ESOS reform essential to ensure long-term benefits: EEF

12th December 2016


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  • Management/saving ,
  • Business & Industry

Author

Rosiecox

The energy savings opportunity scheme (ESOS) should be reviewed ahead of the 2019 compliance deadline, manufacturers' body EEF believes.

More than half (58%) of manufacturers participating in ESOS felt the scheme repeated activity they already carried out, a survey by EEF found, while only one-third said it had provided them with new information.

The energy audit required by ESOS is relatively basic, so it is likely that the organisations that gained the most from the scheme were those that had previously paid little attention to energy efficiency, a report by EEF notes. Just 13% of respondents said that ESOS findings had helped them develop a business case for investment in energy efficiency.

In its current form, the scheme may have limited long-term potential to drive investment, concludes the report. It says the number of firms that will find the audits genuinely informative is unlikely to increase greatly by the next round of the scheme in 2019, by which time it is likely that the numbers finding it genuinely informative will have diminished, it concluded.

EEF analysed the conclusions of the energy efficiency audit reports conducted at manufacturing sites covered by ESOS and estimates that the average site could reduce its annual electricity consumption by 18%, with 4% of the savings from measures that cost nothing or very little. Two-thirds of the sites audited either did not have an energy management policy or could improve their existing one. Eighty per cent of all sites were recommended a measure in relation to metering, monitoring and targeting, ranging from simple improvements to existing regimes through to the installation of sub-metering and implementation of automated monitoring and targeting systems.

More than three-quarters (78%) were advised to implement energy awareness programmes for staff, including shutdown procedures for equipment not being used. Almost two-thirds (60%) of sites did not have shutdown procedures, but by implementing firms could save an average of 3% on their annual electricity bills.

Other low-cost recommendations common in ESOS audit reports included:

  • Lighting upgrades or controls were recommended at 90% of sites audited, with a potential average energy saving of 7%.
  • Improvements and upgrades to compressed air systems were recommended at 73%, saving more than 4% of electricity consumption.
  • Building energy management systems and heating, ventilation and air conditioning improvements were recommended at 85% of sites, saving an estimated 2%.

There is significant variation in the remaining energy efficiency potential in different sectors, EEF said. Using sector-specific data from the Climate Change Agreements (CCA) scheme, it calculated that the manufacturing sector as a whole could achieve a 14% reduction in electricity consumption, equal to 4% of the UK’s entire electricity consumption.

The estimate is conservative as it includes only cost-effective solutions widely applicable to all manufacturing sites. There is further potential from sector-specific technology and measures requiring longer-payback periods, it said.

EEF found that just 9% of companies take part in some form of demand-side response (DSR) activity, which entails altering consumption patterns to save money and earn revenue. The main reason for low-take up was the complexity of DSR schemes, which some respondents described as ‘vast, complex and often bewildering’.

The government should develop a fully-fledged DSR scheme, building on the lessons learned from the two pilot schemes and experience from the US, EEF said.

Liam McDonagh, director at CMR Consultants, which worked with EEF on the report, said: ‘The report highlights that optimising the supply of and demand for electricity should be a function of flexible and balanced electricity generation and storage, electricity efficiency and demand side management, bound together with an effective policy framework and appropriate incentives.’

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