Will the Climate Change Levy deliver on improved energy efficiency?

The government’s Climate Change Levy is a valid method of motivating business to improve energy efficiency, particularly in comparison with emissions trading, according to a survey by London Electricity. But just how influential it has been in actually implementing new energy management initiatives is yet to be seen.

In a snapshot survey ahead of the government’s forthcoming review of the levy this autumn, the London Electricity opinions were gauged from 57 respondents out of 224 registered delegates at the recent utility event, UTEL 2002. Despite over 70% reporting increased companies’ costs, only 23% disagreed with the policy on grounds that the CCL was not encouraging energy efficiency improvements. The rise in National Insurance contributions after the latest budget is reported to have counteracted any benefits of the original rebated NI contributions designed to ensure the levy was revenue-neutral.

Emissions trading came in for particular criticism, with less than 30% believing that it will encourage energy conservation. Respondents also expressed the need for more information on the process to help their company benefit from trading schemes. Very few believed their company’s management had a decent grasp of the trading concept and the potential of additional revenue from reductions in basic overheads.

In relation to the Renewables obligation, nearly 60% thought the obligation should be higher, but fewer than 30% expressed any interest in installing their own renewable generation to contribute towards meeting the existing targets. Some 80% require more guidance on the broad topic of renewable energy.

The recent Energy Review (see related story) has direct implications for UK companies according to 90% of the respondents, of which 60% supported keeping a nuclear option within the UK’s future generation mix.

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