Energy Saving Opportunity Scheme (ESOS) Consultation 2013

The Energy Saving Opportunity Scheme (ESOS) is the UK government’s proposed approach to meeting the requirements set out in Article 8 EU Energy Efficiency Directive. The Directive, which came into force in November 2012, requires all EU member states to introduce a programme of regular energy audits for large organisations. All qualifying organisations will have to conduct an audit by 5^th December 2015 and then undertake regular audits every four years subsequently.

The Energy Institute (EI) consultation response was the result of a high level consultation workshop that was hosted at the EI’s headquarters in London with both the Energy Efficiency Deployment Office (EEDO) and EI members. It was attended by members from a range of disciplines including Chartered Energy Managers, members of the Register of Professional Energy Consultants (RPEC) and end user organisations.  This discussion formed the premise for the EI consultation response which underwent peer review from the EI’s recently formed Energy Management Panel (EMP) before submission to government.

Key Points from the Consultation

The EI facilitated a discussion between government, EI members and wider stakeholders on the potential implications of the proposed ESOS scheme. The event highlighted some main themes and considerations for ESOS which are as follows:

• Complementing and enhancing the current policy landscape to create opportunities for business

For ESOS to be successful, it should enhance the existing policy landscape in energy management. The significant majority of organisations that will fall into the scope of the policy have already adopted at least one form of regulation to manage their energy use. It is appreciated that is not financially feasible to create a scheme from scratch, and therefore ESOS will have to be carefully designed to incorporate the existing policy landscape whilst avoiding double regulation and unnecessary administrative burdens. It is imperative that the scheme provides an opportunity for organisations rather than becoming a burdensome box-ticking exercise. It should be recognised that there can be discrepancies between organisations’ interpretations of legislation in practice (as seen in CTS or CRC). This could mean that although organisations are complying with the same existing policy, variations in individual standards may occur.

• Alternative Route to Compliance and Transition Arrangements to be evidence based

EI members believe it is imperative that any alternative scheme (whether alternative or transitional) should have to provide evidence in order to comply with minimum standards of ESOS scheme. There is a general consensus that ISO 50001 Energy Management Systems should be deemed as an
alternative route to compliance, when used in conjunction with BS EN 16247-1: Energy Audits- General requirements. Some agreements are deemed not suitable to be alternative routes to compliance, for instance Green Deal Assessments and Green Fleet Review as they are either not applicable or do not prescribe the required level of evidence necessary to produce a fully effective audit. There are several potential transitional arrangements that are discussed in the detailed EI response. However, EI members wish to stress that any transitional arrangement should be regarded only as interim measures, to encourage maximum compliance by 2015 and should not become permanent elements of the ESOS scheme.

• Flexibility and robustness are to be encouraged

There is a delicate balance needed within ESOS; to allow flexibility in the scheme to enable it to be tailored to be cost effective for an organisation’s specific needs whilst enforcing robust standards to ensure the scheme is successful. ESOS will not produce the required results if standards are too lax or constraints are too rigid. It should be recognised that there is a wide range of organisations that will have to comply with ESOS, of varying size and complexity. International standards have been carefully developed to set out guidance for the industry and EI members believe it is imperative for ESOS to utilise them. This guidance allows not only for a minimum standard but also provides opportunity for organisations to expand and develop their energy management practice as they see fit.

• The lack of requirement to implement recommended measures is detrimental to the overall aim of the policy

EI members were surprised to discover the scheme did not include any requirement or incentive for organisations to implement the energy efficiency measures which will be highlighted in the assessment. The government believe that when organisations see the potential savings, they will be driven to implement them, as a way of counteracting the financial cost of the undertaking the audit. However, it is the experience of EI members working in the field that this is not necessarily the case. It should be recognised that energy efficiency measures will have to compete with many other capital expenditures. In industries where energy is not a primary business function there is a question mark as to the priority given to such measures. Whilst the aim of policy is to ensure that companies better manage their energy, the lack of a requirement for them to actually do so raises questions as to its impact, especially given other policy requirements. Here, there is a role for senior management to support the adoption of recommendations and ensure that schemes are cost-effective.

• Experience, international qualifications and their impact on organisations and standards

EI members believe that a key measure of applicability to undertake energy audits should be the experience of auditors. The complexity of energy audits will require significant understanding and levels of competence from the auditors. Therefore, it should be recognised that their assessment should be based on a combination of the level of experience as well as qualifications. Stemming from the nature of an EU Directive, EI members question the approach of other member states to approving energy auditors. There is support for European auditors to be recognised to work in the UK and for UK-based auditors to be recognised to work across Europe, provided that standards are maintained to the level laid out in the ESOS document. For instance qualifications and expertise gained in Republic of Ireland should be recognised within the scheme in the UK and vice versa. There is also wider concern as to how other member states are proposing to implement the Directive and what implications this will have on British organisations.