Getting our ESOS ‘ducks in a circle’ and moving to second order energy efficiency

Getting our ESOS ‘ducks in a circle’ and moving to second order energy efficiency
25 June 2018

Getting our ESOS ‘ducks in a circle’ and moving to second order energy efficiency

ESOS is coming around again (yes, 4 years are up on 5 December 2019) and unless your organisation has not met the qualification criteria for two consecutive periods you will be required to comply again.

That is likely to mean more energy audits and repeating the same compliance activity, just like four years ago. But are you really getting value for the cash you are spending to comply?

The recent BEIS evaluation of ESOS showed that very few businesses have implemented their energy saving recommendations. This suggests that a lot of companies are not getting a return on investment from ESOS.

Anecdotally, many of the energy managers we’ve spoken with say they were disappointed with the outcomes of a ‘compliance only’ approach to phase 1.We think that this is a huge missed opportunity. We'll be discussing this and how to get the most out of phase 2of ESOS in our complimentary webinar on the 4 July.  

ESOS phase 2 webinar

ESOS has the potential to deliver good value for a business, both in terms of energy savings and in strategic planning for the future. But to achieve this we need to start thinking differently on two levels.

Level 1 – Technology moves on

  • We can expect technology to advance more rapidly. Four years ago, we weren’t seriously considering fleet electrification, demand side management, smart technology, block chain or the internet of things and artificial intelligence for energy management. Phase 3 of ESOS may well see these being business as usual or even old hat!
  • New technology that wasn’t cost effective last time may well be cost effective now; the classic example is LED lighting, the cost was astronomical and the business case was tenuous. That, however is no longer the case. Investing in LEDs can now deliver paybacks of sub 2 years depending on the route taken. Similarly, heat pump technologies are becoming more widespread, and demand side management and battery storage are terms that are increasingly familiar.
  • So, measures disregarded 4 years ago should be reconsidered.

Level 2 – Second order energy efficiency

The second point is about the type of audits that can be undertaken. The regulations say the following:

“The energy audit must, so far as reasonably practicable:

  • analyse your organisation’s energy consumption and energy efficiency
  • identify any way in which you can improve your organisation’s energy efficiency
  • recommend practical and cost-effective energy saving measures for your organisation
  • identify the estimated costs and benefits of any energy saving opportunity.”

So, let’s think about what you can do that meet those criteria in way that doesn’t just offer you the same output as the previous cycle.

You need to look for ways in which you can improve energy efficiency; you may have already covered all the traditional ways to do this and so there is unlikely to be any value through the “standard lighting replacement” recommendations if those measures have already been captured and done.

So, let’s dig a bit deeper. On the back of the evolving changes in the energy supply market, and the introduction of new technologies, we are increasingly seeing the need for a joined up approach, to consider site wide or building wide strategies that cover all the services and which look at the supply and energy generation demands at the same time. As well as covering energy efficiency to capture those last few no or low-cost measures we recommend interlinking energy supply and demand, allowing for optimum overall efficiency to be achieved.

Looking at it another way, in the past measures were identified in a ‘siloed’ manner (upgrade the lighting, improve the lighting controls etc.) and X number of savings were attributed to each; where they overlapped, the savings available would be reduced to ‘avoid duplication’. Upstream and downstream opportunities and impacts were not always considered and energy was still being lost ‘in the system’.

Now however we are looking at a higher level, in the round; it is the sum of the total that provides us with the savings, looking at energy flows, optimising the supply, matching with the demand and recirculating wherever possible.

We are working with customers thinking about site wide management for supply and demand. Considering security of supply and management of demand balancing, or as we call it second order efficiency.

Second order energy efficiency for ESOS

Figure 1: Looking at energy flows, optimising the supply, matching with the demand and recirculating wherever possible; what we call second order efficieny 

Our work with customers, through ESOS and other support is focused on bringing that efficiency both in design and in operation.

To discuss how your business can achieve second order energy efficiency and get the most from the next round of ESOS contact our sustainable business team or join us on the 4 July for our upcoming webinar, 'Doing ESOS better: getting more value from phase 2'