INFORMATION SHEET 23

GOVERNMENT REQUIREMENTS FOR DATA COLLECTION AND DATA AUDITING

Within a Climate Change Agreement (CCA) it is mandatory for each operator to provide accurate information about energy usage, production levels and eligibility.

This information is submitted to DEFRA via your Sector Association on the basis of "self certification subject to DEFRA audit". DEFRA is very concerned that data submitted should be as accurate as possible and has become worried by the high proportion of random audits that have identified incorrect data and poor control of the data collection process. In December 2001 DEFRA issued an important paper on this topic:

CCA(01)03 Performance Data and Auditing for the 1st Milestone:
Guidance on Requirements

This document is lengthy (26 pages) and provides guidance to both Sector Associations and individual site operators about data collection requirements. The full document can be downloaded from our website on www.cclevy.com. The purpose of this Information Sheet is to highlight the most important aspects of CCA(01)03.

Importance of Good Data Collection

It is self evident that the integrity of the CCA process is reliant on accurate data being submitted by operators. This point is stressed in the DEFRA Guidelines:

"Failure to present correct data may lead the Secretary of State to decide not to re-certify the facility (see Clause 7.9(b)(ii) of the umbrella agreement). If there is evidence of fraud the case will be referred to HM Customs and Excise."

DEFRA expect you to maintain a good audit trail for the data submitted on the various forms sent to the Discount Scheme. During random site audits they have been surprised by the number of companies that have been unable to justify data on the original Application Form or in subsequent annual data returns. In a number of cases the person originally responsible for collecting the energy and production data has left and nobody else has knows where the data has come from! Clearly this is an unacceptable situation – a common-sense approach to data collection would ensure that copies of key documents are kept on file avoiding this type of problem. Indeed, there is a contractual requirement to keep good records:

"The information should be retained for auditing purposes for at least six years. This period is in line with HM Customs and Excise requirements for retention of information on VAT payments, etc."

Keep a CCA Data File

An obvious and vital step is to keep all CCA data together in a file that can be shown to auditors should it be required. This should include copies of:

  • All forms submitted to the Discount Scheme (e.g. Application Form (including site plan showing facility boundary), Supplementary Information Form, CCL Year 1and CCL Year 2 Data Forms).

  • All backup material to justify data shown on the forms. In particular this refers to data that justifies the energy consumption figures (e.g. meter readings and invoices) and production records.

  • Any other important correspondence and material (e.g. CHP Stage 1 analysis, notifications regarding changes of circumstance etc.).

  • If appropriate, records of other activities linked to emissions trading, product mix algorithm, regulatory constraints and the Qualitative Requirements.

The CCA Data File should also clearly show who is responsible for the Climate Change Agreement on site and who is their deputy.

If you are missing copies of any data that has been submitted to the Discount Scheme contact our Help Line on 0161 874 3668 and we will arrange to send you copies (there will be a small administration charge to cover copying costs).

The Evidence Pack

CCA(01)03 includes a list of suggested information for an Evidence Pack:

"To help ensure CCA data accuracy and prepare for a possible independent audit it is strongly recommended - though not mandatory - that the following information be kept by each operator in an evidence pack".

The list of information required in the Evidence Pack is shown in the attached table, together with some explanation of what DEFRA is expecting. The table is split into 2 parts:

  • Part A describes information that should be kept by all site operators.

  • Part B describes optional information that will only be required in appropriate circumstances (e.g. trading data need only be kept by sites that buy, sell or bank CO2 credits).

You should carefully review the attached tables and ensure that you would comply to the requirements if you were audited.

Evidence Pack Part A: Data Required from All Sites

Data Item

Comments

1. Evidence of a formal appointment of a CCAs project manager and a deputy.

Designating who is responsible for CCA data is an important step in ensuring data accuracy.

The auditors are likely to check that each operator has a designated person responsible for providing accurate CCA data to the sector association, and if there is a designated deputy. Your evidence pack should include a written statement for the appointment of the designated person, and deputy.

2. Written procedures for data collection, handling, transfer, and error checking. Plus any procedures for product mix, throughput change calculations and activity factors.

Written procedures reduce the risk of error. The auditors will be looking for written procedures to give them confidence that the data is accurate. The auditors are likely ask whether:

  • there are written procedures for data collection, handling and transfer;
  • where applicable, there are written procedures for product mix and throughput change calculations and in certain cases for the use of activity factors;
  • there are procedures for error checking of data;
  • there is evidence that the above procedures are being is carried out.

