Energy-saving measures will save businesses £billions

30th June 2014

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Susan Gregson

Businesses will save billions by implementing energy efficiency measures recommended through the energy savings opportunity scheme (ESOS), according to the Carbon Trust.

Energy savings for large enterprises could be around £300 million by 2016, but the Carbon Trust estimates that savings could be two to three times higher if businesses implement cost-effective measures. The government estimates that the net benefit of the policy to the UK will be around £1.9 billion between 2015 and 2030.

ESOS is the UK government's response to requirements set out in art 8 of the EU Energy Efficiency Directive, which requires all member states to introduce a programme of regular energy audits for large organisations. Over 7,000 businesses across the UK will need to comply with the ESOS requirements, including all those employing at least 250 employees, and/or with an annual turnover exceeding €50 million and a balance sheet exceeding €43 million.

The scheme aims to provide information about an organisation's energy use and identify where cost-effective savings could be made. Decc has published new guidance, which sets out the scope of the scheme, advises on how to conduct an ESOS assessment and provides detailed information on compliance requirements.

Those businesses participating in the scheme must ensure that at least 90% of total energy consumption is subject to an ESOS compliant energy audit or an ISO 50001 certified energy management system. Approved ESOS assessors - either an external consultant or an in-house expert - must complete the audits, which are required every four years.

Participants are not required to implement energy efficiency recommendations identified in the energy audit, but data released by the Carbon Trust suggests that those businesses that implement the measures could generate cost-savings of between15%-25%, with a payback within three years.

All qualifying organisations will have to conduct their first audit and notify the Environment Agency - the scheme administrator - that they have complied with the scheme by 5th December 2015.

The government proposes that, as a part of ESOS, organisations will be allowed to make use of the energy data they have collected under existing arrangements, such as CRC scheme, climate change agreements, the EU emissions trading system and mandatory greenhouse-gas reporting in order to minimise the costs of compliance.

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