ESOS – a chance to go beyond compliance this time?

ESOS – a chance to go beyond compliance this time?
09 March 2018

ESOS – a chance to go beyond compliance this time?

Why have so few organisations implemented energy saving actions from the first round of ESOS? And what should be their approach this time around? Here, Charles Gaisford and Christine St John Cox explain how through taking a creative approach to ESOS, the compliance activities can be incorporated into a wider strategy to help meet business objectives.

This is an abridged extract of an article first published in the Energy Institute’s Energy-World Magazine. To find out more about Energy World visit https://knowledge.energyinst.org/magazines/energy-world. The Energy Institute has kindly granted permission for Ricardo to host this article on its website and to make it available for non EI members. Click here to download the full article.

We have been monitoring the Energy Savings Opportunity Scheme (ESOS) market since the first cycle and wanted to share some of our observations. For most energy managers, ESOS is a familiar term; another mandatory compliance scheme driven from Article 8 of the European Energy Efficiency Directive that asks a company to audit its energy activities.

The first cycle ended on 5 December 2015 and we are now over the half-way mark to the end of the second cycle, that ends on 5 December 2019. If they haven’t already, your thoughts are likely turning to how to deliver this.

So, what can we learn from the last cycle? First, we must be careful to not be too negative. We learnt that industry could mobilise itself very quickly, and that shouldn’t be undervalued. We were however saddened when we asked many organisations that followed the auditing route what they have done with the energy saving recommendations. Most said very little.

In fact, during a recent webinar  we ran on ESOS, we asked participants to complete a poll on the extent to which they had implemented any measures from the first ESOS cycle. The result was discouraging. Around two-thirds admitted to not implementing any measures and had not seen much value from the reports. Meanwhile around one-third said that they had implemented some measures.

No one attending the webinar said that they had done more than this. What compounds this is that our findings are broadly in line with the Early Impact Evaluation of ESOS report published by the Department for Business, Energy & Industrial Strategy in October 2017.

Drilling down to explore the reasons behind this does shed some light, the detail of which is beyond this short article. Suffice to say, ESOS is very broad in its scope, and ranges from large energy-intensive organisations that already have established energy management programmes through to smaller non-energy intensive organisations where energy use is very minor or not a significant cost consideration, or where there is limited opportunity to implement cost effective energy saving measures.

So, if ESOS didn’t work well for you last time, should it really just be about delivering a quick and cheap compliance notification to the Environment Agency? And, what should you consider now?

Our advice is that, to get your money’s worth from the financial cost, resource and effort that will go into your ESOS reporting, you should use it as a chance to meet your corporate sustainability objectives. While there are certain minimum requirements set out in the ESOS guidance, there is no limitation to the add-ons and extras that you could include in your assessment.

  • What is your long-term decarbonisation strategy? What are the business continuity risks?
  • How is your energy forecasting and have you looked at EV demand?
  • Are you tracking changes in the energy market, pursuing opportunities such as demand side response and battery storage?
  • Have you considered your own renewable energy generation or private wires?
  • What commercial models have you explored?
  • How do your organisation’s policies and targets fit with your objectives?
  • Are you considering electrifying your vehicle fleet, and if so what is your strategy - how are you going to roll out charging points?
  • Is your energy data capture and reporting process adequate, how can it be improved, do you have sufficient metering and sub metering?
  • Do you have adequate engagement with staff?
  • Do you need a detailed analysis carried out on a certain process?

In each of these, ESOS can either be mapped into your wider strategy, or it can be used to take forward a certain element.

Click here to access the full article 

Ricardo offers a full ESOS service including bespoke options. To discuss any of the issues raised in this article, how they impact your business, or how you might tailor your ESOS assessment, contact Christine St John Cox at Christine.StJohnCox@ricardo.com