As ESOS Phase 2 begins, Energys Group looks at the scheme’s next iteration, and its success to date

From Jan 1 2018, firms can get to work on auditing their energy usage for ESOS Phase 2. But what has the legacy of Phase 1 been? Has anything changed? And how many companies realise they should actually make the recommendations ESOS provides on energy efficiency?

ESOS Phase 1: the legacy

ESOS is the Government’s corporate energy efficiency scheme. It forces private sector firms above a certain size to audit their energy usage on a four-yearly basis, and provide recommendations on how they could improve energy efficiency.

Overall, Phase 1 of the scheme was not without its challenges. For a start, The Carbon Trust advises that around 2,800 organisations had to tell the Environment Agency, the scheme’s regulator, that they would be late in reporting compliance, and a number were ultimately fined.

Further, of the energy audits conducted for Phase 1, just 16% of participants were fully compliant. Three-quarters of audited participants needed to undertake remedial actions in order to become compliant.

That may not be a fault of ESOS though, in fact, it may simply prove the scheme is doing good, as some companies had to change their energy reporting in order to make the grade.

Firms which tried to duck under the radar were relatively limited; 500 organisations qualified for ESOS in the first phase but did not engage with the scheme. This has resulted in over 300 enforcement notifications sent out to date.

Perhaps most interesting is whether firms are actually making the energy efficiency improvements recommended in reports.

The sense is that many firms took a tick-box approach; to date, those who’ve fully embraced the energy recommendations, installing new efficiency equipment and hence reaping the rewards, have been rather limited.

Which brings us onto the next point, has anything changed for Phase 2?

ESOS Phase 2: has anything been altered?

Save the new compliance dates, and a few minutiae in the ESOS texts, absolutely nothing has changed in the ESOS rules for Phase 2.

For many, this is a disappointment; there were calls for more steps to make acting upon the energy efficiency opportunities derived from ESOS audits mandatory.

But for now, firms must only report on their energy usage; not improve upon it. Stating the obvious, firms must document their energy usage once again in Phase 2; compliance for Phase 1 won’t cut the mustard.

However, the Government is still analysing and consulting on changes to a new overall Carbon Reporting Framework.

There is every possibility that ESOS will be extended into another, future phase, replacing all other corporate reporting elements, and potentially making firms act upon the energy efficiency opportunities.

So what should firms do about ESOS Phase 2?

First and foremost, comply. The requirements are 12 months of energy data, estate wide, across electricity, fuels, transport, buildings, plant and process.

The 12 months of data must include the compliance date of 31 December 2018, so firms can start now.

There are good reasons to do so. Last time round there was a real bottleneck; external auditors were overloaded and hiked prices at the last minute pre-deadline.

Further, if firms want to report on ESOS using internal staff, they need time to do the work. And firms who want to report through ISO 50001, and aren’t yet certified to that standard, need to realise it takes time to get there.

Most importantly, the sooner UK PLC acts on ESOS Phase 2, the more rapidly we can hasten our transition to lower carbon and more profitable business.

The Carbon Trust estimates that from Phase 1 energy-saving opportunity assessments, making cost-effective improvements could usually cut energy costs in buildings, transport fleets and industrial processes by about 20%, on a typical spend of £1.8 million.

This translates into average annual savings of £360,000, with far more being possible in certain industry sectors.

That’s big money; and here at Energys Group we’re on hand to help with any energy-efficiency requirements you would like to make when your reporting is done.

If you’re in any doubt, drop us a line to check whether your firm is affected by ESOS.

If you meet the following criteria, the chances are you must comply, and we can assist.

a) You employ at least 250 people.
b) You have an annual turnover in excess of €50 million and a balance sheet in excess of €43 million.
c) Remember, most public sector bodies are excluded, but other organisations that receive some public funding, such as universities, may qualify.

We hope you enjoyed this article? See more of energy policy articles here. Please drop us a line if you’d like to chat about any of the issues and themes covered or to find out more about our energy saving technologies.

Additional Salix interest-free finance available for FE Colleges

Leading low carbon retrofit company, Energys Group, is urging Further Education colleges in England to take advantage of additional funds for investment in energy-efficiency upgrades, available from Salix Finance. The fast-approaching deadline for applications for the extended funding is the end of February 2018.