3. Copies of all CCA data submissions to the sector association/DEFRA

The Auditors will require copies of the submissions of energy and production data to the sector association. The auditors will use this information as a starting point for their audit.

If, prior to audit, an error is found in the CCA submissions (in the base data or in one of the annual submissions to DEFRA), the operator should contact their sector association immediately, explain the error and provide the corrected data. The operator will need to provide supporting information on the cause of the original error and why the new data is preferable. The sector association will discuss with DEFRA the error and subsequent changes in the operator’s data.

It is good practice to also keep copies of any PP10s and PP11s submitted to your energy supplier and Customs and Excise.

4. A map or equivalent document indicating eligible areas, input and output energy flows and production. Any meters used in the monitoring process should be identified on the map or in the document.

The majority of sites with a CCA site pass the "90/10 rule" (see Information Sheet 2), which makes all energy use on site eligible for the CCL discount. In this situation the map simply confirms the site boundaries. (Note: A review of the site’s compliance with the 90/10 rule should be undertaken on an annual basis using the scheme data collection form.)

However, for sites that fail the 90/10 rule the map is of greater importance as it needs to show which parts of the site are eligible and indicate how energy flows to the eligible part are measured.

It is recommended that facility or site maps should indicate:

  • the boundary of the site;
  • for eligible facilities that do not occupy an entire site, the boundaries of the site and the energy intensive facility within it;
  • location of: incoming energy supplies; utility meters; meters recording exports; sub-meters defining split of eligible and non-eligible energy; on-site power generation .

5. Production records.

You must provide data on the throughput of the site. Auditors may ask:

  • who is responsible for accuracy of information;

  • is same information used for company reports etc;

  • can a list be provided of all products or product groups produced within the facility;

  • how accurate is the measurement of production, and are the instruments used calibrated regularly;

  • if a proxy used for production (e.g. activity factors), can justification be shown for the use of this proxy for production, and can agreement be shown for the use of this proxy with the sector association and DEFRA.

6. Energy records – evidence of all energy flows into (and, if appropriate, out of) the site.

For each energy stream into and away from the facility, the auditors may ask:

  • who is responsible for accuracy of information;

  • can the invoices/records be viewed and checked;

  • how accurate are the meters;

  • are readings routinely checked against historical values and/or against expected values;

  • is the data used in company reports/environmental reports etc.

Auditors will verify the accuracy of the energy data provided. Copies of each monthly invoice for each energy stream, e.g. electricity, gas, and fuel oil, should be available for inspection. Where possible, utility company meter readings should be the prime source of data, but if own meters are used instead of utilities metering, then verifiable records of readings should be kept. In this situation the auditors will want evidence of agreement between these meters and the utility meters.

Each operator should keep records of energy use for the base year (where applicable) and for each year of the CCA. These records should be in the form of invoices or other substantive records. If available, evidence of the use of data for other purposes (for example - company reports) should be kept. If the invoiced/metered energy covers areas not included in the CCA, the operator should have documented procedures for apportioning energy and have records of any calculations carried out.

If there is a failure of a meter or a lack of an invoice, which is for only a few months, then estimates should be made which are based on previous experience and expected energy use. It is important that records are kept of the basis for how the estimate was made. These estimates should be reconciled once meters are back in action.

If an invoice is thought to be inaccurate, the operator should keep evidence of the reason the invoice is thought to be incorrect and any subsequent discussions or correspondence with the utility company.

Any changes in data (due for example to the discovery of errors, changes in gas calorific value, or an originally estimated meter reading) should be recorded with the sector association. Records of the changes, the justification for the changes, and correspondence with the sector association should be kept in the evidence pack.

7. Meter readings and calculations, for any other "non-utility" energy flow onto and out of the facility (e.g. steam).

Your site map should clearly show where "non-utility" energy meters are used to monitor energy flows on and off the site (and, for sites that fail the 90/10 rule, on and off the eligible part of the site). Keeping a good audit trail for import and export of non-utility energy, especially steam, can be relatively difficult. Keep as much data as possible to justify the figures used.

8. Descriptions of conversion factors used and related calculations carried out

One of the most common mistakes found in audits is in the use of conversion factors. In the course of collecting data, there will be a need to carry out conversions from one unit to another and to convert from delivered to primary energy. These conversion factors should be used with care, and their use and any related calculations should be documented.

