Large companies need to prepare now for compulsory energy audits in 2015

Many companies are not aware that they need to start now in order to meet government regulations on compulsory energy audits in 2015. The ESOS (Energy Saving Opportunity Scheme) legislation specifies that all large companies (see definition below) need to undertake energy audits by the end of 2015, but we have found that many companies are not foreseeing the risks of postponing the audit to a later stage. We are highlighting ESOS now as it is not a process that can be completed quickly. If nothing else, there will be a limited number of registered ESOS assessors available, so demand could easily outstrip supply towards the end of 2015. To start at the beginning, ESOS was established by the Department of Energy and Climate Change (DECC) in response to the requirement for all Member States of the European Union to implement Article 8 of the Energy Efficiency Directive. In simple terms, ESOS is a mandatory energy assessment and energy saving identification scheme for large undertakings (and their corporate groups) requiring those companies to carry out three actions: 1) measure their total energy consumption 2) conduct energy audits to identify cost-effective energy efficiency recommendations 3) report compliance to the Environment Agency There are two main routes to compliance – certification by an accredited certification body to the ISO 50001 Energy Management System or undertaking ESOS Energy Audits. For companies who have achieved ISO 50001:2011, they will be ESOS-compliant provided that their total energy consumption – buildings, transport and processes – falls under the certification. The company will still need to notify the Environment Agency of its compliance on or before the compliance date of each phase; the first four year compliance phase runs 6 December 2011 to 5 December 2015. For those companies that opt not take this route to compliance, ESOS Energy Audits must be carried out, overseen or approved by recognised Lead Assessors – members of professional registers approved by the Environment Agency. These can be either in-house experts or an external individual or company. The Department of Energy and Climate Change gives the following advice to companies in selecting an appropriate Lead Assessor from an approved register: “You should consider what other qualifications and/or experience that individual holds and how these might best benefit you in getting the best results from your audit(s). You may wish to consider your prospective auditor’s • sector-specific experience • familiarity with industry specific technologies and processes, and • accreditation/certification to audit against prescribed standards (ISO standards) or other UK schemes (DEC assessor or Green Deal Advisor).” There are some activities the Lead Assessor will have to undertake, including overseeing or reviewing the company’s ESOS Energy Audits and/or any other auditing activities, such as Display Energy Certificate assessments or Green Deal Assessments. He/she will also have to sign-off the overall ESOS Assessment once complete to confirm it meets the requirements of ESOS overall. The ESOS Energy Audits route include any energy audit work undertaken during the compliance period under other schemes, such as activity under the Carbon Trust 12 Standard, Logistics Carbon Reduction Scheme and Green Fleet Reviews, provided the Lead Assessor confirms this work meets the minimum standards required for ESOS Energy Audits. Importantly, whichever route or combination of routes to compliance a company chooses, it will need to cover all its areas of significant energy consumption in each phase, accounting for at least 90% of the total energy consumption. The scheme is estimated to lead to £1.6bn net benefits to the UK, with the majority of these being directly felt by businesses as a result of energy savings. It applies to large companies only, defined as ‘if, on the qualification date (31 December 2014 for the first phase of ESOS), they are: 1) An undertaking which has 250 or more employees 2) An undertaking which has fewer than 250 employees, but has: - an annual turnover exceeding €50m and - a balance sheet exceeding €43m 3) Part of a corporate group which includes an undertaking which meets criteria (1) or (2) above. The Department of Energy and Climate changes says that although SMEs or public sector bodies are not required to participate in ESOS, they could still benefit from voluntarily meeting the ESOS requirements. “ESOS provides a framework you may wish to use to help you identify energy efficiency opportunities, e.g. you may wish to use a qualified ESOS Lead Assessor to undertake energy audits of your operations.” It emphasises that implementing energy efficiency measures identified through audits can reduce energy costs and can also have wider benefits “such as reducing other costs (e.g. from waste disposal and maintenance), and increasing employee engagement, comfort and satisfaction in the workplace.” Although companies have until December 2015 to comply, SGS United Kingdom is focusing on ESOS now as the sooner companies start the process the better. We strongly recommend that companies take a look at the requirements now, decide which route or combination of routes suits them best and then make a detailed plan of how they will implement that decision. Ana Inacio Sustainability Consultant SGS United Kingdom SGS is the world’s leading inspection, verification, testing and certification company. SGS United Kingdom has been accredited as an ISO 50001:2011 provider by UKAS. For more general energy management advice: Visit www.sgs.co.uk/energy-management Call 0800 900 094 Email uk.nowisthetime@sgs.com and/or subscribe to the SGS e-newsletter at www.sgs.co.uk/subscribe

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