UK Climate Change Levy (CCL)
UK business energy users - What does the Climate Change Levy mean for you?
- A cost will have been added to your energy bills after April 1st 2001
- You will be paying an increased cost for electricity, coal, natural gas or liquid petroleum gas
- Your energy bills will have risen between 8% and 15%
The Climate Change Levy was introduced by the Government, and it is designed to promote energy efficiency and to improve environmental efficiency. A reduction in greenhouse gas emissions is the real goal, meeting the United Kingdom's targets for reducing emissions to air as agreed through the Kyoto Protocol.
We can assist your business to be environmentally friendly and save money on your energy bills.
What the Levy will cost you:
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If your business has high energy consumption but a small work force then the Levy could mean a substantial increase in costs, unless energy improvements are made. If your business is regulated by an Integrated Pollution Prevention Control Order then your industry association could have agreed an overall sector energy reduction target. Having agreed the target (and achieved it) any business in the sector can obtain an 80% discount of the Levy. However, discounts are not retrospective.
If your organisation pays a reduced rate of VAT (for example charities) you will get 100% relief from the CCL.
Enhanced Captial Allowances (ECAs)
To encourage business to reduce carbon emissions to the atmosphere through investment in new energy efficient technologies, the government has introduced the Enhanced Capital Allowance Scheme. This was brought in at the same time as the Climate Change Levy.
The ECA scheme supports combined heat and power, high efficiency boilers, motors, variable speed drives, lighting & controls, refrigeration equipment, thermal screens, and pipe insulation.
Eligible expenditure will qualify for 100% first year allowances, effectively increasing the level of tax relief in real terms. Qualifying products will be identified on a DETR Energy Technology list of equipment manufacturers.
Example of ECA in action. Installation of 35kW fan motor Variable Speed Drive (VSD).
| Annual energy saving from fitting VSD | 138,200 kWh |
| Approximate value | £6,910.00 per annum |
| Indicative captial cost | £15,000.00 (2 year simple payback) |
| For a company paying a 30% rate of Corporation Tax | |
| Tax saving | £2,700.00 |
| Simple payback | 1.56 years |
The FHP Engineering Services Solutions approach is to conduct Energy Efficiency Studies.
The Energy Audit
The first stage is to determine how much energy your business is using as a whole. From the data, gathered during a site survey, an appropriate energy utilisation factor would be determined and compared with published energy benchmarks. We would then submit a comprehensive written report setting down recommended management and engineering solutions, with an implementation plan.
The Implementation Phase
We will specify the work required, obtain competitive tenders from competent contractors if required, and supervise the installation of the new equipment on site. Alternatively, we will supervise the implementation of changes to the management and maintenance of existing energy using equipment.
The Monitoring Phase
Once energy reduction measures are in place we can monitor the energy use over an agreed period of time through comprehensive energy monitoring and targeting procedures. These will ensure that identified savings are being made and the return on investment is achieved.
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For more information, or to discuss the potential savings for your business, please contact our Energy Manager, Malcolm Pittwood at our Birmingham office - 0121 212 2263. Alternatively contact him by email by .