The UK government has launched its proposals for a new energy efficiency scheme targeting businesses, requiring all large enterprises to carry out comprehensive energy audits to identify cost-effective energy saving opportunities.

Energy Savings Opportunity Scheme

Launched as a part of the UK’s implementation of the EU’s Energy Efficiency Directive, the Energy Savings Opportunity Scheme (ESOS) will require all “large enterprises” to have completed their audits by December 5 2015, and every four years from then on.

The ESOS audits must contain a review of overall energy use and performance, including building performance, key industrial operations and transport use.  Crucially, it will have to result in a set of recommendations for cost-effective energy efficiency improvements.

The audits must be carried out by an approved ESOS assessor, who can either be an external consultant or an internal member of staff, officials said.

Benefits to business

But, although the audits are compulsory, take-up of the recommendations are not, leading to concerns that the audits could simply lead to the recommendations being put to one side.

However, the government estimates that the scheme will offer companies the opportunity to save an average of £56,400 per year with just £15,000 of investment in improvements, which will encourage businesses to take up the recommendations.

In addition, DECC suggests that the first audit is likely to cost in the region of £17,000 for an average sized business, and around £10,000 for each subsequent audit every four years, further incentivising businesses to take the plunge into energy savings.

“Investing in energy efficiency can hugely benefit our big businesses, helping British businesses get ahead in the global race,” said energy minister Michael Fallon. “Energy saving assessments will show exactly where the biggest savings can be made and if firms then go forward and invest, they will soon see the benefits.”

The scheme adds to the growing list of energy efficiency schemes currently in operation in the UK, including the CRC programme, mandatory carbon reporting, which applies to all listed UK companies, the EU Emissions Trading Scheme (ETS) and Climate Change Agreements.

The transport energy factor

But unlike the CRC programme and mandatory carbon reporting, which are likely to see the biggest overlap with ESOS, the new programme requires that energy use in transport is taken into account, as well as a set of recommendations for companies to follow.

The government defines large enterprises as businesses with more than 250 employees, and with either an annual turnover of more than €50 million (£43 million) or an annual balance sheet of more than €43 million (£37 million).

Around 7,300 business are expected to fall into the ESOS programme, with between 4,000 and 6,000 already in the CRC scheme. Charities will be included in the scheme, but not the public sector.

The government’s consultation on the proposals [https://www.gov.uk/government/consultations/energy-savings-opportunity-scheme] will close on 3 October 2013, with legislation planned for spring 2014.

Coming soon, Energy Demand speaks to the energy management community about ESOS.