CRC - all change?
Exactly one year after coming into force, the CRC Energy Efficiency Scheme will be amended. These initial amendments form part of the broader simplification review promised by the coalition Government in November 2010. Their principal purpose is to postpone the start of phase two in order to enable a programme of stakeholder dialogue on the broader simplification options to be undertaken. However, the opportunity is also taken to introduce some initial simplifications and to undertake a number of corrections.
The key change is the alteration to phase timing. After the extended introductory phase the scheme will proceed with five phases of six years length, commencing with the start of the second phase on 1st April 2013, and a final seventh phase of five years. From a practical point of view this means that the qualification period for the second phase will now be April 2012 to March 2013, rather than April 2010 to March 2011 as was originally the case, although the scheme will, for the most part, continue to operate on the basis of five year 'trading' periods because of the way in which the phases overlap. The requirement to make an 'information disclosure', for those organisations not using enough half-hourly metered electricity to qualify as full participants, will be revoked and so, straight away, some of the administrative burden of the scheme is being dispensed with for lower electricity users.
An important point to note is that the scheme continues to be referred to as "a trading scheme". This suggests it is likely that the practice of buying allowances in arrears, introduced as part of the comprehensive spending review, will, in due course, be changed back to buying allowances in advance so that trading in allowances between those who over and under perform can take place.
Work on the broader simplification review is already under way. The Government has identified what it considers to be 'priority areas for simplification' such as: the way in which 'organisations' are identified for the purposes of the scheme; the energy supply rules; and, the qualification criteria; and is seeking views on ways in which these can be simplified before consulting on any proposed changes to the governing legislation, which will probably take place later this year.
Whether the simplification will result in a comprehensive overhaul or only a moderate refinement is yet to emerge but further change is coming so watch this space.
Lawyers Helen Garthwaite
