With the Energy Savings Opportunity Scheme (ESOS) all but coming to a close, we’ve been looking back on the UK’s recent flagship energy efficiency scheme and asking a simple question. Has it worked?
We have delivered compliance for many organisations and are working with several more to meet the late deadline of 29th January. Our expert engineers have been on the front line delivering compliance so we’ve asked for their opinions alongside those of our clients regarding the successes and pitfalls of the scheme.
Will it make a difference?
ESOS was introduced under the EU Energy Efficiency directive, placing an obligation on members to improve energy efficiency. Like many energy schemes preceding it, ESOS requires large organisations – the largest energy users – to propose feasible measures for improving their energy efficiency.
In this respect, ESOS has been successful – organisations are provided with a platform from which to pursue energy efficiency if they had not done so already. Additionally, the structured approach of the compliance process has allowed organisations to gain a clearer understanding of their energy use. One client stated –
‘The process has allowed us to group together information that was previously spread out across the business. It gave us a good insight into how small changes could impact on the business as a whole and on the costs of relevant departments’
Richard Hopkins, a Senior ESOS Associate at Sustain said –
‘One of the biggest challenges for clients was data capture – very few had details on the energy used for transport, buildings and industrial processes in the same place. ESOS has given them the perfect opportunity to address this and think about using centralised databases – saving them time and money in the long-term’
On the other hand, where ESOS falls short is in driving further action. After a compliance notification has been submitted, there is no further mandate or incentive for businesses to act on those recommendations, and no further action is required until a re-assessment in four years. One client went as far as to describe it a ‘paper pushing exercise’ as they were already implementing their own measures.
And that particular client is not alone! A number of clients feel that the ESOS scheme is presumptive that they have made little to no action to pursue energy efficiency and that the scheme is unhelpful to their situation. Whilst ESOS does provide a standardised way of assessing an organisation’s energy efficiency situation, should it not also compel them to take further action?
By design, ESOS is a ‘soft’ approach, highlighting the opportunity that a structured energy efficiency programme permits. Only time will tell whether it will prove successful in the UK, or indeed if additional amendments need to be brought into place to ‘toughen up’ on businesses who choose not to act.
A burden or opportunity?
It’s safe to say that the uptake on ESOS was slow. If not for a surge of late compliance submissions in December, many organisations would have missed the boat. But why? The potential benefits for undertaking a successful ESOS programme are significant – estimates indicate savings of 13 times the cost of compliance if recommendations are followed through. Many of our clients mentioned the difficulties of the compliance process – primarily with regards to data collection – but this does not negate the savings that can be realised if ESOS recommendations are acted upon.
And herein lies the issue – the operative ‘if’. With no obligation for businesses to conduct that next vital step, the opportunity – whether businesses see it as so or not – simply passes by in favour of ‘business as usual’. And who can blame them? On the part of government, the level of information as to why the scheme was an ‘opportunity’ was relatively low and, well, businesses have businesses to run.
We also asked our clients about the most significant issues to implementing the recommendations. Among those mentioned were ‘cost’, ‘time constraints’ and ‘management support’. If these next steps for pursuing energy efficiency were prioritised in the legislation and in additional documentation, then would the ESOS opportunity have been more readily taken up?
What lies ahead for businesses?
The recent consultation on ‘Reforming the business energy efficiency tax landscape’ may spell major changes for energy efficiency legislation. Nevertheless, one thing is clear – ESOS, or a similar scheme, will remain. Businesses can expect to be subject to energy efficiency regulations for the foreseeable future and more pressure, not to mention taxation, will be put on businesses to embed energy efficiency into their operations.
Whether this fits into your business model or not, it is unlikely to go away. Organisations that act sooner will be rewarded in the long run, so it is becoming more and more important to become energy efficient. Our advice? Act sooner rather than later to improve your business’s energy efficiency. We promise you’ll like the results.