Tag Archive: Energy

ESOS-new energy reporting regulations for large enterprises

As of 2012, UK large enterprises employed nearly 11 million people with a turnover of £1.6 trillion, and consumed approximately one-third of UK energy.

Somewhere between 4,400 and 6,400 UK enterprises already monitor and report energy consumption under legislation such as the CRC, however the EC wished to extend these activities beyond passive monitoring to include detailed recommendations for efficiencies.
On October 25th 2012 the EC agreed the ‘EU Energy Efficiency Directive’ (‘EED’).  Article 8 of this legislation requires each Member State to instruct every ‘large enterprise’ to conduct an energy audit by December 5th 2015, repeating every four years thereafter.  Consultation ceased on Oct 3rd 2013 and in June 2014 the DECC will announce final details of the UK’s version, called the ‘Energy Savings Opportunity Scheme’ (ESOS).  Approved assessors will carry out Article 8 compliant ESOS assessments to measure energy consumption and recommend efficiency measures.  It is estimated that if enterprises implement just 6% of recommended improvements, energy consumption will reduce by 3.3TWh annually by 2016.
Approximately 7,265 UK enterprises will be affected, occupying between 170,000 and 200,000 buildings.  Entities certified to ISO50001 or ISO14001 or where current Display Energy Certificates, Green Deal Assessments, Climate Change Agreements or Green Fleet Reviews are likely to be deemed already ESOS compliant.

Who will it affect ?
A ‘large enterprise’ is an entity engaged in an economic activity, employing more than 250 staff with a turnover greater than € 50m and/or a balance sheet over € 43m.  Some charities, CICs, unincorporated associations and certain universities are theoretically included (11% of the 7,265 enterprises will be not-for-profit).  Public bodies (defined as ‘contracting authorities’ in Directive 2004/18/EC) are exempt from Article 8 because a separate Article – Article 5 – addresses energy efficiency in the public sector.  Universities and colleges financed mostly by other ‘contracting authorities’ will be considered public bodies for the purposes of the EED however some universities – due to their specific funding arrangements – may not be exempt.  SMEs will be exempt unless part of a larger eligible ‘group enterprise’.  In this case eligibility will be determined by the highest UK parent company (as defined under the Companies Act 2006).  In the event a ‘large group enterprise’ is deemed eligible, all subsidiaries – SMEs or not – will require an energy audit.

What do I have to do ?
Audits must be completed by 5 December 2015 and then at least every four years thereafter. Depending on the compliance route chosen, organisations may need to notify the scheme administrator that they have conducted an ESOS assessment, and potentially disclose any key action taken in their annual reports.

What will a typical audit comprise ?
An ESOS assessment seeks to go beyond merely measuring an organisation’s aggregate energy use to incorporate measurements of the efficiency with which it uses it.  It is intended that assessments quantify energy use relative to headcount (or relative to turnover) which will enable comparisons between assessments and potentially within industry sectors.  It will consider variations over time of the energy use within key buildings/operations/transport activities.  The assessment will include clear guidance as to where cost-effective energy savings can be applied.  It is intended that ESOS assessors have discretion as to the granularity of data they collect and as to the parameters by which suggested improvements are deemed cost-effective.
Entities with current Display Energy Certificates or Green Deal Assessments could potentially be deemed ESOS compliant.  In the same way, a transport fleet which has undertaken a ‘Green Fleet Review’ within four years might be deemed already compliant otherwise such fleets will require their efficiency monitored (including “grey” fleets of employee’s own vehicles).

Who will do the assessments ?
Large enterprises will need to identify an approved ESOS assessor (either existing competent staff member or external) to complete the audit. The Government has yet to define a route by which individuals will receive ESOS accreditation.

What will ESOS assessments cost ?
A rough estimate for the initial ESOS survey is £17,000 with subsequent assessments costing in the region of £10,000.  These figures exclude the cost of implementing any recommendations.

