Hampshire County Council

Cabinet Item 6

31 March 2008

New Climate Change Legislation - A Policy and Strategy Report Re:

Carbon Reduction Commitment (CRC) In Respect of the County Council's Built Estate and Street Lighting Arrangements

Report of the Chief Executive

1.0

Summary

1.1

The purpose of this report is to advise the Cabinet about the proposed introduction of new climate change legislation that will require the County Council to trade for carbon dioxide (CO₂) emission allowances, from 2010, in respect of its property portfolio and street lighting obligations. The detailed sections of this report provides:

· A synopsis of the proposed new carbon trading legislation;

· An energy and CO₂ profile of the built estate and street lighting;

· Proposals for CO₂ reduction targets for discussion with the Cabinet

· Proposed work streams required to reduce primary energy consumption and CO₂ emissions and increase the Council's share of renewable energy - Aalborg Commitment 3.1.

1.2

Reference is also made in this report to the new European Buildings Energy Performance Directive that will impact on the property portfolio and a new National Indicator set for CO₂ reductions from Local Authority operations.

1.3

During the summer of 2007, the Government (DEFRA) published a consultation paper in which it declared its intention to implement a mandatory carbon "cap and trade" scheme in the UK - the Carbon Reduction Commitment (CRC) - in order to secure reductions in CO₂ emissions from large commercial and public sector organisations, such as the County Council. Final details of the scheme have yet to be confirmed, but in its draft form the scheme will have year on year impacts in relation to the County Council's built estate and street lighting obligations. Although the main thrust of the scheme is not intended to commence until January 2010, some preparatory work is required during 2008 in order to provide baseline data in respect of CO₂ emissions that will be used in the initial stage of carbon trading.

1.4

No allowance will be made in the CRC for the purchase of `green' electricity from the national grid, although credit is given for the generation of on-site renewable energy. This means, for carbon trading purposes, the combined annual CO₂ emissions from the County Council's property portfolio and street lighting obligations is approaching 100,000 tonnes, including emissions from schools.

1.5

Carbon trading will require the County Council to compete against other large private and public sector organisations for CO₂ emissions allowances. For the first three years of the CRC scheme, available CO₂ allowances will equal actual emissions levels. Thereafter the Government intend to cap emissions levels in order to encourage the adoption of measures to reduce carbon emissions. Compared to current emissions levels, the Government is aiming to achieve an overall reduction in CO₂ emissions from CRC organisations of at least 8.5%. This figure rises to 15% when a predicted rise in CO₂ emissions from such organisation is taken into account. In relative terms, this would loosely translate into target reductions in CO₂ emissions for the County Council of 6,500 tonnes per annum by 2020 in respect of the corporate property portfolio and street lighting. This figure would more than double to 15,000 tonnes if schools are mandated into the CRC.

1.6

Part of the carbon trading mechanism will include a league table of constituent organisations, which will introduce reputational drivers for such organisations to reduce CO₂ emissions, as well as influencing the recycling of the income generated from the sale of allowances. The determinant for an organisation's position in the league table will be their percentage carbon reduction relative to annual average emissions since the start of the scheme. It is being suggested by the Government that taking early action e.g. the roll out of automatic metering before the start of the scheme could also help the position of an organisation in the league table and be reflected in the recycling of revenues.

1.7

In addition to carbon trading, new National Performance Indicators (NPIs) for Local Authorities are being proposed that will begin to call for CO₂ emissions to be measured in respect of Local Authority operations.

1.8

The County Council will need to develop a CRC compliance strategy. One way of doing this would be for the Council to simply opt for a strategy to buy sufficient allowances to match its annual CO₂ emissions. However, such an approach would carry significant risks including:

· Insufficient allowances in the CRC system to meet the County Council's needs and potentially higher costs of purchasing additional allowances on the secondary market - no recycling credit available for purchases made on the secondary market.

· Poor position in the CRC league table.

· Loss of reputation locally and nationally in relation to the new `National Performance Indicators'.

