A new future for energy audits?

energyTEAM, Energy Savings Opportunity Scheme, ESOS, energy audit
The potential value of energy audits — Brian Rickerby.

With energy audits for large companies now having to be signed off at board level, Brian Rickerby of energyTEAM sees a major opportunity for detailed, comprehensive and fully costed energy-saving recommendations.

The new ESOS (Energy Savings Opportunity Scheme) ESOS), which is estimated to affect more than 7000 larger firms, has arrived. The first reports are 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 energyTEAM’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 an 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 ISO 50001 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 (Display Energy Certificate) 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 of 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 under-standing of your organisation’s structure, processes and associated energy use. Note that ESOS covers all electricity, gas and fuel oil used — including transport.

A detailed energy audit then needs to be prepared and verified by a lead assessor who 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 the 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. So, with a decent ESOS audit, the board will know what measures it can take. That’s why we firmly believe that these recommendations should be detailed, comprehensive and where feasible, fully costed. Otherwise 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 £1.7 billion 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 energyTEAM’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.

Brian Rickerby, is joint managing director with energyTEAM.

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