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ESOS: Why It Doesn’t Pay To Wait

Any business energy user will know that the regulation surrounding energy consumption is vast and ever-changing. With many UK businesses now having completed their Energy Savings Opportunity Scheme’s (ESOS) assessment, and the next round not required until 2019, the temptation will perhaps be to leave ESOS findings on the shelf and move onto the next pressing issue. But according to the Carbon Trust, it could be highly beneficial to act on your ESOS assessment now.

Savings could amount to 20%

In its analysis of hundreds of completed ESOS assessments, the Carbon Trust have found that many businesses had scope to significantly cut expenditure and improve their energy efficiency. ESOS is a unique piece of legislation because it affects a number of businesses that have had little to no previous experience in energy management, and compels them to gain a deeper understanding of their energy use. As the average energy spend of these businesses is around £1.8 million, going on to implement changes based on ESOS assessment findings could have positive effects on the entire organisation.

In fact, it seems that the impact of the ESOS scheme may have been grossly underestimated. The Department of Energy and Climate Change initially predicted that if ESOS managed 5 percent reductions, it would collectively save businesses £250 million. However, the Carbon Trust has found that the average reduction achievable through cost-effective measures is around 20 percent for each business – which for businesses with an average energy spend of £1.8 million is a £360,000 saving. With the average overall payback period for these measures being less than three years, there is a sound business case for implementing ESOS recommendations sooner rather than later.

Start with the simple changes

Many of the possible measures for efficiency identified by the ESOS audits aren’t particularly difficult or time-consuming to execute. Some of which are applicable across a range of industries included changes to lighting, metering and heating, ventilation and air conditioning; all of these areas are open to efficiency measures that many businesses were simply not using to their advantage. Transport was also identified as a key area for potential energy saving, and is an area that seems to be overlooked despite contributing 28% of a business’s overall energy costs. Simple measures such as checking the efficiency of a company or grey fleet before procuring it could save a business around 15 percent on their transport energy expenditure. Read our Lead Assessor’s comments.

Whilst dedicating time and resources to energy efficiency might not be top priority for many businesses, ESOS has actually already done much of the hard work by identifying the areas where changes can be made. Those who maximise on the opportunity created by ESOS will undoubtedly be seeing the financial benefits long before the next round of assessments in 2019.

This post is based on the findings of a report by the Carbon Trust.