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Energy Saving Opportunity Scheme (ESOS) - The Real Deal?

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David Spiteri, Principal Sustainability Consultant at Hilson Moran, discusses the ESOS Energy Audit.

David SpiteriEighteen months have now passed since the launch of the Green Deal, the coalition government’s ‘flagship’ policy aimed to revolutionise the way we improve energy efficiency in existing domestic and non-domestic buildings. 

The domestic sector is off to a semi-respectable start. Interest by homeowners resulted in a quarter of a million assessments lodged from the time of inception of the Green Deal in January 2013, until the end of May 2014. Although only 1.2% of these assessments went on to install energy efficiency measures using Green Deal Finance, the increasing number of assessments demonstrates the appetite for energy efficiency in the domestic sector.

The non-domestic sector is a different story. Actually, I doubt there is any story to tell. Assessing the cost-benefit of energy efficiency measures in non-domestic buildings is a complex task and requires highly skilled assessors. The non-domestic Green Deal assessment does not consider actual energy use; it relies solely on predicted energy consumption through the use of a standardised building energy modelling software. This uses a vastly simplified methodology as a basis for cost-benefit analysis and is, therefore, fundamentally flawed. Trusting this ‘approved’ methodology as the source of large investment decisions is inconceivable to many.ESOS Quote

There is, however, an alternative for the non-domestic sector.

The UK government has fulfilled its obligations under Article 8 of the European Union’s Energy Efficiency Directive through the introduction of the Energy Saving Opportunity Scheme (ESOS). It will soon be a requirement for large enterprises employing 250 or more employees, or those that have an annual turnover exceeding €50m (and/or a balance sheet exceeding €43m), to undertake a mandatory energy assessment. An integral part of this assessment will be the measurement of at least 90% of energy use. This will apply not only to buildings, but also to industrial/commercial processes and transportation.

The ESOS Energy Audit will include recommendations for cost-effective energy saving improvements and will require director sign-off to avoid it falling on deaf ears. Recommendations will aim to directly save energy or lead to an indirect energy saving through improved energy management (such as improved metering). The good news is that with this in place, appropriate methodology will be used to determine potential savings in terms of energy and monetary value.

Sound ideal? Well...nearly. While undertaking an energy audit is compulsory; the implementation of recommended energy efficiency opportunities is not. This begs the question: is ESOS fit for purpose?

ESOS Quote 2Essentially, the success of this scheme will hinge upon the expertise and tenacity of energy consultants. First of all, it is critical to present an independent, comprehensive and robust assessment investigating a series of energy saving opportunities – from ‘easy wins’ (low cost) to the longer term investment opportunities (high cost). Secondly, and perhaps more importantly, energy consultants should have the drive, and ability, to sell these opportunities to the decision-makers in a language that will be heard, generally a monetary dialect.

With non-domestic buildings accounting for nearly a fifth of the UK’s carbon emissions, it is becoming more urgent than ever for Government schemes to start reaping their benefits. Energy saving schemes, such as the Green Deal, Display Energy Certificates and the Minimum Energy Performance standards all play a role; however, serious gaps in their implementation still exist.

ESOS provides the foundation to fill these gaps. Now it is up to the non-domestic retrofit industry to embrace it.

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