendations mean for your business. If you would like to attend, please register your interest below.

As an accredited CDP partner, we are perfectly positioned to help you understand your CDP score and use this reporting framework as a tool to drive action and performance improvements across your organisation.

If you would like to know more about our CDP services please get in touch.

 

Kesi Courtman, Senior Analyst

kesi.courtman@carboncredentials.com

 

Register your interest for the 2018 CDP event

What is going to replace the CRC?

[Update May 2018] Check out our latest thoughts on CRC:

Check out new CRC REporting Guide:2018 Edition – Download here

With 1 year to go, are you ready for CRC’s successor?

What will replace the CRC Energy Efficiency Scheme, and when?

What is going to replace the CRC?

[October 2017] Yesterday the Government announced a new open consultation on Streamlined Energy and Carbon Reporting. This blog outlines what this means for you and what you can do about it, including announcing an upcoming event we are holding specifically to cover the topic.

The consultation on streamlined energy and carbon reporting is happening. How can I have my say on CRC’s replacement?

The government has published the consultation paper “Streamlined Energy and Carbon Reporting”. If implemented, the proposals will have a significant impact so the consultation is asking for your views on:

  • Mandatory annual reporting of energy and carbon information
  • Who these requirements should apply to – will your company qualify?
  • Reporting cost-effective energy efficiency opportunities, such as those identified through ESOS audits

Where can I find the full consultation document on energy and carbon reporting after CRC closes?

The full consultation document can be found here.

In 2016, the UK government announced reforms to reduce the burden of carbon and energy reporting on businesses. One of the reforms was the closure of the CRC Energy Efficiency Scheme in March 2019 and the replacement of CRC allowances with an increased Climate Change Levy (CCL).

However, mandatory energy and carbon reporting still has an important role (what gets measured gets managed) and the UK government is holding an open consultation on a simplified energy and carbon reporting framework for companies to be introduced in 2019, to replace CRC reporting.

When is the deadline to respond to the consultation?

The deadline to respond is 4 January 2018, so there is a fast turnaround to respond to the consultation, even though this is a complex area which may have far-reaching implications for your business.

How can I get a clear, insightful briefing on the proposals to take back to my business?

By attending our consultation event on the morning of Tuesday 12 December 2017.

We are holding a workshop where you will be briefed by policy leaders and industry experts. You will also have an opportunity to discuss the proposals with your peers.

How can I register for this workshop?

To register your place, go here, and click on the ‘Register’ button. This will book you on and we will see you on the 12th!

Understanding the 2016 ISO 50001 certification trends

Earlier this week, the International Organisation for Standardisation (ISO) published their 2016 Survey results detailing the total number of ISO 50001 Certificates in the world as of 31st December 2016. The results show that there were just under 19,000 ISO 50001 certificates worldwide, which represents a 60% increase compared to the previous year.

Figure 1: ISO 50001 Certificates By Year

Delving into the survey results the greatest share of the ISO 50001 certificates is held within Europe, which accounts for 90% of the total and seven out of the ‘Top 10’ countries for number of ISO 50001 certificates.

Figure 2: Top 10 countries in 2016 by the nubmer of ISO 50001 certificates

In 2015 the UK saw the total number of certifications increase significantly. While this boost coincided with the compliance deadline for ESOS Phase 1, the Environment Agency released data stating that only 20% of certificates issued in 2015 were in connection with ESOS compliance, meaning that ESOS cannot be credited as the main driver for this growth. This proposition, that ISO 50001 Certification in the UK is being driven by reasons other compliance, is reinforced again in the new statistics, which show a 92% increase from 2015 to 2016 without any coinciding compliance event, such as ESOS phase 1’s deadline.

Figure 3: ISO 50001 certificates in the UK

So why are more UK organisations using ISO 50001 certification?

  • Governance – As a globally recognised standard, ISO 50001 certification demonstrates the strongest commitment to energy performance improvement to both internal and external business stakeholders.
  • Embedding continual improvement – Businesses want a system that will embed continual improvement, ensuring energy saving opportunities are not just identified (as often seen with ESOS energy audits) put acted upon.
  • Best practice compliance – ISO 50001 provides a best practice framework for identifying and complying with all legal and other requirements related to energy use, reducing risk of non-compliance from the corporate through to site specific level.
  • Contractual and bid requirements – ISO 50001 is fast becoming a key component of contractual and franchise requirements and is recognised as a key driver for improving tender and bid applications. Businesses are implementing ISO 50001 either in response to these current requirements or in anticipation of future requirements.

Want to find out more?

