Mandatory energy audits to save firms £1.9bn

11th July 2013

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  • Management/saving



Forcing large companies to assess their energy efficiency will save £1.9 billion over 15 years, says Decc in a consultation outlining a scheme due to launch in 2015

To meet the requirements of the EU’s Energy Efficiency Directive (2012/27/EU), all large companies – those with more than 250 employees and an annual turnover exceeding €50 million – will have to complete an assessment of their energy consumption every four years.

The assessment, the first of which must be completed by December 2015, must be completed by an “approved assessor” and produce a list of “cost-effective efficiency measures” that the firm can implement.

According to Decc, if companies implement just 6% of the measures identified by the assessments they will save a cumulative £1.9 billion over 2015-2030. And, if uptake is greater the savings could be as high as £3 billion.

The energy department is proposing a mandatory energy savings opportunity scheme (ESOS) to meet the requirements of the Directive. Under the ESOS companies will be required to report an energy intensity ratio (such as energy use per unit of production), which will be used to measure improvement.

In a bid to reduce the cost of complying with the scheme, firms will be able to use energy data collected for other regulated programmes, such as the carbon reduction commitment energy efficiency scheme and the EU emissions trading scheme. Decc also confirms that the ESOS will not apply to public organisations or to corporate groups where every UK company is an SME.

In its consultation, the energy department asks for views on the possibility of companies being able to exclude certain buildings or processes from audits provided that, when added together, these total no more than a small percentage of overall energy spend.

Decc is also seeking feedback on whether firms that have certified ISO 50001 or ISO 14001 management systems should be classed as ESOS compliant, and whether the scheme should be managed by the Environment Agency, the National Measurement Office or Trading Standards.

The consultation, which closes on 3 October 2013, sets out proposals for transitional arrangements for the first audits in 2015. Decc acknowledges that firms that have achieved the Carbon Trust standard, for example, may have already met the Directive’s requirements with regards to energy audits. However, the document confirms that, post-2015, all assessments will have to be undertaken by approved assessors to ensure a “consistent standard of advice”.

Decc also outlines two potential options for how to approve ESOS assessors. One would see assessors certified to conduct ESOS assessments by UKAS-approved certification bodies. The alternative option would require the scheme’s administrator to approve registers of assessors held by professional bodies, such as IEMA.

In launching the consultation, energy secretary Ed Davey said: “Our proposals aim to provide for a proportionate and better regulation approach, with the objective of yielding net benefits for the UK as a result of additional energy saving.”

The government has until 5 June 2014 to transpose the requirements of the Energy Efficiency Directive into UK law. Davey confirmed that it aims to have legislation published in spring 2014.

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