6.1 Without prejudice to paragraphs 4.5 (Allocated Allowances and Trading) and 7 (Additional Allowances) and subject always to paragraphs 4 (Allocated Allowances and Trading) and 6.5 (Emissions Savings and Excess Emissions), the parties' respective shares of the difference in any Scheme Year between the Verified Emissions and the Emissions Threshold shall be determined in accordance with this paragraph 6 (Emissions Savings and Excess Emissions).
6.2 If the amount of Verified Emissions is less than the amount of Allowances available to the Designated Operator (being either Allocated Allowances or Allowances which the Designated Operator has purchased or arranged to purchase in accordance with the strategy determined under paragraph 4 (Allocated Allowances and Trading)) the disposal by the Designated Operator of Allowances or rights to purchase Allowances that are in excess of the required number shall give rise to an "Emissions Saving Adjustment", equal to one half of the revenue generated by any such disposal.
6.3 If the amount of Verified Emissions is greater than the Emissions Threshold, then to extent that additional Emissions arise by virtue of Energy Consumption exceeding the Annual Energy Target, then, subject to paragraph 6.4 (Emissions Savings and Excess Emissions) below, there shall be an "Excess Emissions Adjustment", being one half of the additional cost of purchasing any additional Allowances required and/or the taking of other measures in accordance with the strategy agreed or determined in accordance with paragraph 4 (Allocated Allowances and Trading) above.
6.4 Notwithstanding paragraphs 6.2 and 6.3 (Emissions Savings and Excess Emissions) above, to the extent that the cost of Allowances which Project Co or other Designated Operator is required to dispose of or purchase as a result of the Verified Emissions varying from the Allocated Allowances by more than the sterling equivalent (determined by reference to exchange rates prevailing at the time) of [XX euros (index linked)]118 per tonne of carbon dioxide emissions, the Board shall bear or take the benefit of the excess.
6.5 Where, pursuant to Clause 17.4 (Thermal and energy efficiency) of this Agreement, it is determined that the Facilities have not, as a consequence of the design and construction of the Facilities by Project Co, satisfied the Board's Construction Requirements in respect of thermal and energy efficiency, and the solution determined pursuant to that Clause is the payment of compensation by Project Co in respect of the additional consumption of Energy which is expected to result, the amount of that payment shall reflect the costs of procuring additional Allowances (or of taking measures to mitigate costs in accordance with the strategy agreed or determined in accordance with paragraph 4 (Allocated Allowances and Trading) above) to the extent that any such costs are caused by virtue of increased Energy Consumption which would not have occurred had the design and construction of the Facilities been in accordance with the Board's Construction Requirements in respect of energy and thermal efficiency. Any adjustment to the Annual Service Payment pursuant to paragraph 5 (Adjustments to Annual Service Payment) above shall be subject to this paragraph 6.5 (Emissions Savings and Excess Emissions).
6.6 If Verified Emissions are identified at any time as more than 13% less than, or more than 13% greater than, the Emissions Threshold, then the variance shall be regarded as extraordinary and deserving of investigation. An independent expert (being an appropriately qualified representative of CIBSE) shall be commissioned at the joint cost of the Board and Project Co with the following remit:
(a) to assess and report on the cause of the variance and assess the responsibility of Project Co and the Board for that element of the emissions which is more than 13% less than, or more than 13% greater than, the Emissions Threshold, and to apportion (as between the Board and Project Co) the appropriate share of costs or revenue arising from such variance being more than 13% less than, or more than 13% greater than, the Emissions Threshold (subject always to paragraphs 4.1 (Allocated Allowances and Trading) and 6.4 (Emissions Savings and Excess Emissions); and
(b) pursuant to such assessment, to adjust the Emissions Baseload (having regard to the principles set out in paragraph 3.1 (Emissions Baseload)) for the year or period in question up to the next Baseload Review Date to the extent he considers the variance arises for reasons beyond Project Co's control.
The Board and Project Co shall be bound by the findings of the independent expert and shall have regard to any additional recommendations that the independent expert may choose to make.
_________________________________________________________________________________
118 Projects will want to take advice on the level of this cap to maximise value for money through optimal risk transfer. Contact PFCU for precedent and resolve prior to ITPD Key Stage Review