The Energy Savings Opportunity Scheme (ESOS) is a legal requirement for organisations of a certain size or value. The scheme is designed to make companies look at how they use energy with a view to improving performance. If your organisation qualifies for ESOS, you have until December 5th to comply or complete your phase 3 reporting.
Over the last few episodes we’ve explored two routes to compliance: Energy Audits and ISO 50001. As we explained, ISO 50001 goes above and beyond ESOS requirements and ensures you don’t have to gather an evidence pack every four years to prove compliance.
However, there are many more benefits to ISO 50001 than just it’s compliance with ESOS requirements. Join Mel this week as she dives into the other benefits ISO 50001, including real world examples from some global brand names.
- Why Implement ISO 50001?
- What are the benefits of ISO 50001?
- Who has found success with ISO 50001?
In this episode, we talk about:
[01:41] Benefit #1: Cost savings – By Improving your energy efficiency and reducing energy consumption, you can save a startling amount. ISO 50001 helps you to put a system in place that will allow optimisation of your energy usage.
[02:20] Benefit #2: Compliance – ISO 50001 can help you comply with the likes of ESOS and SECR. Carbon reporting and legal requirements in relation to it are global, any countries lagging behind on these requirements will soon adopt or create their own in response to the limited time we have left to reduce the effects of the climate crisis.
[02:45] Benefit #3: Reduce your environmental Impact – By reducing energy usage and switching to more energy efficient means, you will reduce your carbon emissions. ISO 50001 also acts as a complementary tool to ISO 14001 (Environmental Management) that many already have in place.
[03:10] Benefit #4: A coordinated approach – Companies, especially large ones, may have multiple systems in place to manage energy. ISO 50001 helps to create a universal framework that can be applied to a whole business.
[03:25] Benefit #5: External Incentives – There may be external benefits that can be gained by proving that you are taking steps to reduce your environmental impact. This could include tax benefits, insurance ect
[04:25] Benefit #6 Informed funding – There is a lot of funding out there to help companies with new green technology. Having ISO 50001 in place will give you a consistent overview of your energy usage, so you’ll be able to make informed funding choices based on where more savings can be made in terms of emissions and general costs.
[04:55] Benefit #7 Track Objectives – ISO 50001 can help you set Objectives and then set policies and procedures to help make those a reality. Those familiar with ISO Standards will know that it’s all about continual Improvement, so you’ll always be making progress.
[05:30] Benefit #8 Credibility – ISO 50001 is an internationally recognised Standard, and is a mark of your credibility. This can be used in marketing materials, displayed on your website, used in Case Studies ect.
[06:35] You don’t have to be a large brand or organisation to Implement ISO 50001. It can be implemented for a business of any size where energy is a significant environmental Impact.
[07:05] Hilton’s success with ISO 50001: One of the world’s largest hotel chains, Hilton was the first global hospitality company to achieve portfolio-wide certification to ISO 50001. The savings have been significant, reducing Hilton’s energy intensity by 20.6% and its carbon intensity by 30.0% from a 2008 baseline.
[07:55] Bentley’s success with ISO 50001: Reduced energy usage by two-thirds for each car produced and by 14% overall for the entire plant, delivering savings of 230 GWh of energy – enough to power 11,500 houses for a year!
[09:37] Hitachi’s success with ISO 50001: Following the Japanese earthquake disaster in 2011, Hitachi decided to introduce “the smart next-generation factory plan”. Following implementation of ISO 50001, the plant reduced 23 % of the contract electricity, 15 % of CO2 emissions and 5 million yen/month of electricity costs.
[10:12] Toyota’s success with ISO 50001: Implementation of ISO 50001 resulted in a reduction in electricity usage which has translated into cost-savings of more than R4.8 million (Over £210,000!) over a two-year period. The company also generated energy savings of GWh 8.15 across its 14 plants, and reduced its GHG emissions by 7,804 tons.
[10:50] Schneider Electric’s success with ISO 50001: The company adopted ISO 50001 certification in order to maximise energy performance. Following the certification, the business’ energy performance increased by 10.5%, with savings totaling £26,500 over 3 years.
[12:15] Want more info on ISO 50001? – Head on over to the isologyhub to get access to a wealth of ISO 50001, and energy management tools
For those interested in ISO 50001, we’re offering a free copy of the Standard to anyone who signs up for Implementation with us before the 16th June.
