The launch of the ESOS programme on the 17th July was met with a measure of confusion, frustration and optimism: as has been standard with any newly introduced government measure for the last 10 years or so. With the bad taste of the costly CRC (Carbon Reduction Commitment) programme still stuck firmly in the throat of non-SME companies, bringing yet another energy reduction scheme to an already over-burdened sector was naturally going to be met with scepticism and frantic budget reviews. Fortunately government may have actually got it right this time.
The key of this scheme is the ‘O’ in the acronym ‘ESOS’ – no longer is this an Obligation or an Order, it’s an Opportunity, and it should be viewed as such.
ESOS requires large UK companies to undertake energy audits on >90% of their interests on a four-yearly basis, and to declare their main areas for usage of energy (fuel for transport, buildings etc.). The audits are a detailed recommendation of where and how to save energy and money. These come with the added benefit that by reducing outgoings on energy bills, companies will become more competitive in their market areas and the UK will take another giant stride towards hitting CO2 emission reduction targets. Regardless of this scheme, it’s good business sense to undertake energy audits on a regular occasion; countless GWh’s are wasted year-on-year through inefficient plant, poorly insulated heating systems and properties, bad employee practice, redundant timing controls and light fittings to name but a few. Even if you’re an SME and not obliged to carry out audits, it’s advisable to review your energy use regularly.
ESOS lets you remain in control.
The fact that the ESOS programme doesn’t insist that you undertake the recommended measures from the audits is actually quite liberating: to have the choice of simply ignoring the recommendations or to pick-and-choose the most cost effective measures at leisure or to carry out wholesale all the advisories places you firmly in control. It means you’re able to run your budget accordingly – and you won’t be hit with a huge CRC-style bill at the end of the financial year that you or your chosen partner may have wildly under- or over-estimated.
There ARE costs involved as you’d expect. Professional energy audits are incredibly thorough and don’t come cheap – government estimates put the cost of phase one compliance at somewhere around £21,000 (bear in mind the target sector of companies with a turnover of >€50m), but subsequent periods are expected to be noticeably cheaper. This will pale into insignificance if recommendations are followed though, with estimates indicating savings of 13 times this outlay being identified, adding further incentive to take the scheme seriously.
There are certain ‘shortcuts’ out there, and they will undoubtedly be taken by some, but the fact is you now have a tangible, professional audit in your hand telling you how and where you can save x amount of thousands of £s just by upgrading your lighting system, or by lagging your pipework or– of all things – by educating staff to switch off lights when not in use! To not take advantage of the recommendations would render it a pointless cost to the company just as a way of “ticking a box”: much better to tick that box AND save money, surely?
Get rolling before it’s too late.
For many years, the ethos of Sustain has been “Analyse, Advise, Apply and Advance” – it’s no coincidence that ESOS fits in perfectly around this. There’s no downside to ESOS, especially if you outsource the legwork – use the opportunity wisely and there will be clear and significant benefits to the company that are not just financial. In fact, the only danger would come by doing a hap-hazard job and missing deadlines or declaring false / inaccurate information; this can see you hit with a fine up to £50,000…. enough incentive to get into gear and start becoming compliant, I’d say.