· If the Government's assumptions about the impact of compliance are realistic, the County council would also miss the potential improved value for money from lower energy costs.

1.9

Because of the above reputational risks this report is recommending a compliance strategy based on achieving reductions in carbon dioxide emissions from the Council's property portfolio and street lighting obligations. The question is what level of carbon reductions should the Cabinet be targeting?

1.10

The CO₂ reduction target that is required by the CRC is estimated to be 6,800 tonnes and up to 15,000 tonnes per annum by 2020, depending on whether or not schools are mandated into the CRC. In other words, this would mean setting the equivalent of a year on year annual CO₂ emissions reduction target for the County Council of between 0.55% and 1.1% for each of the next 13 years. This upper target may not seem a lot to achieve but in practical terms it is the equivalent of making up to 33 secondary schools carbon zero within the next 13 years.

1.11

Achieving any of the above targets will present significant challenges and the corporate work streams in Appendix 6 give an initial indication of what this might mean in practice.

2.0

Recommendations

2.1

It is recommended that the Cabinet give approval:

1. For preparatory work to be undertaken in 2008 to establish base line data to be used for carbon trading purposes.

2. To establish a CO₂ emissions reduction target of 6,800 tonnes per year by 2020 ( annual year on year reduction of 0.55%) from the County Council's corporate property portfolio and street lighting operations.

3. To defer making a decision on setting a CO2 emission reduction target in respect of schools, pending clarification on whether schools are to be mandated into the Carbon Reduction Commitment (CRC) scheme.

4. To appoint the Carbon Trust and its subsidiary companies to work in partnership with the County Council in respect of developing its CRC compliance strategy.

5. To develop the three corporate work streams outlined in the main report as a means of meeting the CO2 emissions reduction target outlined in recommendation 2 above.

6. To develop the three corporate work streams, in consultation with the Corporate Management Team (CMT) and Buildings Land and Procurement Panel. Recommendations for future investment strategies and projects/programmes of work in support of reducing the County Council's CO₂ emissions from the property portfolio and street lighting operations, will be made to the Executive Member for Policy and Resources.

3.0

Background Information

3.1

Taking action on climate change has to be viewed as an investment for the future. According to the Stern report, "actions we take now on dealing with future climate change have long lead times and what we do now can only have a limited impact on climate change over the next 40 to 50 years. On the other hand what we do in the next 10 to 20 years can have a profound effect on climate change in the second half of this century and in the next"ⁱ. Following the Stern report, the Government is pushing ahead with new climate change legislation for the UK, such that it will now begin to influence public and private sector organisations to make investment decisions in support of its climate change programme.

3.2

Through its Energy White Paper and draft Climate Change Bill, the Government has declared its goal to put the UK on a path to cut CO₂ emissions by at least 60% by 2050 with real progress by 2020. This is an ambitious target and this new Bill is laying the path for the Government to introduce legally binding CO₂ reduction targets. Energy intensive industries already have to trade for CO₂ emissions through the European Emissions Training Scheme. The Government is now proposing that large non-intensive energy users, such as the County Council, will also have to compete for CO₂ emissions through a new carbon "cap and trade" scheme which is the reason for sharing this report with the Cabinet.

3.3

Although this report is principally about the proposed scheme for carbon trading, it is worth mentioning that other climate change legislation is also being introduced that will impact on the County Council's operations, including:

· the "Energy Performance of Buildings Directive" that, from October this year, will require the production of energy performance reports and energy performance certificates to be displayed in respect of certain public buildings. The financial impact of which is covered in more detail in section 5 of this report.

· Article 5 of Directive 2006/32/EC in the UK " seeking the promotion of end-use energy efficiency and energy services", which the Government feel that local authorities are in a unique position to implement. Essentially, the Government require local authorities to take on an exemplary lead role in the demonstration of cost effective energy efficient measures in their own organisations and to show leadership in their communities by influencing consumers and businesses to do the same. A further report on this matter should be prepared when more information is known.