ESOS-new energy reporting regulations for large enterprises

LED lighting – choose the correct one

Lighting consumes 19% of the world’s electricity, but traditional incandescent bulbs convert only 5% of this into light.  Consequently, in 2007 the EU announced a phased ban on their import or manufacture – 100w bulbs were banned in 2009, 60w in 2011 and so on.  More efficient versions (such as compact fluorescent light bulbs (CFLs) or LED bulbs) are now widespread, winning some prestigious converts – the Empire State Building is now LED lit and Tower Bridge has 2 km of flexible led lighting.  This has brought significant cost savings – the Dorchester Hotel saved £50k per year by installing LED lighting.  Savings come not only from energy efficiency – replacing bulbs in inaccessible locations can be vastly reduced due to the long service life of modern units.

However, CFL and LED lighting are not without problems – CFLs can emit high levels of ultraviolet (UV) radiation and the bulbs themselves contain mercury.  They are therefore regarded as hazardous waste and manufacturers and retailers have an obligation to provide suitable collection and disposal facilities, often subcontracted to specialists such as such as that Recolight.  In the case of domestic breakages, guidelines published by the UK government and  United States Environmental Protection Agency recommend that pets and humans should vacate the vicinity for 10 minutes and air-conditioning should be shut off until the debris is cleared (vacuum cleaners should not be used as they may spread mercury further afield).

A study by Dr. Celia Sánchez-Ramos, of Complutense University in Madrid drew attention to the damage which some LED bulb’s harsh blue-white light can do to human retinas, particularly to young people whose young eyes are not yet capable of filtering out shorter wavelengths.  Moreover, human eyes are designed to see using the light reflected off an object – many modern consumer items such as backlit televisions, games consoles or computer monitors require users to stare directly at a bright LED light source for long periods of time.

For most businesses, rising energy prices (and ECA incentives) will soon make re-lamping an attractive proposition.  Bespoke units to fit existing luminaires can make this a swift and efficient procedure, with breakeven horizons as little as 1 year.  However, LED lamps vary greatly in the quality of their manufacture and/or light output.  Lumens, colour temperature and (most important) light quality can all influence the efficiency and safety of a workforce, and independent external advice is recommended.

LED lighting – choose the correct one

Rising energy prices

Whilst the abundance of shale gas in the US has caused energy prices to plummet, in the UK British Gas has announced an expected price increase in the next two months – it raised residential gas prices by 6% last November.  If it does, the other “Big 5” will follow suit blaming the cost of implementing the Government “Energy Company Obligation” scheme to help the lower paid insulate their homes.   In addition, prospective increases in “Green” surcharges such as Renewables Obligation and Feed In Tariffs mean that energy is going to become increasingly expensive.   Whereas previously “best advice” was to opt for short-term contracts to enable switching if one supplier became uncompetitive, it now worth considering locking in to a longer contract to give certainty over future costs.

Rising energy prices

Yet another surcharge on your energy bill

The Green Deal has begun.  It is a self-funding initiative to encourage householders and business owners to fit energy efficiency measures and reduce bills.  The Deal’s “Golden Rule” is that the cost of any measures should always be less than the monetary savings they bring.  The scheme has had a tenuous start – allegedly the first 3 months of the scheme saw only 5 applications nationally.

Many households simply cannot afford the capital outlay necessary for improvements.  In addition, certain houses (mainly older solid-wall properties) would benefit greatly from insulation but these “hard to treat” buildings are expensive to insulate.  By failing the “Golden Rule” they become wholly or partially ineligible for the Green Deal.  A subsidy scheme called the Energy Companies Obligation Order (ECO) has been created to assist these sectors.

Phase 1 of ECO began on 5 December 2012.  It places a legal obligation on major energy companies to subsidise the installation of insulation/economy measures for certain low income or vulnerable households.  ECO has three main strands:

a)      60% will be spent on the Carbon Emissions Reduction Obligation, intended for remedies that fail the Green Deal “Golden Rule” such as solid wall insulation or hard-to-treat cavity wall insulation.

b)      15% will be spent on the Carbon Saving Community Obligation, to subsidise insulation measures for domestic energy users in low income areas.  Measures include wall/loft insulation, double glazing and boiler replacement.

c)       25% will be spent on the Home Heating Cost Reduction Obligation, to assist low income and vulnerable households to economically heat their homes (mainly social housing sector).  Any measure is potentially eligible provided it cuts heating bills.

ECO will add an estimated £1.3 bln per year to consumer’s energy bills.  Eligibility is complex and depends on location, individual financial circumstances and an EPC survey.  Information on how to apply can be found here.

Yet another surcharge on your energy bill