Glossary

Carbon Footprint

There are several definitions of what a Carbon Footprint should include but generally a carbon footprint is the total amount of carbon dioxide (CO2) and other greenhouse gases released over the full life cycle of a product or service. For most businesses, it is simply a measure of how much CO2 they use as part of their business cycle such as electricity, gas, coal, gas oil, propane, petrol, diesel and air travel.

CRC

Carbon Reduction Commitment is a new Carbon Trading platform set to encompass UK businesses who consume more than 6MWh of half hourly electricity per year. The 6MWh can be made up of several sites within an organisation and therefore it will affect large single sites as well as smaller multi-site organisations. The benchmark year for inclusion into this scheme is 2008 with the carbon trading due to start on the 1st January 2010.

Climate Change Levy

Introduced in April 2001, this taxation is applied to all business paying full VAT on their gas and electricity and was designed to help the Government raise revenues to assist in the development of cleaner energy technologies and to encourage businesses to reduce their own consumption levels. Reductions are available for some types of business and in some cases there are complete exemptions.

Forward Price Curve

Electricity and Gas prices are traded on the market as commodities and as such are very volatile with prices changing on an hourly basis. The forward curve allows traders, suppliers, and consultants to purchase volumes of energy for the future at today’s prices. Buying ahead, for both consumers and suppliers, can prove very beneficial if market prices move upwards but the reverse is also true if market prices fall closer to the actual delivery date. Forward electricity and gas prices can be displayed in a variety of ways, however, the curve is generally regarded as the simplest format.

Flexible Purchasing

Although large energy consuming companies have been able to purchase their energy in tranches, be that daily, weekly or monthly, there are now opportunities for smaller consumers to benefit from the flexible purchasing arrangements that are in the market place. Flexible purchasing allows for you to buy a certain percentage of your energy needs at a fixed price and leave the remainder floating. The floating element can be purchased on a daily, weekly or monthly basis. Their are risks to this type of contract but a skilled analyst can help in deciding how much to fix and how much to float. Potentially, this type of contract can generate very large savings with compared when a fixed price contract.

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