ESOS PHASE 2 PRACTICAL HINTS AND TIPS
The Environment Agency, Scottish Environment Protection Agency (SEPA), Northern Ireland Environment Agency (NIEA) and Natural Resources Wales (NRW) have jointly advised organisations that they should all start now carrying out energy audits as part of the compliance process for ESOS Phase 2. Here we set out a few ESOS Phase 2 practical hints and tips.
Don’t forget the purpose – identify energy saving opportunities
ESOS was developed to help businesses identify energy saving opportunities. Legislation often gets a bad press, however, the principles here are laudable. A strategy that identifies savings, then importantly, acts to implement them (something missing in the legislation and a step that is up to the participants) can only be a good thing. Reducing energy consumption has many benefits:
- Lowered costs
- Reduced carbon footprint
- Improved corporate responsibility
- The ability to wrap up into tenant engagement programmes
ISO 50001 – a structured approach to understanding and improving energy performance
If you want to get ISO 50001 up and running, start now.
The international standard for energy management, provides a structured approach to understanding and improving energy performance, however, implementation cannot be rushed through. As Neil highlights in his recent blog, organisations that wish to use ISO 50001 as the compliance route should start work now.
As many will know, organisations with ISO 50001 do not have to complete audits, however, it is a mistake to think that this simplifies matters. ISO 50001 is not an easy way forward. It requires completion of a baseline assessment and the establishment of objectives for improvement. As a result, organisations that operate ISO 50001 management system will have also completed audits in some format.
As many will know, organisations with ISO 50001 do not have to complete audits, however, it is a mistake to think that this simplifies matters.
Those in real estate should also note that ISO 50001 does not count towards GRESB points, whereas ISO 14001 certification does. Although this is something we are lobbying GRESB on, I can understand the reasoning. GRESB is a sustainability benchmarking scheme, ISO 14001 requires consideration of all significant environmental issues, whereas ISO 50001 is focused on energy only.
Audits for compliance – beware of changing portfolios
Obligated organisations must assess energy consumption over 12 months, which must include the qualification date of 31 December 2018. 90% of energy identified must then be assessed. As a result, auditing assets now, solely to comply with ESOS, would be a waste of time if the assets were then sold before the qualification date.
Audit anyway – the savings start to add up
Despite the above point, audits will still identify improvement opportunities that reduce energy consumption. Subject to wider asset management plans (redevelopment, sale etc), I would recommend that audits are completed on all assets with an energy spend of over £200,000 per year – irrespective of ESOS obligations. Our audit team typically find quick win savings of 5% and often more (5% on a £200,000 spend per year equates to £10,000 – with a typical payback of less than a year). Apply these principles to a portfolio of 10 assets and the savings start to add up significantly.