Article 8 of the EU Energy Efficiency Directive requires all member states to introduce a system of energy audits for large enterprises. With the first deadline just a year away, affected companies in the UK must consider their position now. Rhiannon Garth Jones reports.
In June 2014, the Department of Energy and Climate Change (DECC) announced the UK Government’s Energy Saving Opportunity Scheme (ESOS), which will address the requirements of the EU Energy Efficiency Directive. The energy intensive nature of working with clay means the industry will be particularly affected by the new requirements. Those companies who already have a certified ISO 50001 Energy Management system are already in compliance with ESOS and only need to inform the Environment Agency (EA) of the certificate. For those who don’t, we’ve compiled the most important things to know.
You are probably within the scope of ESOS if, on 31 December 2014, you are:
- An undertaking with 250+ employees
- An undertaking with fewer than 250 employees, but have: an annual turnover exceeding £39m and a balance sheet exceeding £33m
- Part of a corporate group that includes an undertaking to which either (1) or (2) applies
- Measure your total energy consumption
- Conduct energy audits to identify cost-effective energy efficiency recommendations. At least 90% of your total energy consumption is subject to an ESOS compliant energy audit, a Display Energy Certificate, a Green Deal Assessment or a certified ISO 50001 Energy Management System during each phase of the scheme.
ESOS will operate in four-yearly phases. You must assess whether or not you are required to participate in ESOS on each qualification date and notify the EA of your observance by each compliance date.
Shaun Bainbridge, Director of Assurance at Lucideon,discusses the key elements of the new regulations.
What are the benefits of compliance with ESOS?
The headline benefits from ESOS compliance are obviously the potential energy savings that can be made. However, this is only if the energy savings opportunities that are identified during the audit are actually implemented – there is no mandatory requirement to implement the measures according to the scheme rules.
Are there benefits beyond potential energy savings?
If ESOS compliance is achieved through a certified ISO 50001 system, there are other associated benefits from the accreditation mark, such as enhanced credibility with stakeholders, entry onto procurement lists and a marketing edge over competitors. For instance, one university has identified that an international accreditation related to green activities is a factor increasingly considered by students when making application choices.
The clay-related industries, by nature of the fact that they are energy intensive, have been reducing energy use for many years, as minimising energy costs is critical to achieving profitability (or survival). It remains to be seen how many companies in this sector have any material energy efficiency gains to make other than huge step-change technologies.
What are the potential difficulties companies should look out for?
At the top level, the number one issue is organisational boundaries, and who and what are required to be reported under the scheme. Many organisations are looking at dis-aggregation to decide the best way for the company to report as a whole. For instance, for some organisations it is most effective for part of them to report via ISO 50001 and leave any remaining parts to be dealt with in a small ESOS audit.
At the reporting level, the key issue we are seeing is incomplete reporting. Existing schemes such as CRCEES or EUETS are partial scope schemes and do not include total energy use (although they often capture the lion’s share of energy use). For ESOS, the whole spectrum of energy use needs to be considered (operations, buildings and transport) and this needs to be done right across the organisation.
For operations that are heavily focused on manufacturing processes, it is important to consider energy use from corporate buildings – for example, to at least show that 90% of it is being captured. For transport, it is important to consider UK-related energy use, as the ESOS scheme is only for the UK and energy use from overseas will be picked up by relevant national schemes.
What is the most important aspect of the new regulations?
Firstly, this new regulation is mandatory, a requirement that has come down from the EU via the Energy Efficiency Directive and, as such, there will be no wriggle room for operators. We have seen this in the EU Emissions Trading Scheme, where top-level EU regulations are implemented at local level and enforcement is strict.
Secondly, a key positive point to come out of the ESOS regulation is that the Agencies are acknowledging ISO 50001 certification as the key compliance route. In a similar step, Germany has made ISO 50001 certification the entire route to complying with the EU directive. The timeframe is such that companies can strengthen existing management systems to add in energy, which can normally be achieved in 3–6 months – providing a clean path to certification.
Case study: Ibstock Brick Ltd
In June 2014, Ibstock became the first company in the heavy clay industry to be ISO 50001 certified. Its aims were:
- to make better use of energy consumed
- to achieve consistency in production processes through people
- to reduce energy consumption and CO2 emissions.
Michael MacGowan, Quality, Environmental and Energy Manager at Ibstock, says, ‘A clear roadmap, effective communication tools, supportive external partnerships and, above all, employee engagement at all levels were fundamental to achieving certification.’
An Energy Centre of Excellence was created to develop strategy, pilot key initiatives, and set objectives and targets for the entire business. People were identified as the energy users, as opposed to machinery and processes, and driving the necessary behaviour change was a key area of focus.
One area where the survey identified potential energy savings was lighting, and the final outcome was a 60% electricity reduction. This standard lighting developed at the Centre of Excellence will be rolled out to all of Ibstock’s factories, with an anticipated 8% reduction in total electricity use across the business.
For more information, visit bit.ly/1tkTqPA