Over 6,000 organisations have now completed the Energy Savings Opportunities Scheme (ESOS) process and a small number of businesses are on track to meet the regulations by completing the ISO 50001 energy management certification by the later deadline of 30th June 2016. There are however still a significant number of companies caught by the regulations that have not complied and that face potential fines of tens of thousands of pounds alongside reputational harm. For those businesses that now have the luxury of three years until the next ESOS deadline, the question for many is what to do next.
Larger companies should consider implementing ISO 50001 now as this is not a simple standard to achieve – it takes time, money and dedicated resource. It does however provide automatic compliance with ESOS and involves embedding an energy management system that meets international best practice within the business. This is a very sensible investment that will ensure that energy is well managed on an ongoing basis.
Those companies that are or will be certified to ISO 50001 – the international standard for energy management systems – are in a position whereby they will be actively working towards the continual improvement of energy performance to maintain the accreditation. However, organisations that chose to comply with ESOS via the standard energy audit route will have an audit report and a list of energy saving opportunities that will not guarantee to improve energy performance at all.
For many of the smaller organisations, complying with the regulations will have involved a relatively steep learning curve, particularly for those that did not have a clear understanding of their energy use previously. The experience should have identified a valuable list of cost-effective energy saving opportunities, which if implemented, can provide some very significant reductions in overheads. In order to extract that value, it is important that companies act now to harness the momentum generated by compliance, putting plans in place to realise cost savings with immediate effect however this may not be straightforward.
Securing board level commitment is a key requirement for any management system. Once the energy audit has identified how an organisation uses energy and areas of inefficiency, this should be easier to achieve. However, there are a number of reasons projects may falter at the implementation stage, for example audit recommendations may need to be converted to a clear business case which may require further investigations and there may also be issues around financing projects.
Government analysis suggests that, if only 5% of the identified energy efficiency opportunities were implemented by the businesses that complied with ESOS, this could collective achieve annual savings of over £250 million. Whilst 5% may seem a very low estimation for the actual implementation rate, the message that there are significant savings to be made is clear. The cost of compliance was significant for all participants and, if the intention behind the ESOS regulations is to be realised, companies should seek to recover the cost of compliance by implementing measures that will guarantee return on investment. To demonstrate the performance of the energy savings measures, must be implemented.
The next ESOS compliance deadline is 5th December 2019 which may seem like a long time off but it will soon come around. Businesses that implement the measures identified now and put in place an effective targeting and monitoring programme will see a greater return on their investment in compliance and ensure that they are better prepared for the next compliance deadline. If you would like assistance with this, please complete the contact form or email the compliance team at compliance@carbon2018.com. To discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.