CO2b_ESOS

ESOS: Driving forward..

As we reach the extended deadline for large companies within the UK to comply to the Government’s Energy Saving Opportunity Scheme (ESOS), it is a good time to reflect on the main outcomes that were common across many of the reviews we conducted.

Depending on the level of detail, audits can identify savings of between 10-40% and this is certainly the case with the organisations that we have worked with. Running through the audits there were a few themes where the vast majority of organisations could reduce energy consumption, save money and thereby improve the bottom line.

Low-hanging fruit

When visiting any organisation with a large number of employees it is clear that small actions by many will result in a large cumulative energy reduction. An effective employee engagement campaign, tailored to an organisation, is one example of the relatively simple opportunities to drive down energy expenditures. Just by adjusting the heating timer or the layout of an office, coupled benefits of energy saving and employee comfort can be achieved. Typically, zero or low investment opportunities alone could achieve 10% reductions in energy bills.

Transport

Though not the case with all organisations, where the company owns or leases vehicles, transport makes up a significant proportion of their total energy consumption. This presents attractive energy and cost saving opportunities, for example vehicle procurement policies, driver efficiency training and more effective route planning, all achieving dramatic fuel reductions. This came as a surprise, particularly to organisations with an established energy and sustainability management policy, highlighting that across sectors, not enough attention has been paid to decarbonisation of the transport sector.

Management

With this being the first ESOS reference period there was a sense of ‘getting your house in order’ to get an idea of the energy baseline before considering more significant investments. In many cases, responsibility for energy management was limited to supplier account management without considering the organisations’ energy expenditure. The attitude of ‘the cost is the cost’ is almost unique to energy bills and wouldn’t be accepted in any other area of business. Designating one or a few individuals as responsible for understanding, monitoring and managing energy consumption will inevitably lead to achievements in reducing energy demand.

Looking to the future, it is likely that the multiple policies and regulations relating to energy and carbon reduction will be amalgamated in to one energy tax similar to the Climate Change Levy (CCL) and one reporting system that is based on ESOS; many of these policy decisions are expected to be announced in the Spring budget in March. To date, ESOS has highlighted the wealth of energy-saving opportunities but hopefully also raised energy management up the agenda, bringing it to the attention of company boards and directors. With current low prices, now would be an attractive time to act on opportunities to future proof organisations against rising energy costs and more stringent energy policies. Time will tell how the policy landscape might change but CO2balance will continue to work with all of our clients to help manage their energy and make significant cost savings in the process.

Getting ready for ESOS

Some you may be aware of the Government’s new Energy Saving Opportunity Scheme (ESOS), which forces “large undertakings” to audit their energy usages and report them to the Environment Agency.

The concept is that through activity managing your energy usage it will open up your eyes to potential areas of energy savings, which has the “double whammy” of saving money as well as carbon emissions.

ESOS has been created in response the EU Energy Efficiency Directive (2012/27/EU).  In layman’s terms it is an assessment of your energy consumption, so very much like the Greenhouse Gas Audits that we regularly carry out for our clients.

You have to comply if you are a “large undertaking”, meaning that you….

  • employ at least 250 persons; or
  • employ fewer than 250 persons but has an annual turnover in excess of 50 million euro and an annual balance sheet in excess of 43 million euro

You need to submit your data to the Environment Agency by 5th December 2015, but as ever preparation is vital and it is important to start looking at the way you collect and manage your data as soon as possible.

As ever with new schemes such as this there are lots of holes that need to be finalised and definitions to be clarified; we’ll post more articles on the scheme as they are made public, along with more information about how we can support you to ensure that you are fully complaint – if you have any queries in the meantime then please get in touch.