After the relative success of ESOS Phase 1, it feels like Phase 2 has come round very quickly.
For those who’ve not been involved before, the Energy Savings Opportunity Scheme was set up to ensure large private companies contribute to UK energy reduction targets. The official Government estimate is that it could save UK business around £1.6bn, but since that’s the ‘net’ figure for the period right up to 2030, perhaps the sum is not as ambitious as it first appears.
ESOS is a mandatory energy assessment scheme, and eligible organisations must prove they’ve thoroughly assessed their energy use and identified where any energy-savings improvements can be made.
And ‘mandatory’ is a key factor. Private sector companies that meet the criteria have no choice over whether to participate. But there are important choices to be made over the selection of expert partners, the way the process is seen and handled by senior management, and the value attached to the outcomes.
It may seem like there’s no rush. The final deadline is nearly two years away. But when you consider the complexity of the process, the extent of the information gathering and analysis, and the potential shortage of genuinely experienced Lead Assessors, the schedule for the second round of assessments leaves no time to waste.
As nearly 10,000 organisations up and down the UK are starting to realise, it’s time to put their energy efficiency house in order.
Significant cost savings
SSE Enterprise Energy Solutions is at the heart of SSE’s ESOS offering. We specialise in energy auditing, and it’s our remit to help customers with ESOS compliance.
The main requirement of ESOS is to investigate the company’s energy use in far more detail than most businesses routinely undertake. That’s something we’re used to doing week in and week out, and for existing customers ESOS can be a logical extension of services we already provide.
ESOS is also about identifying energy efficiency measures that result in significant energy cost savings. Once the audits are complete and the company has notified the Environment Agency of its ESOS compliance, it can then go on to implement the recommendations. That’s the theory, but all too often ESOS stops with the completion of the evidence pack.
Since not all ESOS services are created equal, it’s important to choose your provider carefully. Although the qualification process is tightly controlled, the barrier to entry is relatively low. This has attracted a swathe of new providers who focus on the bare bones of compliance, and may not have the wider capabilities to follow through.
For some companies this may seem like an ideal arrangement. If you see ESOS as a box-ticking exercise, then as long as your Lead Assessor is qualified and competent, your only other concern is the cost.
But ESOS is a real opportunity to achieve lasting benefits for your company. To put it another way, disregarding the energy saving potential of a mandatory assessment is simply wasting energy and resources by other means.
Get in early
The Phase 2 final deadline is 5 December 2019 - but you don't have to wait until then to comply and start saving.
You can start working on your energy audits now. And the qualification date of 31 December 2018 means you'll be able to begin collecting the data for your total energy consumption at the start of 2018.
So by the beginning of 2019 you could submit your ESOS assessment and be ahead of the game to benefit from the opportunities identified.
Starting the process in plenty of time can:
- Help with planning your energy audit
- Minimise disruption
- Bring forward energy savings
- Potentially reduce costs
Even if you’re not quite ready to take the next step, it’s crucial to identify your ESOS Lead Assessor without delay. Choosing an inexperienced assessor or a less comprehensive service increases the risk of an enforcement notice, and not receiving the best available strategic energy advice. The experience of Phase 1 also suggests that many providers will dramatically increase prices as the deadline draws closer.
What about Brexit?
We’re often asked if Brexit is likely to affect ESOS and whether it will be around in ten years’ time. The straight answer is no-one can be sure, but given the UK Government’s track record in exceeding EU requirements – the Carbon Floor is a good example – we can expect ESOS to continue in one form or another.
Another frequent question is ‘will we cover our costs’. That depends on your current energy efficiency, and your willingness to invest time and money implementing the recommendations in the report.
The other side of the ESOS coin is buying your energy at the right price in the first place, because controlling your energy costs also depends on the suitability of your contract, the accuracy of monitoring and controls, and your ability to ‘load shift’ consumption to less expensive time bands. If you’ve not had a recent review of your overall energy strategy, your ESOS assessor will be happy to refer you on to the appropriate SSE Business Energy teams.
Download our ESOS brochure to find out more and start saving.