· New National Indicators 185 - reducing CO₂ from local authorities own operations and 186 - reducing CO₂ from the community are also being proposed. Note: NI 185 will cover more than just carbon emissions from just buildings and street lighting and include transport and the Council's contractor operations. Again a further report on this matter should be prepared in the future when more information is known.

4.0

A Synopsis Of The Carbon Reduction Commitment (CRC) - A New UK Mandatory `Cap And Trade' Carbon Emissions Scheme.

4.1

Overview Of The Scheme: The CRC will target business and public sector organisations that have an annual electricity consumption from mandatory half hourly metersⁱⁱ in excess of 6,000 megawatt-hours (MWh). Such organisations are termed large non-intensive energy users. The County Council's electricity consumption from such meters is in excess of this threshold and, therefore, it is captured under this arrangement and becomes classed as a large non-intensive energy user. Once an organisation is captured in this way, then the CRC will target both direct (gas and oil) energy use CO₂ emissions and all indirect (electricity) CO₂ emissions. Renewable energy generated on site will be exempt from the CRC, but `green' tariff electricity supplied through the national grid will not.

4.2

Participants In The Scheme: It is estimated that the CRC will include approximately 5000 organisations, such as supermarkets, hotel chains, hospitals, universities, central government departments and large local authorities. It can be seen therefore that the County Council will ultimately have to compete in a controlled market for carbon allowances with large commercial profit making organisations.

4.3

Schools: The position for schools is not clear at the present time, with Government on the one hand saying it does not propose to mandate schools within local authorities' portfolios, while at the same time as saying schools should be included if local authorities have voluntary agreement arrangements to pay school's energy bills, through bulk purchasing arrangements which the County Council does currently. The general tenor of the scheme, however, is to encourage local authorities to include schools within their portfolio, though the inclusion of schools in the CRC will make the operation of the financial incentives much more complex, because of school's ring-fenced budgets. This report is recommending that a decision on schools be deferred until this position is clarified by Government.

4.4

CRC Emissions Targets: The Government has estimated that the CRC will reduce CO₂ emissions nationally by around 4 million tonnes per year by 2020. In simple terms, this equates to an 8.5% reduction on present CO₂ levels, but the Government is also predicting that CO₂ emissions from these organisations will rise by 11% by 2030, if no action is taken to reduce carbon emissions. When this rise is taken into account the CRC will be aiming to achieve a 15% reduction overall per annum on CO₂ emissions levels by 2020.

4.5

Scheme Administration And Costs: For the first 3 years of the trading scheme (from 2010), carbon allowances can be purchased through a simple fixed price mechanism, expected to be set at a rate of between £8 and £16 per tonne of CO₂ being emitted. Thereafter, Government propose to apply a cap to the amount of carbon emissions and require participants to compete for available allowances via an auction process. The carbon trading scheme will be managed by a Government appointed administrator, who will set up and manage the auction process, recycle the auction revenue, construct the league table and conduct compliance audits of participants. The scheme administrator will levy a charge (estimated at 5% of auction bid) for this service. An estimate of additional staff time for the County Council to comply with the CRC is in the region of £50,000 to £100,000 a year depending on whether or not schools are mandated into the CRC and the complexity of the final scheme. Appendix 1(a) and 1(b) shows a Provisional Impact Assessment of Carbon Trading on the County Council.

4.6

Revenue Recycling: At a cost of £8.00 per tonne of CO_2, the auction of carbon allowances will raise in the region of £400m of revenue. Most of this money will be recycled to participants in such a way as to reward organisations that cut emissions and penalise those that do not. Initially the Government proposed a maximum reward or penalty of + or -10% within the recycling mechanism, but more recently consulted on whether a bigger financial incentive was required. In addition up to 10% (£40m) of the auction fund may be refunded as a grant for carbon reduction services by The Carbon Trust/Salixⁱⁱⁱ. It is anticipated that no recycling of auction revenue will take place before July 2011. This will result in increased interest costs in the first year of the scheme.

