How the Energy Saving Opportunity Scheme Will Impact Your Business

Table of Contents

Introduction
Timescale
Who is Captured by ESOS?
    Large Undertakings
    Non UK Companies
    Corporate Groups
What Are the Routes to ESOS?
    The ISO 50001 Route to Compliance
Non ISO50001 Routes to ESOS Compliance
    ESOS Energy Audit
    DEC/Green Deal
Working with Lucideon

Introduction

The EU Energy Efficiency Directive (EED) (2012/27/EU) was implemented on 25^th October 2012, and it includes a series of measures that aim to keep the EU on track to meet its target of reducing key energy consumption by up to 20% by 2020. The EU directive is mandatory for all member states.

One major deliverable mentioned in EED’s Article 8, is that all non-SMEs are required to undertake a compulsory energy audit. In the UK, the Government’s Energy Savings Opportunity Scheme (ESOS) will be able to satisfy Article 8.

Timescale

ESOS will function in four year phases as given below:

The ESOS scheme administrator will act as the Environment Agency (EA), and the Department of Energy and Climate Change (DECC) will act as the regulator. A discretionary fine of £50,000 may be imposed if there is a failure to undertake an ESOS Assessment or comply via an alternative approved route.

Who is Captured by ESOS?

Large Undertakings

The ESOS scheme applies to ‘large undertakings' and not to public bodies that conform to the Public Contracts Regulations.

A large undertaking can be;

• an organisation that employs over 250 people
• an organisation that has a yearly turnover of more than £38,937,777 and balance sheet assets of more than £33,486,489.

Non UK Companies

If a company has energy use in the United Kingdom but does not have a corresponding legal entity, the company are not required to comply with ESOS..

Corporate Groups

The situation for group undertakings is not as simple, and group members can participate together as a group or individually. Most group undertakings, where relevant, are expected to participate together rather than individually.

In these cases, the highest parent company is expected to take the responsibility to complete the assessment. A highest parent of a group is a member whose parent is located overseas or a member without a parent.

If any undertaking within a group wishes to participate separately, they must provide a written agreement.

If any company belongs to a group with at least one ‘large undertaking’ located in the United Kingdom then the entire UK-based group must take part in ESOS, regardless of whether the ESOS scheme is applicable to the company based on individual criteria. The rules regarding group undertakings and parents are detailed yet complicated.

What Are the Routes to ESOS?

ESOS offers numerous routes to compliance:

• Green Deal Assessments
• An accredited ISO 50001 certified Energy Management System
• ESOS-compliant energy audits that must be verified or undertaken by an authorized ESOS Lead Assessor according to an environment agency register that will be available from Autumn 2014. An energy audit must consist of 12 months of verifiable information.
• Display Energy Certificates (DECs)

Whichever route to compliance is chosen, at least 90% of the total energy consumption should be reported. This includes the energy consumed by:

• Industrial processes
• Buildings
• Transport, where fuel is supplied for use by the organisation, including:
  • Fuel supplied for international rail and road journeys. (Fuel consumed in the United Kingdom section must be submitted at a minimum)
  • Fuel supplied for international aviation and shipping journeys that begin or end in the United Kingdom (to be submitted at a minimum)
  • Journeys undertaken in private cars used for ‘grey fleet’ (company business) must be reported. Commuting travels do not come under the scope of ESOS

The ISO 50001 Route to Compliance

An accredited ISO 50001 certified Energy Management System is the primary method for compliance stipulated by the regulator. The basic criteria to set-up, execute, maintain, and enhance an Energy Management System is laid down by the ISO 50001 Energy Management System. The system is based on a continuous improvement plan called the ‘Plan-Do-Check-Act’.

There are no quantitative energy reductions specified in the standard, instead an organisation chooses its own goal. The organisation can then develop an action plan to achieve its targets.

An organisation can implement the ISO 50001 with other existing systems, including ISO 9001 (quality) and ISO 14001 (environmental), or it can be implemented as a stand-alone system.

The various management systems are outlined in Figure 1, it also demonstrates how important the requirements related to energy policy are for organisations that are incorporating ISO 50001 with existing systems.

Figure 1.Different management systems and the importance of energy policy requirements to organisations

For companies that are already working under a management system - such as ISO 14001 and ISO 9001 - a “gap analysis” is the best place to start to decide the optimal path forward, and the resources and time that will be needed to realise compliance before December 2015.

Non ISO50001 Routes to ESOS Compliance

ESOS Energy Audit

An official ESOS assessor - either an external verification body or internal auditor - should conduct or assess an audit. This would involve collecting the data, verifying its veracity, and detecting energy consumption and potential savings over time (Figure 2).

In October 2014, an initial list of organisations approved to hold a register of approved ESOS Energy Assessors was introduced by the Environment Agency.

Figure 2. Schematic from DECC shows the five outline steps involved in an ESOS Energy Audit.

DEC/Green Deal

Green Deal Assessments (GDAs) and Display Energy Certificates (DECs) are measures of a building’s energy performance. There is a clear difference between Energy Performance Certificate (EPC) and DEC; the former is related to the intrinsic energy efficiency of a building and the latter is related to the operational efficiency of a building.

DECs are required for non-domestic buildings that are visited by the public or occupied by a public body.

Green Deal Assessments include both domestic and non-domestic buildings, and highlight the UK Government’s Green Deal scheme to fund energy efficiency measures. Both the Green Deal and DEC are compliance routes for ESOS, if they cover 90% of an organisation’s energy usage.

Working with Lucideon

In 2015 Lucideon celebrated its 30^th anniversary, and the company has been delivering energy and carbon audits since 2001.

The company has performed ISO 50001 certifications since 2012, and in 2014 it was in the first group of UKAS accredited ISO 50001 certification bodies.

Since its commencement in 2012, organisations and companies have observed several benefits from Lucideon’s certified ISO 50001 Energy Management System:

• Competitive edge – enhanced environmental performance, compliance, and productivity
• Strong environmental message – to shareholders, clients, and staff
• Minimized costs – through energy efficiency measures
• Best practice – allows transparency and forms strong energy-related procedures, management systems, and policies
• Reduced risk – reduces potential risk of misreporting and improves energy security

Clients include universities, large energy intensive factories, food producers, multi-site manufacturers, and corporate groups.

This information has been sourced, reviewed and adapted from materials provided by Lucideon CICS.

For more information on this source, please visit Lucideon CICS.