Possibility of receiving CERT funding from British Gas

The club focuses particular attention on assisting consumer electronics manufacturers to design more energy efficient products so that they may gain benefits through the Carbon Emissions Reduction Target (CERT) programme. CERT is the UK Government's main policy instrument for reducing carbon emissions from households and follows on from the earlier Energy Efficiency Commitment (EEC) programme. Starting on 1 April 2008, CERT requires obligated electricity and gas suppliers to achieve targets for reducing carbon emissions from domestic properties in Great Britain.

CERT obligations on energy suppliers

Starting on 1 April 2008 and running to March 2011, CERT requires obligated electricity and gas suppliers to achieve targets for reducing carbon emissions from domestic properties in Great Britain. Each licensed energy supplier with at least 50,000 gas or electricity domestic consumers is subject to an individual Carbon Emission Reduction (CERT) target. The overall target is set by DEFRA and is allocated between suppliers based on their total number of domestic energy customers. Suppliers can be fined up to 10% of their corporate turnover if they fail to meet the targets.

Suppliers meet their targets by setting up schemes to deliver improvements in energy efficiency, eg delivering free low energy lightbulbs to low-income households or subsidising the cost of loft and cavity wall insulation. At least 40% of the activity must be targeted to low-income and vulnerable households to ensure that this group receives an equitable share of the energy efficiency benefits.

Ofgem, the regulator for the gas and electricity markets, manage compliance with the scheme and monitor progress towards and achievement of the target, they have procedures to assess suppliers' schemes and oversee progress and compliance. Ofgem will approve a scheme if they are satisfied that it will lead to an improvement in energy efficiency.

Innovative energy efficiency schemes from British Gas

British Gas is the largest energy supplier in the UK with 40% of the market. It is also the most innovative energy supplier and is constantly exploring new ways in which it can support actions which will reduce domestic energy consumption.

For example, in 2005 British Gas developed a proposal with Sony to provide funding to promote increased sales of integrated digital televisions (iDTV). An iDTV includes a digital tuner and therefore eliminates the need to purchase a separate set top box. The energy saving from the set top box can be taken for the average 7 year lifetime of a television. The lifetime discounted energy saving that is claimed is 50 KWh British Gas presented these energy savings to Ofgem and paved the way for all manufacturers to be able to gain funding from energy suppliers to promote increased sales of iDTVs to households in Great Britain.

British Gas has set up other energy efficiency schemes within the consumer electronics sector and with leading boiler manufacturers. This scheme provides funding to promote increased sales of more energy efficient condensing boilers to households.

British Gas is currently developing several more innovative energy efficiency schemes, details will be published in 2008.

CERT scheme for club members

British Gas has agreed to support the Club to provide an incentive for manufacturers to design and develop innovative energy efficient products. The club is working with British Gas who will seek CERT approval from Ofgem so that British Gas can provide funding to manufacturers whose products deliver significant energy savings, to assist in promoting sales of these new products to households. The club, again working with British Gas, also guides companies on whether their existing, more energy efficient products may already be eligible for CERT funding to promote increased sales.

The Club aims to assist members to identify energy savings which will result in significant levels of CERT funding. The funding is available for three years starting from 1 April 2008. Eligible products must be sold primarily to residential households and must include new energy efficiency technologies or approaches which will result in significant energy savings compared to existing industry standards.

The club compiles data from member companies on proposed product energy efficiency savings, how these will be delivered and the anticipated annual volumes and presents this to British Gas. British Gas then submits this data to Ofgem and manages the process including validation of the savings and how they are achieved for approval. If the proposed product energy efficiency savings are approved by Ofgem, British Gas will pay the CERT funding to the club who will forward the money to the relevant companies.

The club compiles product energy savings data and manages CERT payments for:

• Groups of companies who manufacture a similar type of product which is more energy efficient than alternative product types (for example, iDTVs as discussed above).
• Individual companies who wish to propose that their particular product design is more energy efficient compared to the industry average for that type of product.

For further information, please contact Dr Aidan Turnbull
Head of WEEE, RoHS & EcoDesign on +44 (0)1225 748420