SUMMARY of Carbon Reduction Commitments :

• CRC comes into play in April 2010
• Will include Government, public sector, hotels, businesses etc
• Applicable to users of electricity of <6,000MWh/yr
• Fixed rate until April 2013 - auctions thereafter

The new emissions trading scheme (called the Carbon Reduction Commitment or CRC) will cost-effectively deliver carbon emissions reduction and cost savings in the service sector, public sector and other less energy-intensive industries. The Government announced its decision to implement this new scheme in the Energy White Paper published in May 2007. It aims to reduce carbon emissions in large non-energy intensive organisations by 1.2 million tonnes of carbon per year by 2020.

The CRC will be a mandatory emissions trading scheme, targeting emissions currently not included in the EU ETS or Climate Change Agreements, from up to 5,000 large organisations.
This scheme will include, for example, supermarket chains, hotel chains, office-based corporations, government departments and large local authorities. In its current proposed format, the CRC will cover all organisations whose electricity consumption through half hourly meters is greater than 6,000MWh/yr – equivalent to an annual electricity bill of ~£500k. All energy other than transport fuels will be covered, such as electricity, gas, fuel and oil.

During a planned introductory phase, due to start in April 2010, all allowances will be sold at a fixed price. From April 2013, allowances will be allocated through auctions with a diminishing number of credits available over time. Participants will also potentially be able to buy EU ETS allowances to comply with their emissions cap – this would be a buy-only link to effectively create a price ceiling for credits in the CRC.

At the end of each year, company performance, mainly based on absolute carbon reductions since the start of the scheme, will be summarised in league tables outlining the best and worse performers in terms of carbon emissions and reduction. In order to avoid creating an additional financial burden, the auction revenues generated through the initial sale of credits will be recycled back to participants, with companies receiving payments back from government in relation to their first year emissions, plus or minus a bonus or penalty dependent on their position in the league table. The scheme will be designed to be as simple as possible, including self certification of monitoring, reporting and verification of emissions, backed by an independent risk based audit regime. Effectively, this strengthens the incentive to improve energy and carbon management skills, particularly in relation to metering, reporting and reduction. It will also help to focus senior management attention on the issues.

The scheme may help to strengthen many companies’ Corporate Social Responsibility (CSR) driver to reduce carbon emissions and improve transparency of company performance. It will also put pressure on energy providers to assist with improved metering of energy consumption.

Opportunity for low carbon communities to shape future policies

The Government has today launched a search for local authorities, charities and social enterprises to take up the challenge to help communities fight climate change.

Communities can apply for a share of a £10million fund as part of the Low Carbon Communities Challenge to build on existing low carbon schemes.

Around a quarter of the UK’s greenhouse gas emissions come from heating, lighting and powering electrical appliances in homes. By 2050 this needs to be almost zero if the UK is to cut its emissions by 80% highlighting the importance of local action.

This challenge offers the chance to be in the forefront of moving to a low carbon economy. The twenty successful communities will each receive support to pay for real measures selected by the local residents themselves. These could range from a local biomass plant to retrofitting homes to electric car charge points.

In return for technical and financial assistance, people living and working in the area will work alongside government and contribute to finding low carbon solutions from which the whole country will benefit. Successful outcomes from the project will pave the way for a national roll-out of proven measures.

The Low Carbon Communities Challenge will help communities curb their carbon emissions and encourage economic investment that delivers greater energy efficiency.

A specialist support squad made up of partners with funding and expertise from inside and outside government - including The Energy Saving Trust, The Carbon Trust, WRAP and the third sector - will work together with each community to offer help on anything from negotiating in planning debates to identifying personalised low carbon answers.

Energy and Climate Change Secretary, Ed Miliband, said;

“We’re searching for communities across the country to kick start the low carbon revolution. The Challenge is an opportunity for communities to lead the way so that everyone can play their part in tacking climate change and save money on fuel bills.

“The UK has the most ambitious emissions reduction commitments in the world and projects like this will develop the policies we need to be successful.

“With just over two months to go until the crucial climate talks at Copenhagen, the UK is well placed to show it is taking action in all areas to combat climate change.”

The twenty communities will act as national blueprints that will be used to inform government policy development and delivery. The direct involvement of these real life working case studies mean lessons can be learned on the ground to ensure future policies achieve the carbon emission cuts we need.

In addition to ongoing evaluation UK research institutions are being invited to participate, to ensure independent analysis of the various communities’ progress. Using its new £6m investment on energy and communities, The Research Council will be inviting academic proposals to come forward which would build on and contribute to the Governments investment.
The Challenge was announced this summer as part of the government’s Low Carbon Transition Plan.

For towns to be eligible they must demonstrate they are already making changes and are committed to developing both infrastructure and behaviour change that results in carbon reduction such as wind farms, electric car infrastructure or home energy refurbishments.
In testing the success of different plans the flagship Low Carbon Communities will provide invaluable research and information on how communities can successfully work together to cut emissions and fight climate change.

LC Energy Ltd welcomes the Low Carbon Transition Plan released by the DECC in July which sets out how the UK will meet the 34 percent cut in emissions on 1990 levels by 2020;

It says “Transforming the country into a cleaner, greener and more prosperous place to live is at the heart of our economic plans for ‘building Britain’s future’ and ensuring the UK is ready to take advantage of the opportunities ahead”

The targets by 2020:

• More than 1.2 million people will be in green jobs.
• 7 million homes will have benefited from whole house makeovers, and more than 1.5 million households will be supported to produce their own clean energy.
• Around 40 percent of electricity will be from low-carbon sources, from renewables, nuclear and clean coal.
• We will be importing half the amount of gas that we otherwise would.
• The average new car will emit 40 percent less carbon than now.

