Under the new legislation all major energy users will have to register with a new government scheme that will require them to publicise their energy use and demonstrate that they are taking practical steps to achieve reductions. And the deadline is looming – companies need to register by the end of June 2010.

According to Chris Stubbs, director at WSP Environment & Energy, there is a dangerous level of complacency among shopping centre owners and managers. “The rule is that whoever buys the energy has to account for it,” he explains. “Yet a lot of people seem to think they don’t qualify so they don’t have to do anything.”

The thresholds above which businesses have to register are quite clear: any business using over 6Mwh – which equates to roughly £500,000 of energy a year – or any business that has had half-hourly metering on the half-hourly market since 2008 – must register. And those that fail to do so are liable for fines of £5000 and £500 per day until a registration is submitted.

But that’s not the end of it, according to William Morris, managing director of Energy Solutions Consultants. As part of the registration process companies have to submit a “robust” report detailing their usage of electricity, gas, oil, water and other energy sources dating back to the beginning of 2008, Morris explains.

Organisations will then be expected to purchase carbon allowances at £12 per tonne to off set their emissions and submit a detailed roadmap of how they intend to reduce those emissions over the next few years.

League tables of the best and worst performing companies will be published at the end of each year and, depending on how well they have done, organisations will either get up to ten per cent of their energy costs back or have to pay ten per cent more. Those figures are due to rise year on year to plus or minus 50 per cent.

And the buck is passed to the very top of any participating business according to Morris. “To ensure correct accounting directors will be required to sign off on the energy use reports and could face up to three years imprisonment if they knowingly falsify the information,” he warns.

The government estimates that 5,000 businesses will be caught in the net, and according to WSP’s Stubbs this will include most shopping centres. “Most tenants buy their electricity discretely, but it’s not uncommon for the landlord to supply hot water, ventilation, cooling and so on,” he says. “That means almost every shopping centre will have to register and if they have more than one centre they will find themselves participating,” he warns.

And it will not be enough to say that individual centres are held in separate subsidiaries, according to Stubbs. “The law devolves the responsibility to the ultimate holding company for every asset where it has a holding of more than 50 per cent.”

Significantly for institutional investors, that means companies could find themselves liable for property assets that their company pension scheme has invested in.

“We’re working with a major banking group and major utility companies to identify where their pension funds have invested,” he says. “In the end it’s the operating company that has to register.”

However a late amendment to the Act has allowed companies to make separate registrations for subsidiaries, under a process called ‘disaggregation.’ Provided the parent company makes its registration by 30 June, it will then have three months to disaggregate its subsidiaries.

So what practical steps should companies be taking? “Companies should start by drawing a map of their company and its property holdings, and then of its individual meters,” advises Stubbs.

But he warns that companies that have not started the process by now might have left it too late. “For every property it’s not sufficient to get past data on energy usage – you have to put the system in place to monitor usage at least once a quarter going forward.”

As a measure of the complacency in the marketplace, Applied Relational Technology recently polled centre managers to see what steps they were taking. Only 26 per cent of those surveyed said that new legislation had prompted them to change their reporting systems. And over half (53 per cent) are still thinking about adopting a new system to meet the Carbon Reduction Commitment.

Neil Townsend, senior consultant at ART said: “We are already working with a portfolio of centres to help them monitor their energy usage and report it back in a more efficient way. This will ensure that the targets that are set when the CRC new changes come into force are monitored monthly even weekly.”

For most companies covered by the scheme, the simplest way of achieving this will be to install Automatic Meter Reading systems for both their electricity and gas supplies that do not already have a mandatory requirement for half-hourly metering.

And John Field, director of carbon management at Power Efficiency points out that this change will provide automatic credits in the public energy efficiency league tables. “Voluntary installation of AMR on fiscal meters accounts for 50 per cent of the league table ranking in the first year and then 20 per cent and ten per cent in the following two years,” Field explains.

“AMR can drive cost savings and has a fast return on investment, as well as significantly affecting league table position, but March 2011 is closer than companies think given the task of getting AMR right,” he says.

“It is rarely a smooth process – taking time to assess estates, rationalise requirements for metering, calculate the right investments, and all this is before you actually get to installation and receiving meaningful information from the 17,520 readings a year that each meter produces.”

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