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ESOS - Take the easiest route to compliance

With energy audits for large companies now having to be signed off at board level, national energy consultancy _energy_TEAM, see a major opportunity for detailed, comprehensive and fully costed energy-saving recommendations.

The new ESOS mandatory energy auditing scheme, which is estimated to affect more than 7,000 larger firms, has arrived with the first reports due at the end of 2015. ESOS has the laudable aim of helping the EU meet its target of reducing energy consumption by 20% by 2020 – but will we see businesses buy in to this new scheme?

Realistically, and in some ways understandably, many organisations will not be considering any of the potential benefits of the scheme. Instead, they will be thinking: “How do I comply with this legislation as cheaply and expediently as possible?”

This may sound cynical, but the scheme is designed to force organisations to identify how they could save energy. There is nothing in the legislation forcing them to implement any cost-saving measures, which I believe is a fundamental flaw in the legislation. However, the scheme is here and _energy_TEAM’s approach will be to help organisations comply, where possible utilising other existing schemes or collated data that may or may not already be in place within your organisation.

For example, a growing number of organisations are being asked to demonstrate their energy reduction credentials by their customers and/or stakeholders. Gaining the ISO50001 energy management standard has been confirmed as an alternative route to compliance of ESOS, therefore obtaining this accreditation could ‘kill two birds with one stone’.

Equally, data gathered for existing schemes such as the CRC Energy Efficiency Scheme (CRC) can be used, at least in part, for the purposes of determining total energy consumption as part of an ESOS Assessment. Submitting a DEC for certain buildings could prove a more cost effective route to compliance on a particular building – so why not use what is available to you?

There may also be areas energy consumption that are difficult to quantify but could be excluded under what is called the ‘De Minimus’ rule, as once you have determined your total energy consumption, you are only required to audit assets and activities that amount to 90% of this (your areas of significant energy consumption).

I would stress however, that what may seem to be taking shortcuts should not be a route to a second-class report.

The first step therefore would be to complete a scoping and data study to determine what is in place, what needs to be collected, and the most expedient way to extract/collate all the relevant data. You will need a comprehensive understanding of your organisation’s structure, processes and associated energy use. NB ESOS covers all electricity, gas and fuel oil used including transport.

A detailed energy audit will then need to be prepared and verified by a Lead Assessor that is certified by an approved accreditation body, yet to be confirmed by the Environment Agency. Lead Assessors must also review your ESOS Assessment as a whole. The ESOS guidance states clearly that complying with the scheme should involve identifying specific and cost-effective energy saving measures.

A key point about the scheme is that audit has to be signed off at board level before being submitted - there is no place to hide. ESOS sets minimum requirements for compliant ESOS Energy Audits such as BS EN 16247 Energy Audits. However, with a decent ESOS audit, the board will KNOW what measures it can take and will have to have a good reason to do so. We firmly believe that these recommendations should be detailed, comprehensive and where feasible, fully costed, or they will almost certainly not be acted on – and that will be an opportunity lost.

Directors need to know how much any initiative will cost, how much it will save and what the payback timescales are. If they can see the estimated costs and benefits of all the actions recommended, they can make informed choices about what to implement in which budget cycle, and it is more likely that they will actually commit to the changes suggested.

Putting cynicism to one side, if, as predicted by the government, the scheme leads to £1.7bn net benefits to the UK, it will no doubt be welcomed with hindsight. For now, however, the overwhelming feedback we get from businesses is that after waiting for clarification on how the scheme will work for so long, many now see it as just more red tape.

In truth, I have been as sceptical as the next man about ESOS, because I feared that all it will generate is more reports gathering dust on the shelf. However, the scheme has arrived and _energy_TEAM’s approach now is to raise awareness of what needs to be done to comply with ESOS, utilising whatever data and expedient measures are available but without losing sight of what makes for a quality audit.

The real target audience for an audit is the board, not a government department.

_energy_TEAM offers a smart two stage process to organisation’s address ESOS compliance and where possible benefit from the scheme. Find out more at www.energyteam.co.uk

This was posted in Bdaily's Members' News section by Energy Team (UK) Limited .