Energy-saving projects

A broad range of over 100 energy-saving upgrades is covered by this round of Salix funding, and can support programmes of work that may span multiple years. Since its launch in 2014, the programme has funded energy-efficiency projects in over 50 FE colleges, resulting in estimated annual savings of over £1.6m.

Applying for the fund

Information about how to apply for the new FE College funding is available on the Salix website. We have also produced a step-by-step guide which outlines how to complete a Salix loan application. The guide contains information on the applications process and how to meet the project criteria.

“Retrofit technologies, such as LED lighting, T5 lighting upgrades and boiler optimisation technologies represent energy-saving quick wins for many FE colleges,” advises Kevin Cox, Managing Director of Energys Group.

“Salix funding provides a great opportunity for colleges to invest in these technologies without the usual financial risk.

“Anyone who needs more information in order to understand the process of applying for an interest-free loan through Salix should consider turning to a specialist organisation such as Energys for advice,” says Kevin Cox.

“There are only a few weeks left until the deadline for this round of funding and colleges will need to have all their energy data on hand to produce a quality application.”

For help and advice on how to take advantage of Salix finance for retrofit energy-saving upgrades, contact Energys Group today.

The Energys Group January 2018 horizon scan: EU ups the ante on buildings energy efficiency standards

At Energys Group, we are constantly monitoring global work on energy efficiency. And we’d like to draw your attention to a change at EU level that many of us may have missed in the Christmas build up.

On December 19, while most of us were pondering what Santa might deliver, the EU delivered a different kind of present.

Reuters reports that the Union has created new rules on energy standards for all new public buildings, plus improvements for existing buildings, which account for considerable EU greenhouse gas emissions.

“The fight against climate change starts ‘at home’, given that over a third of [the] EU’s emissions [are] produced by buildings. By renovating and making them smart, we are catching several birds with one stone: energy bills, people’s health, and the environment,” Commission Vice-President Maros Sefcovic said in a statement.

The new rules, which aim to boost energy performance across the public sector and encourage renovations aimed at creating more energy-efficient buildings, are most welcome.

But at home, we can’t say for sure whether the EU’s move will make differences in the UK as 2018 progresses.

The key is the Great Repeal Bill. The BBC explains that this critical plank of legislation has reached the committee stage in the House of Commons, which is where there will probably be many attempts by MPs to change its wording.

The idea is that all existing EU legislation will be copied across into domestic UK law, to ensure a smooth transition on the day after Brexit.

So, theoretically at least, now the EU has raised its standards on efficiency, there’s no reason why these new rules shouldn’t remain in place here after Brexit too.

This would be a real positive for energy efficiency in the UK public sector. We already have Minimum Energy Efficiency Standards delivering real change across rented properties. If we can embed EU-derived laws to raise the bar on new public buildings, and renovate existing schools and hospitals, we can massively improve the quality of our public services and increase our transition to low carbon.

At Energys, we hope these new EU standards make it into UK law as Brexit progresses.

What exactly will the new EU rules do?

The EU package creates a clear path towards low and zero emissions building stock by 2050, underpinned by national roadmaps to decarbonise buildings.

First, it encourages the use of information and communication technology (ICT) and smart technologies to ensure buildings operate efficiently, by introducing automation and control systems.

Additionally, it introduces a ‘smartness indicator’ which will measure buildings’ capacity to use new technologies and electronic systems to optimise operation and interact with the grid.

Given the Government’s determination to update and reinvent a smarter UK grid, we feel sure these new EU efficiency changes should make it into UK law. And because EU member states determine their own internal laws on top level standards like these, we could take the measures even further if we have the will.

Let’s be sure our sector as a whole continues to advocate, and ensure this EU efficiency reform package doesn’t get swept under the Brexit carpet.

The final word

January is generally a quiet time, as the sector gets back to work and looks forward to a year of promise. But this EU news, delivered quietly before Christmas, is a real reason to celebrate.

Let’s use the EU lead to push for a more radical, disruptive, energy efficient UK public sector as Brexit deadlines draw ever nearer.

We hope you enjoyed this article? See more of energy policy articles here. Please drop us a line if you’d like to chat about any of the issues and themes covered or to find out more about our energy saving technologies.