Energy Savings Opportunity Scheme – Opportunity or Red Tape?
Jeremy Shinton of Mitsubishi Electric UK asks: Energy Savings Opportunity Scheme (ESOS) – Opportunity or Red Tape?
ESOS is a new piece of EU legislation which requires member states to introduce a mandatory programme of energy audits for ‘large enterprises’. The mandatory energy audit scheme will impact on over 9000 of the UK’s largest companies and if you are amongst that number you will need to act during 2015 to ensure compliance. Failure to comply could lead to significant fines – for example up to £50k plus £500 per day for each day you do not comply. The fines are designed to be more costly than the audits, which are expected to range in price from £5k to £50k.
Organisations qualify if, on 31st December 2014, they met the ESOS definition of a “large undertaking”. This is defined as: “…either employing at least 250 people or has an annual turnover in excess of €50m” and, in addition, has an annual balance sheet in excess of €43m.
If your employee numbers or turnover and balance sheet totals for the year ending either on the qualification date of 31 December 2014 or in the 12 months immediately preceding this, exceeds these levels, then you qualify.
Then:
– You have to undertake ESOS approved energy audit by 5 December 2015.
– You will have to submit the necessary paperwork to The Environment Agency about your ESOS audit that would have been conducted by an (ESOS) approved auditor.
– Organisations that qualify for ESOS must carry out an ESOS assessment at the end of each subsequent four-year compliance period, ending on December 5th 2019, 2023 and so on.
Mandatory ESOS Audit
The ESOS audit will cover how energy is used in your business in:
– Transport
– Buildings
– Industrial operations/processes
The ESOS approved auditor will undertake a comprehensive analysis of your business and provide a report outlining amongst other things recommendations to save energy.
The audit will cover an analysis of your energy consumption across different buildings and/or manufacturing processes and offer suggested savings on capital spend projects with associated return on investment (ROI) calculations. Specific energy consumption performance against production and/or weather conditions must be included.
Opportunity or Red Tape?
This will depend upon how you choose to meet your ESOS obligations. Red Tape can be thought of as “excessive regulation” which many would say describes ESOS very well, as probably none of the 9000 large companies in the UK campaigned for its introduction.
Whether ESOS is regarded as excessive regulation or not is perhaps of academic interest. If it applies to your business then you can complain but you cannot hide – you have to comply or pay fines. The choice you subsequently make determines whether ESOS becomes a Red Tape activity or provides you with Business Opportunity.
Threat or opportunity?
Mitsubishi Electric is well positioned to help industry meet the needs of ESOS and provide an approach with associated technology to ensure its customers gain the maximum business benefits. A good number of companies have already sought advice and support as they prepare to address ESOS.
In fact, ESOS support is something that has been developed as part of a broader energy management offering from Mitsubishi Electric working together with RUMM Ltd., branded MelEnergy. This is designed to help businesses to develop long term energy management solutions and address the ESOS legislation.
MelEnergy can provide the approved auditors for ESOS compliance but more significantly the expertise to extend the energy audit specifically for any given business to ensure that they maximise the savings in energy expenditure. MelEnergy can provide the energy management software platform and technical expertise to develop the best energy saving options for you.
Information sources:
Full article from Mitsubishi Electric
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