Analysis of this survey data in this blog is just the start. Join us on Thursday 16th November for our event Decoding ISO 50001; Understanding the value, addressing the challenge to learn more.

If you would like to find out more about how we could support your ISO 50001 journey, please also contact our performance team here.

 

Oliver Smallman,

Senior Environmental Auditor

CRC electricity emissions factor falls by 15%

[Update May 2018] Download our CRC Reporting Guide:2018 Edition


[Update April 2018] Check out our latest blog on the CRC electricity emissions factor forecast to fall by 15% 


On Tuesday morning the 2017-18 CRC emissions factors were announced to all participants in an update email sent from the Environment Agency. These emission factors are used by CRC participants to convert energy consumed into tonnes of carbon dioxide (CO2). All CRC participants use these figures to then calculate the amount of tax owed to the government depending on the amount of emissions in CO2 they produced in that year.

The new emission factors to be used in Phase II Year 4, along with the percentage change year-on-year, can be seen in the table below:

YEAR CRC 2016-17 CRC 2017-18 % CHANGE
Electricity Onsite generated and self-supplied 0.409570 0.348850 -14.8%
Grid 0.446620 0.381460 -14.6%
Natural gas 0.183645 0.183810 +0.1%

Table 1 Emission factors can be found here: www.gov.uk/government/uploads/system/uploads/attachment_data/file/620226/crc-energy-efficiency-scheme-conversion-factors.pdf

How does this compare to what was expected?

In April, Carbon Credentials estimated the CRC grid electricity emission factor to be used in CRC forecasting by using data published by BEIS on fuel used in electricity generation and supply for Q1-Q3. The estimated figure we predicted is just 2.8% out from the emission factor published by the government.

PREDICTED CRC 2017-18

(Estimated by Carbon Credentials, April 2017)

ACTUAL CRC 2017-18

(Published June 2017)

% DIFFERENCE
0.371 0.381460 2.8%

Table 2 CRC grid electricity emission factor for 2017-18 compared to Carbon Credentials’ predicted emission factor.

Carbon Credentials’ estimated figure is only 2.8% different from the final electricity emission factor published by the government.

How has the UK’s fuel mixed changed?

The most striking change in the 2017-18 figures versus the previous year is the 15% decrease in the electricity emission factors. This exciting news can be attributed to three main factors:

  • Coal’s share of electricity generation decreased from 15.9 per cent to 11.3 per cent from April 2016 to March 2017
  • Renewables’ share of generation increased from 25.6 per cent in Q1 2016 to 26.6 per cent Q1 2017
  • Low carbon electricity (renewables plus nuclear) generation share increased from 44.4 per cent to 45.6 per cent in the year until March 2017

Figure 1 UK electricity generated by fuel type from 01/01/2014 to 31/03/2017 as published by BEIS in June 2017.

From 2015-16 to 2016-17 we saw an 11% decrease in the electricity emission factor, mainly due to the closure of coal power stations, and this year Britain celebrated its first coal-free day on the 21st April[1]. The decrease in coal use is demonstrating a significant positive impact on our emissions intensity. Not only that, renewable energy production continues to break records each year. On Christmas day 2016, over 40% of electricity generated came from clean sources, which was the highest percentage ever[2].

In contrast, the UK government lacks policies that may be needed to continue this positive trend at its current rate. Ernest & Young rated the UK as the fourth most attractive market for renewable investment in 2013, but since then its position has dropped to 10th place in the latest assessment, after major knocks to subsidies[3]. In addition, EY cite the lack of clarity surrounding Britain’s position on renewables after Brexit as a major hindrance to investment[4].

 

Figure 2 UK electricity emissions intensity

Despite policy setbacks at the government level, the graph above shows that our electricity emissions intensity has continued to decrease for the past four years. With these decreases, we hope that the UK continues its work towards hitting its 2050 target to reduce emissions by 80%, keeping emissions at a level sufficient to avoid the most dangerous effects of climate change.

Emma Watson, Consultant

 

[1] The Guardian, British power generation achieves first ever coal-free day, www.theguardian.com/environment/2017/apr/21/britain-set-for-first-coal-free-day-since-the-industrial-revolution

[2] The Guardian, Christmas Day 2016 sets new UK record for renewable energy use, www.theguardian.com/environment/2016/dec/29/christmas-day-2016-renewable-energy-uk-green-electricity

[3] The Telegraph, Energy investors ‘underwhelmed’ by UK renewables market, www.telegraph.co.uk/business/2017/05/15/energy-investors-underwhelmed-uk-renewables-market/

[4] Ernst & Young, Renewable energy country attractiveness index, May 2017