Overview

For private equity firms with businesses in the UK, it was disappointing that the final form of the CRC Energy Efficiency Scheme regulations took no account of the concerns of the private equity industry. These new rules, which will come into force less than three weeks from now on 1 April, will require all UK businesses with more than a certain level of electricity consumption to register with the Environment Agency before the end of September, report energy use and - from April 2011 - buy allowances for the energy they use. The regulations treat private equity portfolios as conglomerates and aggregate their energy use, so that the fund manager has to behave like a "head office". This seems wrong in principle and misunderstands the private equity business model.

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