4.7

Performance League Table: The CRC will include a performance league table that will lever reputational drivers from organisations to commit to reducing CO₂ emissions. To some extent the league table will operate on the "polluter pays" principle as it will be used to determine whether an organisation will receive a bonus or penalty from the recycled auction revenue.

5.0

Energy Performance Of Buildings Directive

5.1

New regulations were introduced in March 2007 requiring Energy Performance Certificates (EPC) to be provided whenever a non-domestic building is constructed, sold or rented after October 2007. Public buildings over 1000m² (of which the County Council has approximately 500) shall, by October 2008, have a Display Energy Certificate (DEC) backed by an energy advisory report containing recommendations for improvement of the energy performance of the buildings. Each DEC is valid for a period of 12 months and not only must it be prominently displayed in a public place within the building in question, it has to be registered with the Secretary of State. The advisory report associated with the DEC is valid for 7 years and also has to be registered with the Secretary of State. Government is saying that this new directive will be an important tool in helping organisations to reduce carbon emissions in respect of their CRC.

5.2

Accredited energy assessors are required to be appointed to implement the new regulations. An estimate of the first year cost for implementing this new legislation for the County Council is up to £500,000 with annual ongoing costs of up to a £100,000.

6.0

Profile Of The Built Estate, Street Lighting And Their Respective Energy and CO2 Performance.

6.1

Size And Scale Of The Built Estate And Street Lighting

a) Built Estate: The County Council's Built Estate is comprised of some 7,000 buildings across 1000 sites, giving rise to a total floor area of just over 1.7m square metres.

b) Street lighting: There are 135,000 lighting columns and 10,000 illuminated signs and bollards, which consume electricity, on the County Council's 5,000 miles of maintained road. The County Council is expecting to commence a major replacement of its stock through the Private Finance Initiative. Although this will provide opportunity for more energy efficient lighting units, the Government's funding framework leads the County Council to increase lighting levels to comply with current national guidance. It would be perverse to then penalise the County Council for implementing a Government framework born from policy objectives relating to reducing crime, the fear of crime, and improving road safety, even though the relationship between lighting levels and these outcomes is weak in many areas of Hampshire. The County Council is working with the Department for Transport to resolve this matter.

6.2

Total Energy And CO₂ Emissions

a) The built estate consumes around 290 million kilowatt hours (KWh) of energy based on 2006/07 data. The cost of energy for the built estate last year amounted to £11.2million, nearly £1million per month. The 3 year average carbon dioxide emissions from the Council's property portfolio (including schools) is around 78,000 tonnes.

b) Street lighting consumes in the order of 48.7 million KWh of electrical energy and adds a further £3.4million to the annual energy bill. Expressed another way, street lighting costs on average over £9,000 each night to run. Emissions of CO₂ from street lighting adds a further 20,900 tonnes.

c) Appendix 2 gives a break down of energy use in terms of its cost and CO₂ emissions across the 5 main sectors of the built estate and street lighting. The illustration in this appendix and appendix 5 takes no account of the Council's purchase of green electricity. This is because, for carbon trading purposes, green tariff electricity supplied by the national grid will not be treated any differently from standard tariffs (the reason given is that green electricity generation is already subject to `upstream' incentives). The argument for this approach is that the requirements of the renewables obligation on energy generating companies effectively determine the amount of green electricity produced, not the willingness of consumers to pay a small premium for acquiring green electricity from the national grid. Therefore, for carbon trading purposes the County Council has a total carbon footprint that is approaching 100,000 tonnes of CO₂ from buildings, schools and street lighting.

6.3

Benchmarking: Appendix 3 provides information from the Chartered Institution of Building Services Engineers (CIBSE) showing a typical range of energy consumption data for certain building types. The CIBSE data is compared with the energy performance of the Council's own buildings, from which it can be seen that, with the exception of office buildings, the energy consumption from the built estate is broadly in line with CIBSE benchmarks. On the basis of this information it would be appropriate to review energy use in offices. As schools are such a large energy user work also needs to be done to help support them to manage down their energy consumption and CO₂ emissions.