“The Transition Plan is the most systematic response to climate change of any major developed economy, and sets the standard for others in the run up to crucial global climate talks in Copenhagen in December.”

Please follow this link to read the plan:

http://www.decc.gov.uk/Media/viewfile.ashx?FilePath=White%20Papers\UK%20Low%20Carbon%20Transition%20Plan%20WP09\1_20090724153238_e_@@_lowcarbontransitionplan.pdf&filetype=4

The news that a £500m Renewable Energy Plant, located at Teesport in north east England, has received consent from the British Government under Section 36 of the Electricity Act is welcomed by LC Energy Ltd.

At 295MW capacity, the plant will generate enough electricity to meet the needs of approximately 600,000 homes and will be one of the largest-ever biomass plants to be built in the world, and one of the largest of all renewable energy projects.  The Tees Renewable Energy Plant will enter commercial operation in late 2012.

The Tees Renewable Energy Plant will help to meet the Government’s environmental and renewable energy targets and add to the country’s growing need to diversify its power generation.  It will create 600 jobs during the three year construction period, 150 permanent jobs during the station’s lifetime, and once operating will contribute about £30m per annum into the North East’s economy, supporting a further 300-400 jobs indirectly.  It will save 1.2million tonnes of CO2 per year and will account for 5.5% of the UK’s renewable electricity target.

The biomass feedstock for the Tees Renewable Energy Plant will be sourced from certified sustainable forestry projects developed by the MGT team and partners in North and South America and the Baltic States.  These projects will provide clean burning woodchips, which deliver 95% greenhouse gas savings in comparison to coal or natural gas through the life cycle, and will not use high quality land suitable for food crops.

The plant will use around 2.4m tonnes of woodchips per annum and will operate at baseload – 24 hours a day, all year round. This means the Tees Renewable Energy Plant will produce the same amount of renewable electricity over a year as a 1,000MW wind farm.

LC Energy Ltd welcomes the DECC Five Point Plan for action on UK climate action

PRESS RELEASE

BAA STANSTED APPOINTS LC ENERGY FOR WOOD CHIP SUPPLY

LC Energy, one of the UK’s leading suppliers of low carbon energy services and wood fuel, has won a five year contract to supply BAA’s Stansted Airport with 3,000 tonnes of sustainable wood chip a year for its newly installed wood fuel heating boiler which has formed a key part of a £50 million extension to the existing terminal building.

BAA Stansted is one of the first airports in the world to have its primary heat source provided by wood fuel and the new extension is carbon neutral¹.

The wood chip being supplied could save approximately 1,750 tonnes² of carbon per year (when compared to burning fossil fuels) which is the equivalent output of over 400 family homes.

The wood for the boiler will be sourced from sustainably managed woodlands in the region, mainly situated within a 20 mile radius of the airport terminal. Once it has been harvested the wood is chipped and stored at LC Energy’s hub situated less than two miles from the airport, which significantly reduces the environmental impact of transportingthe chip long distances to the boiler.

Dr. Andy Jefferson, BAA’s Stansted Head of Environment, said: “LC Energy has clearly demonstrated an in-depth knowledge of the expanding low carbon energy sector and has put forward a highly cost effective package to enable BAA Stansted to utilise this natural heat resource from the East of England.”

He continued, “The wood chip fuelled boiler was originally installed to provide heat for the new extension to the terminal, but has proved so effective that the entire airport terminal is now being heated by the boiler. As a result, we have been able to significantly reduce our reliance on the old natural gas boilers.”

Mark Lebus, Managing Director of LC Energy said, “This is a highly significant contract for LC Energy as it demonstrates that woodchip fuel boilers are a genuinely viable alternative energy source for organisations wishing to not only reduce their carbon footprint, but also lessen their reliance on ever-decreasing fossil fuels.”

He continued, “It is essential that the wood fuel is sourced from the immediate area as it capitalises on local wood to provide local heat, and enables a significant reduction in transport emissions.”

According to the Forestry Commission it is estimated that if harvested responsibly, there could be a sustainable supply of wood chip from woodlands in the immediate vicinity of the airport sufficient to supply the Stansted boiler.

Dr Mike Render, Regional Development Advisor for the Forestry Commission, welcomes the decision by BAA to utilise wood to provide heat for the airport and said “The Forestry Commission would wish to encourage a greater use of wood for fuel heat production and in the East of England Region we have a target to supply a sustainable additional 110,000 tonnes per year by 2013.

Now in its third year of trading, LC Energy supplies wood fuel to a number of schools, care homes, housing developments and private customers in the South and East of England including a recent supply contract with Flitch Green primary school in Essex.

For further information please contact enquiries@lcenergy.co.uk

¹ Biomass takes carbon out of the atmosphere while it is growing, and returns it as it is burned.  If it is managed on a sustainable basis, biomass is harvested as part of a constantly replenished crop. This is either during woodland or arboricultural management or coppicing or as part of a continuous programme of replanting with the new growth taking up CO2 from the atmosphere at the same time as it is released by combustion of the previous harvest. This maintains a closed carbon cycle with no net increase in atmospheric CO2 levels.

² The figure of 1,750 tonnes of CO2 being saved is based on the Stansted’s current Mega Watt Hour (MWh) heat usage. Stansted currently uses 9,500 MWh per year. Natural gas has a CO2 emission of 185kg per MWh.

Hence 185 x 9,500 = 1,757,500kg or 1,750 tonnes per year. Therefore by using a heat fuel which is carbon neutral,

Stansted is saving 1,750 tonnes of CO2 per year.