After analysing the 320 audits we carried out for businesses during ESOS Phase 1, we identified 13% average kWh savings per organisation. But despite the savings that can be made, many of the energy professionals we spoke to stated that ESOS isn’t seen as a business priority. In fact, just 38% of those surveyed have acted upon the energy saving opportunities identified in Phase 1.
At Inenco, we want to make sure that every business that’s required to comply with an energy reporting scheme gets the most out of their efforts to achieve compliance. So, here are our recommendations for benefitting from energy reporting obligations:
Engage key stakeholders
Engaging senior management in the ESOS process and informing them of the costs savings available from acting on your energy saving recommendations could help you to gain their buy-in. However, it’s also important to engage the rest of your workforce – encouraging energy efficient behaviour and processes is a common recommendation for businesses across sectors, so getting everyone on board is key.
Think about the different ways that ESOS compliance could benefit your business and make sure relevant people/teams are aware of them, as this should motivate them to act. Recouping the cost of regulatory compliance may interest the finance team, for example, whereas those responsible for CSR may want to hear more about potential carbon savings.
For further guidance on engaging key stakeholders, read our guide to building the business case for ESOS here.
Look to the future
When weighing up the cost benefits of acting on your ESOS recommendations, it’s vital to take a forward-looking approach. Energy costs are forecast to continue to rise for all organisations over the coming years, which means that paybacks on energy saving recommendations may be shorter than you expect.
Many organisations will need to think about how to tackle rising non-commodity costs over the next few years – if you’re one of the thousands of businesses that actively avoids Triads, for example, you will need to change your strategy if the Triad scheme is scrapped as predicted. Investing in energy efficiency may offer better returns on capital than investment in core business activities, so will directly benefit the bottom line. Therefore, taking action on your energy saving recommendations may be good business as well as doing the right thing for the environment.
Make a plan of action
It’s likely that your ESOS audit will identify a multitude of opportunities for you to reduce your energy consumption. Energy efficient lighting was a common measure identified in businesses we audited in Phase 1, for example, along with energy management and installation of renewables and CHP.
Some measures will be fairly low-cost and deliver savings quickly – for instance, retro-fitting LED lighting is relatively inexpensive and has an average return period of around 3.5 years. Installing solar panels may require more upfront expenditure, however, and have a longer return on investment. When thinking about which of your recommendations to implement and when, you will need to weigh up what’s viable for your business, and how quickly you will need to see a return on investment.
If your business benefits from a climate change agreement, energy efficiency schemes will also help you to meet your energy reduction obligations, which will ensure that you continue to enjoy the reductions in climate change levy costs at a time when these are increasing dramatically for others.
Reporting schemes can be complex, and organisations’ obligations change so regularly, that even energy managers can find it difficult to fully get to grips with what’s required of them. And when you’re constantly battling to keep up with new requirements, it can be hard to ensure you’re making the most of the opportunities they may present.
That’s why it can be really useful to have external support. At Inenco, our industry insiders stay ahead of future changes to energy reporting schemes, and we work hard to ensure businesses are always fully informed of their obligations.
Visit our Compliance Hub for up-to-date explanations and information about ESOS, SECR and the changing regulatory environment.