6.4

Building Regulations Standards: The illustration in Appendix 4 gives a very broad indication of the performance of the County Council's property portfolio against modern thermal (Building Regulation) standards. The illustration shows that nearly 80% of the Council's buildings would not meet modern day thermal performance standards. The County Council's position in this respect will be no different than that of many other public and private estates up and down the country because new Building Regulations are generally not retrospective. The importance of this illustration is that it provides a broad indication of the challenge in trying to reduce energy use and CO₂ emissions from an aging building stock.

6.5

Total National UK CO₂ Emissions From Buildings: Total UK CO₂ emissions from buildings for 2005 are estimated to be 222 million tonnes. The actual CO₂ emissions from the Council's built estate is less than a third of one percent of the national total.

7.0

Discussion About Establishing A Meaningful Target for Reducing Primary Energy Consumption And CO₂ Emissions From The County Council's Built Estate And Street Lighting

7.1

National Climate Change Targets: The recent Energy White Paper and draft Climate Change Bill is set to put the UK on a path of reducing CO₂ emissions by at least 60% by 2050, with real progress by 2020, by means of legally binding targets. At this time the best indication of the legally binding targets that will apply to the County Council is set out in the proposals for the CRC. From section 4.4 of this report it can be seen that the CRC looks set to require by 2020 a minimum CO₂ reduction of 8.5% and as much as 15% taking into account the projected 11% long term growth in energy use.

7.2

Aalborg Commitments/County Council Ambition: Through its Aalborg Commitments, the County Council has already pledged to reduce primary energy consumption and increase its share of renewable energies. The Corporate Sustainable Development Steering Group is proposing that the performance score for this particular Aalborg Commitment (Commitment 3 - Natural Common Goods) be improved. At this meeting in November 2007, the County Council agreed to set a series of targets and actions to reduce its carbon footprint to zero.

7.3

Proposed Target Reductions From The Corporate Built Estate and Street Lighting: Taking into account the anticipated growth in energy consumption the CRC is pointing to a required reduction in CO₂ emissions of around 6,800 tonnes per year by 2020. If schools were to be mandated into the CRC this target would more than double to around 15,000 tonnes per year by 2020. This larger target may not seem like a lot to achieve but in practical terms it is the equivalent of making up to 33 secondary schools carbon zero within the next 13 years.

7.4

Appendix 5a examines the trend for CO₂ emissions from the property portfolio (including schools) and street lighting over the last 6 years. Appendix 5b examines the same tend without schools. Although there has been some small annual fluctuations in CO₂ emissions between 2000 and 2006, the overall trend is fairly static over this period. This is despite a background of the County Council making significant investment for improving buildings through its capital programmes. This would lead to a conclusion that it will be challenging to stop the increase in energy consumption let alone reduce it. To achieve a sustained year on year reduction in CO₂ emissions will take a corporate effort from all departments and their staff. A corporate work plan (to be developed) is outlined in Appendix 6.

7.5

The Contribution Of "Green Electricity": It is worth noting that the County Council's purchase of "green" electricity from the national grid saves about 40,000 tonnes of CO₂ each year in respect of street lighting and the built estate. For the purpose of the proposed CRC scheme, the Council will not be able to claim a carbon credit for this `green' sourced electricity, on the basis that the decision to purchase `green' electricity from the national grid does not reduce the overall level of CO₂ emissions that is expected from CRC organisations.

8.0

Corporate Work Streams For Achieving Energy And CO₂ Reduction Targets

8.1

This section of the report is recommending that a number of corporate work streams be developed that will help achieve energy and CO₂ reduction targets from the built estate and street lighting. It is recommended that these work streams be developed in agreement with CMT and will be presented to the Buildings Land and Procurement Panel and recommendations about future programmes be made to the Executive Member for Policy and Resources.