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What is ESOS?
In October 2012 the European Union established the Energy Efficiency Directive (EED). The Directive specified that all member countries were to create an energy audit scheme which would ensure the achievement of the Union’s 2020 target on energy efficiency. From this, the ESOS Regulations 2014 was established.
The ESOS Regulations 2014 requires large organisations in the UK to undertake comprehensive energy audits, every four years, which focuses on the energy that is used by the organisation’s buildings, industrial processes and transport, the consumption of the energy being used, and any potential energy saving opportunities that the organisation could instrument.
Who is Required to Comply with ESOS?
Any large organisations that employ 250 or more staff or have an annual turnover in excess of £42m and an annual balance sheet total of around £36.5m or are part of a corporate group containing a large enterprise are required to comply to ESOS.
When Do You Need to Comply By?
We are now in the second round of ESOS Assessments and below are important dates to remember;
• The Qualification Date – 31st December 2018
• The Reporting Date – 5th December 2019
How do you Comply to ESOS?
There are two paths to become complaint with ESOS;
You will need to carry out an ESOS Audit. In order to complete your assessment, you will be required to undertake the following;
Identify and Calculate your Total Energy Consumption
You will be required to calculate the energy used by your organisation/group’s buildings, industrial processes and transport.
- Identify Areas of Significant Energy Consumption
While calculating your Total Energy Consumption, you should also be identifying the energy used by your organisation that accounts for at least 90% of your total energy consumption.
- Appoint a Lead Assessor
If you don’t have an ESOS Lead Assessor undertaking the audit, you will then be required to appoint a lead assessor to either carry out and oversee or review your energy audits and overall ESOS assessment. If you do require a Lead Assessor, they can be external, but you must ensure they are members of an approved professional body register.
- Notify the Environment Agency
Once you have conducted and completed your ESOS Audit, the next step is to submit your ESOS Notification of Compliance to the Environment Agency. The deadline for the this is 5th December 2019.
- Keep Records
Once you have notified the Environment Agency with your ESOS Notification of Compliance, you must keep the ESOS Audit as evidence.
If your organisation is certified to ISO50001, you are not required to carry out an ESOS Audit. All you have to do it notify the Environment Agency that you are compliant with ESOS.
Need help with ESOS? We’d be happy to help, simply contact us on: email@example.com
So in the latest budget announcement last week, in addition to the headline grabbing ‘Sugar levy’, George Osbourne also announced changes concerning business energy taxes and reporting:
- The Carbon Reduction Commitment (CRC) scheme will be abolished following the 2018/19 compliance year. In parallel there will be an increase in the Climate Change Levy (CCL) ensuring the change is a fiscally-neutral reform for the Government.
- Organisations will report under the CRC for the last time by the end of July 2019, with a surrender of allowances for emissions from energy supplied in the 2018-19 compliance year by the end of October 2019.
- The full Government’s consultation response on this review was published alongside the budget. It announces a plan to rebalance CCL rates for gas and electricity. From April 2019, it will move to a ratio of 2.5:1 (electricity: gas), compared to the current 2.9:1 ratio. In the longer term, the government intends to move to a ratio of 1:1 (electricity: gas) by 2025, suggesting this will more strongly incentivise reductions in the use of gas, in support of the UK’s climate change targets.
- Importantly for Energy Intensive businesses, the existing Climate Change Agreement (CCA) scheme eligibility criteria will remain in place until at least 2023. The CCL discount for electricity will increase from 90% to 93%, and the discount for gas will increase from 65% to 78% from 1 April 2019.
- The budget confirmed plans to consult in summer 2016 on a simplified energy and carbon reporting framework for introduction by April 2019. It will propose mandatory annual reporting for the organisations within its scope, with board or senior level sign-off and some public disclosure of data. The consultation will cover issues such as the range and size of organisations to be covered and will make proposals about the amount and type of information to be collected and disclosed, data collection timetables and how information is reported.
- Due to the continued low price of the EU Emissions Trading System (EU ETS), the government is maintaining the cap on Carbon Price Support (CPS) rates at £18 t/CO2, uprating this with inflation in 2020-21, in order to continue protecting businesses.
The full response to the consultation can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508159/reforming_business_energy_efficiency_tax_response_final.pdf
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