by Brianna Crandall — July 14, 2014—The Carbon Trust is calling on British businesses to save billions on their energy bills through implementing the most cost-effective energy efficiency opportunities identified through the new Energy Savings Opportunity Scheme (ESOS). The new regulations bring into effect Article 8 of the E.U. Energy Efficiency Directive, with compliance due before December 5, 2015.
ESOS regulations are likely to apply to around 7,300 enterprises, occupying up to 200,000 buildings, including up to 10,000 industrial plants, and accounting for some 35% of the U.K.’s total energy consumption. These enterprises will be required to undertake an energy audit at sites that make the majority of the total energy use of the business. This audit will then have to be repeated every four years.
The U.K. government’s Impact Assessment suggests there are 43 terawatt-hours (TWh) of potential savings with a payback of less than two years in the scope of the policy, with an expectation that 2.5 TWh will be implemented. The government estimates that the net benefit of the policy to the U.K. will be around £1.9 billion between 2015 and 2030, based on a conservative prediction that only 6% by value of potential energy saving opportunities identified will be implemented.
But the actual benefits for business, based on Carbon Trust analysis, are likely to be far greater than estimates suggest, with the actual savings on energy bills being some two or three times higher.
The Carbon Trust has provided over 200,000 fully-costed energy-saving recommendations to more than 35,000 U.K. businesses. This experience suggests that around four in ten simple recommendations with quick paybacks are implemented, while around two in ten of the more complex or long-term recommendations are taken forward.
Large businesses can cost-effectively save around 15% from energy bills through efficiency measures, with an average internal rate of return of 48% and payback within three years, says the Carbon Trust, and in many cases savings can be even higher. It is not uncommon to see reductions of as much as 25%, notes the company.
These savings can be achieved through readily available and well-established technologies in areas such as lighting and heating, provided that the technology is properly specified and sized, and that the installer is appropriately skilled, says the Carbon Trust.
Myles McCarthy, Director of Implementation at the Carbon Trust, commented, “The scheme is a much-needed wake-up call for businesses that haven’t already benefitted from the significant cost savings that can be achieved through energy efficiency. But identifying the opportunity is only half the battle. If recommendations go unimplemented, then businesses will needlessly be paying over the odds on their energy bills.”
Commenting on the release of the ESOS guidance, which recognizes that the Carbon Trust Standard can be a route to compliance with the new regulations, Darran Messem, Managing Director of Certification at the Carbon Trust, said, “Around 500 large companies in the U.K. that already hold the Carbon Trust Standard will be required to comply with the ESOS regulations. These businesses are amongst the leaders that are already taking serious action to regularly measure energy use and certify their carbon emissions, going beyond just identifying opportunities for energy saving and committing to make real reductions.
“We welcome that the guidance for the ESOS regulations recognizes that activity undertaken to certify to the Carbon Trust Standard can be a route to compliance with the regulations. I am also pleased to announce that we are currently making further improvements to the methodology and certification process for achieving the Carbon Trust Standard, making it even simpler to comply with the ESOS regulations at the same time as certifying. This means that leading businesses can cut through the red tape when setting the bar higher than just identifying opportunities for energy saving, and achieving reductions year on year.”
