Make sure your organisation is ready
The hospitality sector is responsible for over 3.5 million tonnes of carbon emissions per year. It is estimated that energy savings of up to 20%, equivalent to more than £200 million in energy bills, are possible across the sector.
Hospitality, particularly hotels, is one of the top ten industry sectors that will be affected by the CRC Energy Efficiency Scheme when it starts in April. Leading industry players impacted include Marriott UK, Best Western, and Travelodge Ltd.
The CRC Scheme is expected to reduce CO2 emissions from around 5,000 participating public and private sector organisations by up to 11.6 million tonnes per year by 2020 – the equivalent to taking roughly four million cars off the road – so this is an important addition to the UK’s policy response to tackling climate change.
The scheme is also expected to save organisations money through reduced energy bills – benefiting the economy by more than £1billion by 2020. Therefore it should be seen as a valuable business opportunity.
Hotels and restaurants are responsible for 7% of the emissions covered by CRC. Large hotels and restaurant chains, along with some caterers and exhibition centres, will need to further improve energy efficiency to benefit from their participation in the CRC.
The Environment Agency is working with organisations to help them understand their obligations and will provide as much guidance and information as possible. However, failure to comply with appropriate deadlines or providing inaccurate information could result in civil sanctions and fines.
Compliance with the CRC Energy Efficiency Scheme will require financial, audit and carbon management arrangements to be made by Participant organisations. By planning and preparing for these now, CRC Participants will be in the best position to cut their energy bills, reducing upfront CRC payments, increase their ‘revenue recycling’ payout from the scheme, and polish up their reputation along the way.
Who qualifies for the scheme?
Any organisation that had at least one half hourly electricity meter during calendar year 2008 qualifies for CRC. If your organisation consumed at least 6,000 Mega-Watt-hours of electricity through all of its meters during 2008 (equivalent to an electricity bill of around £500,000), you will need to register for CRC as a Participant. You will then need to monitor energy consumption and then, from 2011, buy allowances to cover the tonnes of CO2 your emit.
However, if your organisation consumed less than this amount of electricity, you will register for CRC as an Information Declarer and make a simple disclosure of your electricity use from these meters. You will not have to buy allowances in this case.
There are serious penalties for eligible organisations that do not register with CRC by the end of the registration period. A fixed fine of £5,000 will apply. Additionally, a £500 per day (for a maximum of 80 working days, together with a publication on non-compliance) will apply until they register occurs. It is therefore essential that qualifying organisations register before 30 September 2010.
On the positive side Participants successful in reducing energy consumption will not only save money on energy bills, they will also receive financial and reputational incentives. These savings should be well in excess of the costs of participating in the scheme.
Reducing energy use
There are many steps that business in the hospitality sector can take to cut energy use. Simple actions such as turning off lights and unnecessary equipment are important, but there are also more significant changes that can be made to cut energy use on a larger scale.
It’s important to look at where most of your organisation’s energy is used. For example, heating and hot water can account for up to 60 per cent of your organisation’s total energy costs. It’s vital to replace inefficient boilers to the standard set by the latest Building Regulations. You can also install boiler sequencing controls to ensure only the minimum will be fired up at the same time.
Refrigeration and air conditioning can also use a significant amount of energy. Replacing old equipment and controlling temperature are great places to start, but there is technology available to make equipment even more energy efficient. For example, variable speed drives vary the output of air conditioning systems to meet needs throughout the day, and free cooling coils use the outside air as a source of cooling when possible.
You can also explore energy efficiency technologies such as voltage optimisation, which prevents the excess use of energy. Building Management Systems are also effective – they are computer-based systems that monitor energy performance to help organisations target where they need to save energy the most.
Organisations have the choice between viewing CRC as a benefit or a cost. CRC can be a cost on poor energy management or a financial incentive for low carbon leadership. The Environment Agency hopes organisations will embrace their role in helping to fight climate change, and adopt the latter course.
Case study: Hilton Hotels
As part of the Carbon Trust’s Carbon Management programme, Hilton has implemented a number of energy efficiency measures across its hotels. These include upgrading lighting systems, introducing voltage optimisation technology, carrying out regular audits on thermal insulation systems and optimisation of their Building Management Systems.
The Hilton Birmingham Metropole is taking this further. The hotel is encouraging its employees to get involved in the group’s carbon management programme by setting up a green committee to manage energy efficiency campaigns such as the “Office switch off” and “Green Chef” which encourages staff to think about environmentally friendly ways of cooking.
Hilton has encouraged employees to get involved in cutting energy use by identifying energy champions in each of its hotels and offering employees green incentives. This year all hotels are participating in an energy league table with mountain bikes being awarded to the winning hotel. By looking at where changes can be made both on a large and small scale, Hilton has made a genuine commitment to cutting its energy use.
For more information about the CRC Energy Efficiency Scheme and to download the CRC Registration Guidance visit www.environment-agency.gov.uk/crc. For assistance or queries about the scheme contact the CRC dedicated helpdesk at crchelp@environment-agency.gov.uk.