The ‘climate tax' bills facing Bradford's big employers

7:52am Thursday 19th August 2010

By Jim Greenhalf

Public spending is going to be slashed. VAT is going up to 20 per cent in January. Out of the VAT and into the fire, you might say.

But there’s more. Up to 6,000 companies and enterprises, including Bradford Council, are going to be paying a carbon tax on their electricity consumption.

The T&A can reveal that Bradford Council’s annual energy bill of £6m is going to cost about £1m in carbon emissions tax next year, while Bradford Teaching Hospitals NHS Foundation Trust (St Luke’s and Bradford Royal Infirmary) will be paying about £136,000 on its £2m energy bill. And it has already cost each organisation more than £2,000 just to take part in the scheme.

Not that they have any choice. All organisations consuming 6,000 megawatt hours or more of energy a year are obliged to register by September 30 this year.

Failure or refusal to comply with the provisions of the 2008 Carbon Reduction Commitment Energy Efficiency Scheme will result in fines and other penalties. There is a registration fee of £950 and an annual administration fee of £1,290.

Both Bradford Council and the hospitals trust are optimistic their performance on reducing CO2 emissions will result in a refund of their carbon credits spending, once the scheme is fully under way.

Under the former Labour Government, the Department of Energy and Climate Change declared the carbon reduction measures would encourage organisations to economise on electricity consumption and thus save money.

Carbon credits currently cost £12 a tonne to buy. This is in addition to paying power companies for the supply of gas and electricity.

The Department for Energy and Climate Change states: “All money raised through the allowances will be recycled back to participants, according to how well they perform. The scheme features an annual performance league table that ranks participants on energy and efficiency performance…”

Bradford Council’s total annual energy bill of £6m equates to about 55,000 tonnes of carbon emissions. Initially, the local authority will have to spend £1m buying carbon credits, but that will come back, with a cash bonus, if its position in the league table rises, said Richard Williamson, the Council’s environment and climate change manager.

He says: “In January, the Council committed itself to a 20 per cent reduction in energy consumption by 2020, and to try to source another 20 per cent of energy from renewable energy sources. If we do that, we should cut our energy bill by £600,000 at least before 2020.”

Among the top 20 of the Council’s energy-consuming buildings are the Richard Dunn Sports Centre and City Hall. Mr Williamson outlined some of the counter-measures that have been introduced.

“We have a bio-mass boiler at City Hall and at Ilkley Town Hall, which burn locally-sourced wood chips rather than gas or oil. At Richard Dunn, we have put pool covers in to retain heat in the water. We are also looking at air conditioning, heating and ventilation systems,” he says.

“The beauty of this is it’s really just good housekeeping. Energy-efficiency is an easy win; it’s something everybody can play a part in.”

Ian Buckle is the environment and sustainability manager for Bradford Royal Infirmary and St Luke’s Hospital, which together emit about 12,000 tonnes of CO2 a year, a figure the hospitals trust plans to cut by 20 per cent in the next five years. Depending on gas and electricity prices, the trust hopes to save around £288,000 on energy bills.

Mr Buckle says: “We’ve spent £2.2m taking out old steam boilers at St Luke’s for a modern combined heat and power unit, an engine which generates heat and electricity.

“We’re in the middle of taking out steam boilers at BRI for gas-efficient boilers which should save about five per cent on the gas bill.

“We have obtained funding to look at low-energy lighting schemes, Light Energy Diodes (LED) for car parks, and PC software that switches off personal computers at night and during weekends.

Meanwhile, the Saltaire-based Bradford District Care Trust, responsible for treating mental health problems and learning disabilities, had looked at the possibility of installing an electricity-generating turbine in the River Aire, but the estimated cost of £1m proved prohibitive.