ESOS Compliance Tips from Enistic, the UK’s leading ESOS Assessors
Darryl Mattocks, ESOS Lead Assessor. Copyright © 2018 Enistic Limited
Some of the clients we look after for ESOS are large. My largest client spends over £250m per year in energy and clients with a spend of several million per year are far from unusual. They are required by law to carry out an ESOS assessment which in theory should save them significant amounts of money on this spend but all too often for clients such as these and other, smaller, clients, ESOS gives them very little or no benefit whatsoever.
The causes of this that I see on a regular basis are two-fold:
- Energy is not important enough to allocate management time to.
– The companies concerned are making too much money elsewhere to bother about energy savings which represent only a comparatively small saving for them; or
– Energy as viewed as a central overhead and is paid centrally by the finance team without sufficient scrutiny.
- Companies don’t have management systems and structures in place to make it easy to achieve these savings.
My plea to companies such as these is to change. It is not difficult and the payback from putting in place sour simple steps is almost inevitably significant.
This article shows you how to get the absolute most from ESOS and helps you ensure that the resource you invest into ESOS pays back significant returns.
ESOS Example 1
One of my clients is a private bank who makes a profit of over £50millon per year. In light of this, the main board director I deal with simply cannot be bothered about the energy saving projects we highlighted which would save them £90,000 per year on their modest (but well appointed) estate. Perhaps if I made this amount each year, I might feel the same way too.
ESOS Example 2
Another client, an extremely large hamburger chain, could save £20,000 per year on the energy used in their head office. The facilities manager at the time simply wasn’t interested in any proposals and couldn’t wait to get back to whatever it was he was doing that was his crisis of the day before we walked in.
Step 1 – Plan
It’s hardly rocket science, and reasonably obvious, but step 1 is that you’ll need a plan.
Start with the director signing off ESOS and ask them what they want to achieve and what resources they are prepared to allocate to the project to make it a success. If the answer to these questions is either “I’m not bothered” or “we can’t spare anyone” the have a look at the article I’m considering publishing later this year entitled “How to save energy with little or no support from management”.
Assuming your senior director is game, start by writing down the following:
- What the target savings are.
- For example, 5% in year 1 compared to ESOS Phase 1 as a baseline, 4% in year 2, 3% in year 3 etc. Make the targets realistic and don’t forget you always look good if you under promise and over deliver.
- Who the energy champion is
- This is the person nominated to coordinate the project
- Who sits on the Energy Team and how often it meets (I meet with some of my clients bi-monthly to help facilitate these meetings and this frequency of meeting works well)
At the first meeting of the newly formed energy team ask the following simple questions:
- What projects can people think of that will save energy?
- What’s the relative payback of each and so what is the priority of each opportunity?
- What does success look like for each project?
- What firm KPIs can we use to measure that success and report against it? (additional sub-metering may be required here)
When setting KPIs it is usual to used referenced measures such as “kWh per tonne produced” or “kWh per staff member” or “kWh per sqft”. Be careful about using KPI’s that don’t include some form of scaling (such a “kWh used last month”) as they can vary from month to month on factors outside of your control. Think of comparing 2 sites with just kWh. If Site A is twice as large as Site B of course it is likely to consume more energy.
Step 2 – Take action
Pretty obviously, if you now have projects, targets and measurement systems in place, the next thing to do is to implement the projects you have come up with.
Simple wins that don’t cost a lot of money are often “soft projects”. These are a great place to start and include things like staff behaviour change, servicing and maintenance interval checks, SAFED driver course etc.
After that, start considering the “hard savings” such as the capital-intensive projects. Typically, these include LED lighting refits, boiler refits, hybrid/electric vehicles, window treatments, insulation improvements etc.
Note that if you don’t have your own capital for these projects, there are several commercial organisations that would be more than happy to lend you the money with the interest and capital payments being less than the savings each month. This means that effectively you get the project implemented for free.
At the time of writing schools could get 5% “off balance sheet” leases relatively easily, large companies 6%-8% and smaller companies 9%-10%. Obviously, banks are likely to be cheaper than this, but the lease/loan will be “on balance sheet” which some organisations do not like or indeed allow. So long as your energy saving opportunity pays back more than these amounts you *should* be able to fund and implement them in a way that gives you operational savings from month 1.
Step 3 – Check your savings against your projected target savings
You have agreed in the last meeting what the measurement KPIs would be and you have put in the required metering/data recording to make sure you can easily measure and report these savings.
More than likely, for electrical items, you will need additional sub-metering (Enistic have been supplying this for over 10 years) or for KPIs based on other energy types, spreadsheets to record the data on a regular basis.
Step 4 – Act
Assuming that 2 months ago you sat down with the energy team and decided what you would do, the thing to do now is to sit down with the Energy Team again and present the KPIs (which you agreed last meeting) with the expected results (which you also agreed in the last meeting) and bath in the warm glow of your success.
More likely however, is that the project hasn’t gone quite to plan, things are running slightly late and perhaps slightly over budget. No matter, this is a chance to reset expectations, update the goals / targets / budgets you agreed last time and minute them.
Take another look at the energy saving project opportunities you have in front of you and agree as a team that the priorities you set previously are still valid, or if they need changing, change them.
If things have gone to plan, you should also now be in a position to give the director who signed off the ESOS project a quantified update on what savings have been achieved and how much that is going to save them.
Keep the information from this project on file and include it in your evidence pack. In my experience, having managed a significant number of Environment Agency Compliance Audits for my clients they don’t ask (care?) much about the savings projects you are implementing (ironic isn’t it?) but it’s always useful to have the information available if they do ask.
- ESOS can be expensive if you view it as simply an additional government tax or a box-ticking exercise. Most of my clients fall into this category.
- ESOS can be a great way your company can save money for you if you engage with the ESOS process and actually do something about it afterwards.
As usual, if you have any questions, please just get in contact, my details are below.
Want more information? Download our guide “Top 5 Tips On How to Make The Most Out Of ESOS”
Enistic help companies manage their energy and have been doing so since 2009. We are market leaders in ESOS auditing, energy monitoring via meters of all forms and we carried out over 2,000 ESOS site audits during ESOS phase 1. We develop and maintain Plato, a cloud-based Energy Management Platform that helps a large number of medium-sized and Enterprise level organisations manage their energy in real-time throughout the world, including several listed companies. We are based in Oxford but have distributors worldwide and have national reach when it comes to ESOS Audits.
If you would like more information about ESOS and see our Top 5 Tips On How to Make The Most Out Of ESOS, click here to download our guide.
Want some help? Speak to Darryl Mattocks
Darryl is the founder of Enistic and has personally been the responsible ESOS Lead Assessor on over 150 ESOS Audits. He advises on how to reduce energy use in over 2,000 sites throughout the UK and is doubly certified for ESOS by two independent ESOS approval bodies. He is an approved ISO50001 Lead Auditor and holds the industry-specific CEM and CMVP qualifications awarded by the Association of Energy Engineers.
He is happy to answer any ESOS or energy management related questions you may have and can be contacted by email at firstname.lastname@example.org or by phone on 01865 598 776.