The Energy Savings Opportunity Scheme (ESOS) promotes good energy management practices, giving organisations the opportunity to save substantially on their energy costs. Timothy Holman, Head of Consultancy at TEAM Energy, reflects on the now concluded Phase 3 of the scheme, highlighting how organisations that start Phase 4 early will receive greater energy and cost saving benefits.
The Energy Savings Opportunity Scheme (ESOS) is helping UK organisations to save a substantial amount of money through reduced energy bills due to improved energy efficiency and management. By the end of Phase 2 the scheme had already led to an estimated annual energy efficiency saving in the region of 3.0TWh. The last-minute changes to Phase 3 of the scheme are estimated to add a further £1.12billion in energy bill savings on top of the £1.6billion worth of savings from the existing scheme over the next 14 years.
This fact highlights two things crucial about the ESOS scheme. There is a lot of energy and money that organisations can save – the ‘energy savings opportunities’ in ESOS are significant. And also, the Phase 3 story highlights that the ESOS requirements are always open to change. Nothing is set in stone, and with each Government consultation – and now a change in Government too – what organisations need to do has the potential to become more burdensome and complex.
Lessons from Phase 3 – don’t delay
ESOS operates on a four-year cycle during which organisations must conduct energy audits and compile extensive reports on them. In the years following each four-year compliance period, organisations must also then provide energy saving action plans and report on the progress of their plans.
The four-year period gives organisations within the scope of ESOS a natural opportunity to delay, which is perfectly understandable given the many competing pressures that such organisations face. The tendency to delay, however, can lead to negative consequences that are clear when you compare an organisation that audited earlier against one that did so much later.
First, the organisations that audited themselves earlier have benefitted from the energy savings they made for much longer. They have had more years to accumulate the savings made from reducing their energy costs. The downside for the organisations that delayed is that they won’t achieve the maximum potential savings. As the Government’s data highlights, the total savings from ESOS are in the billions. Organisations that delay are missing out on their share of those substantial savings.
This is a lesson for all organisations. Make your savings sooner rather than later to reap more of the rewards for longer.
The second negative consequence is that because of the eleventh-hour changes to Phase 3 requirements, those organisations who left it late felt the sharp end of the requirement changes more than those who had started their compliance audits well in advance. Organisations who audited early were able to make minor adjustments with few complications, while those starting late were starting from scratch.
Not only were they much further behind, but they also faced the issue of the availability of Lead Assessors and consultancy support as well. Lead Assessors are a requirement for all ESOS compliance submissions. Because a large number of organisations needed support last minute, the demand for Lead Assessors outstripped the sector’s capacity. Ultimately, this can lead to delays and fines that can be avoided.
Working with an energy management consultancy can help organisations deal with any changes to the ESOS phase 4 requirements over the next three years. Tapping into expert knowledge can help mitigate these risks and ensure that organisations take the changing and complex UK regulatory landscape in their stride.
Building a holistic programme of energy management
The challenges of ESOS can be transformed into an opportunity for substantial energy savings and operational benefits throughout an organisation.
The final lesson to be learnt is that for the greatest benefits, organisations must not treat ESOS as a four-year cycle. Rather, they must treat it as a regular, ongoing process, and as one part of a holistic energy management programme. And, because ESOS action plans require organisations to collect and report more data more regularly, making the change to a more holistic energy management programme will make ESOS action plans much easier with the right support.
TEAM Energy helps guide organisations through the complexities of ESOS, ensuring they meet the legal requirements and can maximise their energy savings and sustainability benefits. Its consultative approach helps organisations embed their ESOS compliance within a long-term strategy for energy management and energy efficiency, helping to boost their green credentials, and bolster the business case for any future energy savings improvements. Find out more at TEAM Energy.