8.2

Corporate Work Stream 1 - Changing The Culture Whilst this work stream will have one of the lowest capital outlays, in many ways it is one of the more challenging work plans, as it has to influence the long-term behaviour of the Council's staff and local managers in order to be effective. Achieving long term high performance in local management of end energy use is vital for achieving carbon dioxide reductions. Within this work plan it is suggested that a Corporate energy policy is developed for the County Council. Another significant part of this work stream is to modernise the way energy information is collected and managed and is recommending a major feasibility study to look at the use of smart meters to help improve local energy management. A review of the energy performance of offices is another key factor of this work stream. One of the recommendations in this report is to engage with the Carbon Trust and its subsidiary organisations to work with the County Council in developing a compliance strategy for carbon trading.

8.3

Corporate Work Stream 2 - Medium Scale Capital Investment This work stream is principally looking to capitalise on many of the things the County Council is already doing in terms of investing its capital programmes in a way that secures a reduction in energy use and CO₂ emissions. This work stream is also proposing some major new feasibility work to consider the practical options for the future by examining the potential for upgrading pre 1986 buildings to achieve a lower carbon status. Given the large number of SCOLA school buildings for instance it will be important to find ways to not only make them more energy efficient but also to adapt them to cope with any future impacts from climate change. The Strategic Property Review is another important initiative within this work stream that will help to secure efficiencies from the property portfolio through modern ways of working.

8.4

Corporate Work Stream 3 - Strategic Capital Investment This work stream is the most innovative and looks at options and opportunities to develop greater self-sufficiency and security of fuel supplies through the development of low and zero carbon fuel technologies and alternative energies. This work stream will become critical if energy use cannot be driven down by changing the culture and behaviour of end users of energy. It is however a work stream that will require significant further feasibility and financial analysis to establish its cost viability before investment in this area should go ahead.

9.0

Financial Implications Of The CRC Scheme

9.1

The Government commissioned consultants to undertake a partial regulatory impact assessment of the CRC scheme designed to assess the burden of the proposed scheme on participants. This concluded that on the basis of the proposed target reduction in emissions by 2020, that the scheme should have a positive financial impact on participants, in view of the assumed scope to make significant savings in energy without the need for substantial investment in emission control or abatement measures.

9.2

Appendix 1a and 1b indicates that on the neutral assumption that the County Council is neither rewarded nor penalized in the recycling of allowance revenues and derives an appropriate benefit from `free' services provided by the Carbon Trust/Salix, that the administration and interest cost of participation in the CRC would be about £200,000 per annum in a typical early year, if schools are included. In the first year there will be an additional interest charge of up to £88,000. However, if the County Council could achieve an 8.5% to 15% reduction in energy consumption by 2020, this would save about £1.2m to £2.1m per annum in energy costs compared with current costs. A critical issue, therefore, is how far savings on this scale can be achieved, as the impact assessment assumes, by better management of energy use (i.e changing behaviour) rather than requiring substantial investment in emission control or abatement measures.

10.0

Conclusion

10.1

The Carbon Reduction Commitment (CRC) scheme will set legally binding targets on the amount of CO₂ emissions from large private and public organisations, such as the County Council.

10.2

It is unclear at this stage whether or not schools will be mandated into the Council's CRC and any decision to set energy and CO2 reduction targets for schools should be deferred until this position is made clear by Government.

10.3

The level of energy consumption from the corporate estate and street lighting is such that regardless of the position on schools, the County Council will become a CRC organisation. In any event schools should be encouraged to reduce energy use and CO₂ emissions and will need to be supported in achieving this.

10.4

The CRC looks set to drive CO₂ reductions from the County Council's corporate estate and street lighting operations of up to 6,800 tonnes a year by 2020. This is the equivalent of around 0.5% year on year target reduction. The County Council must at least achieve this target. Whilst a higher target would help promote the County Council as a community leader, help its position in the CRC performance league table it would come at a high price and would be likely to require a more radical examination of the way energy is supplied and used in the County Council.

