Despite the recent implementation of the Government’s ESOS legislation, new research from npower Business Solutions shows that British manufacturers are both unaware of and underprepared for the ESOS assessments scheduled to take place this year. The findings demonstrate that although the policy is designed to help large organisations cut their energy use, 49% of manufacturing businesses stated they were unaware of the scheme, while 45% reported being unprepared for the first of the Government’s assessments which are due by December 2015.
ESOS was developed following consultation with businesses and energy professionals. It is designed to help UK businesses become more energy efficient so that they achieve greater savings and greater emissions reductions.
According to the Department of Energy & Climate Change (DECC), implementing some of the efficiencies highlighted by ESOS assessments could save businesses more than £250m a year by reducing consumption by just 0.7%. And where businesses are prepared to invest in measures with a payback period of two years or less, this figure increases to £1.6bn a year. However, failure to comply with ESOS will result in fines of up to £50,000 and possible charges of an additional £500 per day for up to 80 days. Conversely it is not mandatory for businesses to implement any of the energy saving measures the assessments will suggest.
npower spoke to over 100 decision makers at manufacturing businesses across the UK about how they manage their energy use and the extent to which they are prepared for ESOS. The overwhelming majority (62%) are already investing in energy efficiency, and a similar proportion (60%) said they have already conducted their own assessment of their company’s energy use in the past three years. Despite this, and with less than a year until the first assessments, 69% of respondents do not feel well informed about the requirements for carrying out an ESOS assessment.
Wayne Mitchell, head of npower Business Solutions, said: “ESOS may seem like another policy that just brings more costs for manufacturers, but we see it as a significant opportunity to reduce the pressure on your bottom line. Energy is one of the least optimised costs in a business and yet through implementing simple efficiency measures, the average business could reduce consumption by 20%, with a big impact on what you pay for your gas and electricity.
“Nevertheless there are significant shortcomings in the way the policy has been communicated and will be implemented. I strongly believe that if we want to encourage the business community to embrace energy efficiency then we must do a better job of making the case for it to do so.
“I’m disappointed that the ESOS legislation includes a financial penalty for those that do not comply with its requirements, and yet doesn’t make it mandatory for businesses to implement any of the energy saving recommendations that these assessments will produce. As a result I fear the policy could prove to be something of a white-elephant, its potency significantly weakened by the fact manufacturers will see it more as a paper exercise rather than an opportunity to change their relationship with energy consumption.”
Gareth Stace, head of climate and environment at EEF, the manufacturers’ organisation: “Whilst DECC has taken every opportunity to ensure the scheme has remained as straight forward and flexible as possible, many organisations, particularly those at the start of their energy efficiency journey, will find the requirements of ESOS a significant undertaking and will need help in achieving them.
“For many manufacturers that have been concentrating on energy efficiency for some time, the scheme will function as a regular ‘stock taking exercise’ ensuring that momentum is retained and new energy efficient measures are highlighted and taken when possible. For others, the ESOS requirements provide the impetus to map out an energy efficiency strategy from scratch, highlighting the most cost effective measures to be taken and where considerable savings can be made. With energy prices, most notably electricity, set to rise significantly in the coming years, energy efficiency measures remain the most effective and proactive way manufacturers can manage and minimise these increasing costs.”
npower is one of few suppliers with a portfolio to handle the entire journey for ESOS, from establishing eligibility to collecting data, assessing and ensuring compliance requirements are met, then advising on assessment implementation.
