An agreeable situation

Kevin Lambert of Future Energy Solutions looks at ways in which industry can keep ahead of the targets set by Climate Change Levy Agreements (CCAs).

The first milestone results of the Climate Change Levy Agreements have been announced recently. Generally, we can be pleased: Agreements were made with 44 industrial sectors; 10,500 sites achieved target and we cut carbon dioxide emissions by 15.8 million in the 2002 target period. Eighty eight per cent have had their Climate Change Levy discounts renewed.

However, there is no room for complacency: there were 12,000 sites initially covered by CCAs – 164 left the agreements, 317 did not submit data and 219 have not been recertified. In all about 12 per cent failed. Some sectors have missed targets, and may well struggle to achieve the 2004 targets. It would also be fair to comment that some sectors were able to take advantage of favourable baseline data by choosing an early base year – some as far back as 1990 – thereby allowing them to demonstrate significant improvements in earlier years. Targets could be met, but meeting the next targets could be a much tougher job, many sectors may well be challenged – not forgetting those sectors that have already failed to meet 2002 targets.

Most industrial sectors chose to work with targets based on reducing relative energy emissions, (ie primary energy per unit tonne of production). Others, such as the aluminium and metal packaging sectors elected to base targets on relative carbon, that is the tonnes of carbon per unit tonne of production (ie energy used is converted into carbon emissions), or on absolute energy, such as the aerospace industry, or absolute carbon (tonnes of carbon).

The type of agreement has some impact on the type of measures introduced to meet targets. With most working on reducing relative energy emissions, the primary focus is on improving energy management and energy efficiency.

Energy efficiency

Generally, energy efficiency is the most cost-effective way to get results. It is important to remember that most industrial companies can still cut 10-20 per cent off their energy bills, often for very little expenditure. At Future Energy Solutions we have worked to improve energy efficiency across all industrial sectors. Almost without exception our energy audit will identify savings in the range of 10-20 per cent, and often this can be exceeded. For example, a five-year plan at ICI aimed for a 15 per cent reduction in energy consumption. In only two years, the amount of energy used to produce each litre of paint had been slashed by 35 per cent – more than double the target. How far would that go towards meeting your targets – and how much would it improve your profitability? Paybacks are often well under two years and many initiatives involve little investment cost.

One of the most cost-effective options is to work on staff energy awareness. Training can demonstrate significant results, for example a simple campaign including strategically placed posters energy saved Rover £1 million, for a cost of just over £7,000. We find that staff from the shop floor up are very receptive to energy efficiency initiatives and often come up with some of the best energy saving ideas.

Recent times have not helped the case for CHP. However, in the long term CHP is still an effective option for reducing primary energy consumption.

Renewable sources

Increasingly, renewable sources of energy are realistic choices for industry. At the moment we are working with a number of well-known manufacturers, largely in the area of on-site wind power. The technology is proven and available – the Climate Change Levy is just one of the drivers making it viable. Generally, wind power is the best renewable energy option for industrial sites. The energy generation from a single turbine can match the base load of large energy intensive plants of 1.0MW and above. Provided the site itself is suitable, energy intensive industries where power accounts for a significant proportion of production costs are obvious candidates, such as the aluminium and steel, non-ferrous metals, cement, ceramics, glass, paper, and chemical industries.

We have found that there has been a tremendous increase in interest in wind power, especially from companies that have already worked hard to optimise energy efficiency. A feasibility study will indicate whether a wind turbine development is viable for your site.

Finally, The UK has just completed the first year of the Emissions Trading Scheme. Companies with Climate Change Agreements have been able to either buy allowances to meet their targets, or to sell any over-achievement against these targets. One allowance is equivalent to one tonne of carbon dioxide. For those who have missed targets, emissions trading could be a better alternative than losing exemption, while others are able to sell surplus allowances. Figures just published show that nearly 900 companies have traded over seven million tonnes of carbon dioxide-equivalent through the scheme.

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