The Climate Change Levy

The Climate Change Levy, also known as CCL, could provide an additional revenue stream to the project.

What is the Climate Change Levy (CCL)?

The CCL is a tax on the business use of energy and it came into effect in April 2001. It was designed to try to encourage improved energy efficiency measures and reduce carbon emissions.

It essentially requires suppliers to charge commercial customers an additional fee; currently 0.456p/kWh for electricity in 2008/2009; when purchasing electricity, which is then remitted to the Government and used to fund energy saving programs and provide a national insurance contribution break. It is therefore intended to be revenue neutral for business.

Electricity that is generated from recognised renewables and approved cogeneration schemes are exempt from the tax. However, they are issued with CCL exception certificates, which can then be sold. There are various beneficiaries, depending on how generators and suppliers sell the CCL exemption certificates.

For example:

· For certificates sold with the electricity, the supplier could reduce the price of the power, passing on the saving to the consumer and therefore increasing the company’s competitiveness within the market place. Or alternatively, the consumer could be charged for the CCL (by incorporating the CCL into the electricity price), and providing additional revenue.

CCL Effect on the Project

Possible income from CCL exception certificates will be ignored for the purpose of the economic analysis because there are several possible beneficiaries and the tax only applies to business users of energy, which makes it difficult to accurately quantify the likely revenue from this source.

Bibliography:

· Climate Change Levy: http://www.cclevy.com/index.html

· Renewable Obligation, and Climate Change Levy: http://www.nowap.co.uk/page7.html