10.5

Given the size and age profile of the built estate, the constant pressure to consume more energy by building users and increasing demand for greater use of buildings by the community, any reduction targets will not be easy to achieve. Similarly the new standards for improved street lighting will also present challenges for achieving CO₂ emissions from this major activity, particularly in view of the Government's competing initiatives for more street lighting in respect of meeting the crime and disorder agenda.

10.6

The CRC target reductions for CO₂ emissions should help to set the County Council on a path to achieving its ambition for there are a number of other drivers that will help to influence the stance that the Cabinet will wish to take in this matter, including:

· Improving the County Council's Aalborg score for commitment 3.1- reducing primary energy consumption and increasing the share of renewables.

· Becoming a community leader in Hampshire and nationally meeting objectives connected with the new National Performance Indicator set new Local Government Performance Framework.

· Reducing the annual energy bill which currently stands at around £14.3 million . Every pound saved on energy is a pound that can be spent on other services.

LINK(S) TO CORPORATE STRATEGY

Yes

No

Hampshire safer and more secure for all

_

Maximising well-being

_

Enhancing our quality of place

_

Provisional Impact Assessment On Hampshire County Council Including Schools (typical early year)

Scenario 1: Mandatory Half-Hourly Electricity Metered Sites plus Discretionary and Non-Half-Hourly Metered Sites (In Other Words All Sites) (Early Carbon Trading Capped At Say £8 to £16 Per Tonne)

Carbon Trading

With Schools @ £8/Tonnes

With Schools @ £16/Tonnes

Tonnes of Co2

Rate

Amount of bid

Tonnes of Co2

Rate

Amount of bid

Cost @ £8 & £ 16 per tonne Co2

100,250

£8

£802,000

100,250

£16

£1,604,000

Out Going

Income

Net Expenditure

Out Going

Income

Net Expenditure

Auction Bid

£802,000

£1,604,000

Scheme Admin (5%)*

£40,100

£80,200

Interest charge

£22,000

£44,000

HCC Admin (internal)

£100,000

£100,000

Cash Refund (90%)*

£721,800

£1,443,600

Salix Token Recycling (10%)*

£80,200

£160,400

£964,100

£802,000

£162,100

£1,828,200

£1,604,400

£224,200

Good performance Incentive (10%)*

£80,200

£81,900

£160,400

£63,800

Poor performance penalty (10%)*

£80,200

£242,300

£160,400

£384,600

* 0f Auction Bid

Footnotes:

Exclusions:

1 - including "Green" electricity

a) Excludes costs of emission control or abatement measures

b) Excludes savings from reduced energy use

Provisional Impact Assessment On Hampshire County Council Excluding Schools (typical early year)

Scenario 2: Mandatory Half-Hourly Electricity Metered Non-School Sites plus Discretionary and Non-Half-Hourly Metered Sites (In Other Words All Non-School Sites) (Early Carbon Trading Capped At Say £8 to £16 Per Tonne)

Carbon Trading

Corporate Estate @ £8/Tonnes

Corporate Estate @ £16/Tonnes

Tonnes of Co2

Rate

Amount of bid

Tonnes of Co2

Rate

Amount of bid

Cost @ £8 & £ 16 per tonne Co2

42,100

£8

£336,800

42,100

£16

£673,600

Out Going

Income

Balance

Out Going

Income

Balance

Auction Bid

£336,800

£673,600

Scheme Admin (5%)*

£16,840

£33,680

Interest charge

£9,000

£19000

HCC Admin (internal)

£50,000

£50,000

Cash Refund (90%)*

£303,120

£606,240

Salix Token Recycling (10%)*

£33,680

£67,360

£412,640

£336,800

-£75,840

£776,280

£673,600

-£102,680

Good performance Incentive (10%)*

£33,680

-£42,160

£67,360

-£35,320

Poor performance penalty (10%)*

£33,680

-£109,520

£67,360

-£170,040

* 0f Auction Bid

Footnotes:

1 - including "Green" electricity

Exclusions:

a) Excludes costs of emission control or abatement measures

b) Excludes savings from reduced energy use