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Embracing ESOS

Sep 2016 Electric Vehicles, Energy Efficiency | Comments Off on Embracing ESOS
Embracing ESOS

Newey & Eyre marketing manager Caren Munro explains the benefits of going beyond ESOS compliance

As we all know, large UK businesses are now affected by the Energy Savings Opportunity Scheme (more commonly known as ESOS) regulations. While for some this may simply appear as just another piece of ‘green tape’ to comply with, the reality is that ESOS offers a huge opportunity to reduce energy use and cost accordingly.

ESOS, the UK’s response to Article 8 of the European Commission’s Energy Efficiency Directive, is the Government’s newest energy saving initiative introduced in response to the EU’s Energy Efficiency Directive.

In short, it means that all ‘large enterprises’ must now undertake a programme of energy audits in a bid to drive awareness of opportunities to reduce energy use and to cut consumption, emissions and cost accordingly. This includes those with either 250 employees or a turnover in excess of €50m (around £39.5m) and a balance sheet exceeding €43m – comprising around 10,000 UK organisations.

Last December (2015) constituted the first compliance phase, with participants subsequently required to produce detailed reports on their energy use every four years. And the good news is that, according to latest figures, more than 70% of businesses are on the road to being ESOS compliant.

However, while ESOS has been a fantastic tool in raising awareness of energy efficient measures for commercial building owners, in reality, it shouldn’t end with compliance.

Audit will pay for itself

The ethos behind the scheme is that reducing your energy consumption goes hand in hand with saving money, so that the costs of the ESOS audit itself are more than paid back, if energy saving measures are implemented.

At Newey & Eyre, part of Rexel UK, for example, we elected to comply through the ISO 50001 certification route but, even though we are now compliant, we haven’t stopped there. In fact, our head office expansion at Eagle Court in Birmingham illustrates our commitment to continuous improvement in driving greater energy efficiency, incorporating lighting and building controls that will help us achieve significant savings.

In this way, business owners must use the scheme as a mechanism to drive energy efficiency changes from within the core of their organisation; from engaging with employees about the savings to be had to spark behaviour change through to really understanding building energy consumption through monitoring.

And while corporate social responsibility (CSR) may be seen more as a ‘nice to have’ for many large organisations, research by the European School of Management and Technology (ESMT) has shown that annual stock prices react positively to changes in CSR performance – including the demonstration of energy awareness – indicating a direct link between market share and CSR activity.

As we see it, ESOS is a great opportunity for installers to take on the role of the energy advisor, helping to educate customers about the benefits of demonstrating energy awareness beyond compliance of legislative drivers, such as ESOS.

Encourage your customers

In terms of what to recommend, there is a whole breadth of measures businesses can adopt to improve the efficiency of their organisations, such as lighting upgrades, electric vehicle charging points, building controls, voltage optimisation and energy monitoring systems – the list is endless.

With lighting accounting for up to 40% of a business’s energy bill, LED lighting for example is a lucrative opportunity enabling users to further reduce energy consumption. In addition, lighting controls can eliminate an estimated 60% or more of the wasted lighting energy in buildings, while at the same time enhancing comfort and productivity.

Another good example can be found by looking at the UK’s growing electric vehicle (EV) presence. On average, the Energy Saving Trust estimates that a full charge will cost around £2 to £3 and give a typical range of 100 miles. Driving 100 miles in a petrol or diesel car will cost around £12 to £18 in fuel – equating to six times the cost of an electric car. The cost saving potential for companies with a large fleet of vehicles is huge.

More than a legal responsibility

Furthermore, on the commercial front, EVs have the benefit of zero rate company car tax and exemption from road tax. They also avoid the London Congestion Charge and can benefit from free parking in many pay-and-display car parks, along with a reduction in insurance and maintenance costs. And these are just a couple of easy ways businesses can cut costs through their energy-based assets.

Although there are no statutory requirements to take action on the energy saving opportunities identified by ESOS, failure to do so misses the point entirely. Our recommendation is for installers to take the lead in encouraging businesses to fully embrace ESOS; seeing it as much more than just a legal responsibility but a way to make major cost savings, improve their CSR credentials and future-proof against energy price hikes.