Extracting the real value in ESOS
Hugh Jones, managing director of Carbon Trust Advisory, looks at the compelling business case of energy efficiency and how businesses can take advantage of the UK Energy Savings Opportunity Scheme (ESOS) to improve business performance.
Very often, new regulation and the need for compliance is perceived as a burden on business: in many cases even the policy benefits are obscured by complaints of red tape or financial cost. But the ESOS regulations are different. They are actually not a burden to business at all. They make clear business sense with minimal disruption.
But we know that despite the rock-solid case for putting time and resources into improving energy efficiency, many businesses are still missing out. The rationale is obvious, the technologies are proven, the finance for capital projects is available, and yet businesses have a frustrating tendency to focus on revenue generation and domain specialisation rather than minimising unnecessary energy use.
At the Carbon Trust we have supported tens of thousands of British companies in becoming more energy efficient, and we are yet to come across one that doesn’t have substantial opportunities for further improvement. Many businesses can reduce energy bills by as much as 20 to 30 percent. In almost every case the size of available savings, when coupled with comparatively short payback periods, combine to make the sort of compelling business case that would cause most finance directors to sit up and take serious notice.
For example, the Carbon Trust helped Doncaster-based housebuilder and social housing provider Keepmoat to become one of the first companies in the country to notify the Environment Agency of ESOS compliance. Going through the process of a company-wide energy audit built up a detailed picture of energy consumption patterns and identified opportunities for improvement.
This helped Keepmoat to identify potential savings that amount to around a quarter of the company’s current energy consumption. Some of the more surprising opportunities included a refrigerated vending machine storing nothing but crisps, and an entire office lighting system that had been enclosed following a refurbishment, but was still active. And implementing all cost-effective recommendations could save the company as much as £1.5 million on operational costs every year.
We would urge every business that needs to comply with ESOS to look for the value in going beyond simple compliance. Taking an approach that focuses on meeting the regulations by doing the bare minimum runs a serious risk: that is, missing out on very real improvements in business performance from identifying and implementing cost-effective energy efficiency opportunities, reducing energy waste and lowering overheads. And businesses should take advantage of this today, so that savings can be realised as soon as possible.The Carbon Trust