9. Copies of annual energy and production spreadsheets used in the CCAs data gathering exercise

The auditors will want to determine whether:

  • monthly energy and production data have been transferred correctly to a spreadsheet;
  • whether data conversions are handled correctly;
  • is the spreadsheet is error free;
  • do totals agree with the information sent to the Sector Association.

The auditors may wish to see hard copies of the spreadsheets used to collate the monthly energy and production data for CCAs. It is recommended that a hard copy of each year’s spreadsheet be kept within the evidence pack.

10. Written evidence of data checking and any follow-up as a result of errors found.

In order to produce accurate data, the operator should have error checking procedures in place, and keep records of carrying out these procedures, and of following-up any errors/anomalies found.

Examples of error checks include:

  • checking energy invoices against previous invoices and against expected energy use;
  • checking against comparable sites/processes elsewhere if the information is available;
  • automatic error checking on spreadsheets of variations in entries of for example 10% from previous entries;
  • manual checking of any conversions carried out;
  • comparison of spreadsheet entries (where applicable) with invoices, checking of calculations carried out;
  • final check of submission to sector association.

If errors are found, they should be recorded, as should be the follow-up action that was taken to correct the error.

11. Evidence of notification and agreement of any adjustments to data due for example to variations in gas calorific values and originally-estimated meter readings.

12. Any other information on specific discussions on CCAs with Sector Association and DEFRA.

13. Any other relevant internal documents.

 

Evidence Pack Part B: Optional Evidence Pack Data

Data Item

Comments

1. Only for sites that fail the 90/10 rule:

Where energy is split between eligible and non-eligible parts of facility, then a description of apportionment method should be written down and kept.

Accurate measurement of energy use is essential for good energy management and so where meters have not yet been installed, estimates will be accepted for the first target period only. Operators should work to providing meters to measure eligible facility energy use and make every effort to ensure the information supplied is as accurate as possible. Energy data should be derived from metered accounts or invoices. The basis of estimates must be available for audit. If it is impractical to submeter at discrete process level, then a robust regime to determine energy flows must be established and documented, for example by periodic campaigns with clip on meters or by inference from other process parameters. These procedures must be repeated at appropriate regular intervals or where there is a significant process or product mix change.

Meters should be regularly calibrated, and records kept of the meter readings and of any calibration checks. Experience suggests that it is worth checking that the meters do actually cover the required parts of the facility.

2. Only for sites using the Product mix and output algorithm:

Evidence/justification of energy use of each product, where product mix is an issue.

Evidence/justification of variation of energy use with output, for use in any throughput change adjustment.

Detailed guidance on product mix and output adjustments is available in CCA(01)08. The auditors may wish to see:

  • agreement for the adjustment procedure and relevant base data,
  • for product mix adjustments, records of energy use for each product stream;
  • evidence or justification for the energy use for each product stream;
  • calculations of the effect on the target of changes to product mix;
  • for output corrections, evidence for the variation of energy use with output;
  • evidence of calculation of the effect on the target of changes in output.

If operators use a product mix algorithm to adjust their targets they should have verifiable records of the energy use for each of the products, or be able to justify their method for estimating the energy use of each product.

3. Only for sites that are claiming that a fuel use is exempt from the Levy:

Details of evidence to support exemption of energy use from the Climate Change Levy and/or from energy targets within a CCA.

There are certain 100% exemptions from the Climate Change Levy including:

  • use of a fuel material as a feedstock
  • use of renewable sources
  • use as a fuel for good quality CHP

You must keep records of the justification for such exemptions. For CHP you will need a CHP QA (quality assurance) certificate (see Information Sheet 11). For renewable energy you will need to show that the energy supplied was not part of the Suppliers "Renewable Obligation".

4. Only for sites wishing to apply Tolerance Band or Regulatory Constraints:

Records of qualitative measures and progress on energy efficiency measures.

CCAs contain a list of qualitative energy efficiency measures that operator will carry out. (See Information Sheet 7 or Schedule 3 of the underlying agreement for details). It is recommended that records should be kept of the implementation of these measures and of any measurable results. Example of what should be kept include:

  • an energy plan;
  • energy steering group meeting minutes;
  • energy management records;
  • details of energy campaigns;
  • a record of the installation of energy efficiency equipment
5. Certificates of any carbon trading.  

 

 

 

 

 

 
 
 
[CCL Home] [MPMA Home] [Calculate] [Guidance]
[Information] [Register] [Links] [Contacts] [News] [Training]