We at ACI Reports
have previously made our clients aware of potentially
significant legislation changes with regard to energy
monitoring and use, the ESOS (Energy Saving Opportunity
Scheme 2015). This piece of legislation is gathering pace
fast, and this short news update follows latest ESOS
developments;
We also provide below a commentary on
potential issues and concerns on implementation, in addition
to our TM44 and EPC work, all of which is starting to become
connected. Green Deal Assessments on commercial buildings
will also affect the enterprises caught by ESOS. We can
undertake Green Deal Assessments for commercial buildings if
required.
At this stage the legislation remains in
consultation and so requirements and implementation are
likely to change prior to formalisation later in 2014, but
ESOS will catch up with Companies fast.
The Energy
Saving Opportunity Scheme (ESOS) launched for consultation
by the Department of Energy and Climate Change (DECC) in
late July 2013, and will catch all businesses with more than
250 employees. It will obligate the Company/Enterprise to
commission an ‘Approved’ assessor either in-house or
externally to carry out comprehensive audits of all their
energy usage, including transport, every four years. At ACI
Reports we have found over many years that the most cost
effective approach is to outsource the data gathering and
report compilation.
The consultation closed on 3
October 2013 and ACI Reports are tracking DECC, who are in
charge of the ESOS legislation, and will update interested
organisations through the ACI Reports news section on their
website.
What is ESOS (the Energy Savings
Opportunity Scheme)
Properties in the
United Kingdom are already subject to a number of
compliance, auditing and inspection requirements covering
issues such as TM44 Air Conditioning Inspections, EPCs,
DECs, F Gas testing, logs and registers. It now appears that
energy will be the next major audit requirement for UK
property owners, although this has been partly dealt with
under GHG legislation.
Over the next 18 months
years, the government will introduce ESOS (Energy Saving
Opportunities Scheme). The Scheme is a compulsory programme
of regular energy audits for 'large enterprises' that are to
be undertaken by 5 December 2015. Following the undertaking
of the audit, companies will then have to assess their
overall position on energy consumption. The requirement
derives from the EU Energy Efficiency Directive that came
into force on 14 th November 2012; this update identifies
the key features of the directive and the government's
proposed light-touch approach to its implementation. This
light touch is gradually changing, as is the earlier EPBD
(European Performance of Building Directive).
The EU Directive (ESOS element – Article 8)
The key requirement under ESOS can be found in Article 8
of the EU Energy Efficiency Directive. In short, EU member
states must introduce independent and cost-effective energy
audits for all 'large enterprises'. An 'enterprise' is
defined as "any entity engaged in economic activity,
irrespective of its legal form". This will extend beyond
companies and include partnerships and unincorporated
associations, among other entities.
'Large
enterprises' are defined as any non-small or medium-sized
enterprise (SME) and is therefore any enterprises that have:
The Public Sector is
not required to participate.
According to DECC, the
audits would cost in the region of £17,000 on average in the
first instance and £10,000 for each subsequent audit, which
will substantially improve the business case for a dedicated
energy manager. Although each audit will result in a set of
energy saving recommendations, the business is not obliged
to follow them up. DECC estimates that ESOS could save each
business an average of £56,400 per year with £17,000 of
investment; whether this the case is yet to be seen.
However the scheme overlaps with other existing energy
efficiency legislation, and places yet more administrative
pressure on energy managers. Of the 7,300 businesses
expected to fall into ESOS, up to 6,000 are set to be
already in the CRC Carbon Reduction Scheme, as well as
mandatory carbon reporting. This potentially means a
“get-out” for those businesses. ACI Reports can advise
further in this.
Proposed implementation of
the EU Directive (ESOS)
The government
considers that the United Kingdom has already made
considerable advances in energy efficiency through a number
of measures, such as the Green Deal (even though it has
largely failed), FITs (Feed In Tariffs), ECO measures, EPCs,
DECs and TM44 Assessments. The government also recognises
that ESOS will have many similarities with a number of
existing UK policies, such as the Carbon Reduction
Commitment (CRC) Energy Efficiency Scheme, climate change
agreements and mandatory greenhouse gas reporting (through
the GHG Regulations and Ozone Regulations).
Therefore, the government is proposing that enterprises be
allowed to make full use of any data from other schemes as
part of their ESOS assessments. Further proposals regarding
the interaction of ESOS with existing UK regulations or best
practice include:
-
excluding from an
ESOS assessment any energy use that is not paid for
directly by the relevant enterprise;
-
allowing
buildings that have valid display energy certificates or
that have undertaken Green Deal assessments within the
past four years to be deemed to have satisfied ESOS
requirements for that building;
-
allowing use of
the data collected in a climate change agreement to
assist in respect of ESOS obligations;
-
deeming a
transport fleet to be compliant with ESOS transport
requirements if it has been subject to a Green Fleet
review within the past four years;
-
allowing
enterprises that are certified to ISO50001 or
ISO14001 (where this meets minimum standards of
the directive) to be deemed ESOS compliant;
-
allowing audits
in 2015, at the discretion of the ESOS administrator, to
be based on other initiatives, such as the Carbon Trust
Standard, and in subsequent years allowing these
initiatives to be certified for their approach as any
other enterprises wishing to conduct ESOS assessments
would be; and
-
allowing
flexibility around the period of time for which energy
data is required, making it easier for enterprises to
use data measurements from other schemes to inform the
ESOS assessment.
The government has
also expressed a wish to interpret the directive in a
practical manner, and has therefore set out that ESOS
assessments must provide, at a minimum:
-
a review of the
total energy use and energy efficiency of an enterprise
as a whole – this would include an energy intensity
ratio (e.g. energy use per employee) and the variation
in energy use over time within key buildings, industrial
operations and transport activities; and
-
clear information
on potential savings that identifies and quantifies
cost-effective energy savings opportunities – this
should, wherever practical, be based on a life cycle
assessment instead of simple payback periods.
The approach above
would appear to differ from a literal reading of the
directive, which appears to require enterprises to create a
full independant energy profile for all key sites, transport
and processes. It is yet to be seen how this all pans out,
but ACI Reports are monitoring progress and will report
directly to any interested enterprise. ACI Reports have
developed their own data gathering “app”, called “SiteSmart”
which is used for much of the necessary information
gathering – interested clients should mail
info@acireports.co.uk
ESOS gears up for
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