EU’s Energy Saving Directive to Reduce Energy Bills

To meet new European Union regulations, companies are expected to measure their total energy consumption or face penalties.
Published: Fri 29 Aug 2014

To meet the European Union’s Energy Efficiency Directive, the UK Government has established the Energy Savings Opportunity Scheme (ESOS).

The scheme requires all large companies (those with 250 or more employees or hn annual turnover exceeding £40 million and a balance sheet exceeding £34m) to complete an audit every four years. Public organisations are excluded from the scheme.

Qualifying companies are expected to measure their total energy consumption across their transport, buildings and industrial activities over a 12-month period. The first report must be sent to the scheme administrator, Environment Agency, by December 5, 2015. The qualification date for the first audit is December 31, 2014. Failure to comply with ESOS could trigger penalties of up to a maximum of £50,000 and/or an additional fine of £500 per day until compliance is achieved for a maximum of 80 days alongside publication of an organisation’s non-compliance.

In addition to the audit, companies have to include recommendations for cost-effective energy efficiency measures that can be undertaken with the estimated costs and benefits quantified.

ESOS to help harness energy potential

It is estimated that energy efficiency recommendations could collectively lead to £1.6 billion savings for businesses – equivalent to a 0.7% average energy reduction – in the period to 2030.

According to the UK’s ex energy minister, Greg Barker, there are many UK businesses that are already committed to energy efficiency. But, he points out that there is still a significant amount of untapped energy potential in the UK economy. He points out that ESOS will assist large organisations to identify savings, thereby reducing their energy bills.

The energy efficiency market

The world economy is becoming increasingly constrained by energy cost, energy availability, and energy-related environmental regulations.

Many countries are looking to shore up their energy supply structure and identify measures to address energy demand issues. On a global scale, buildings (both residential and commercial) account for 35% to 40% of total final energy consumption, according to Navigant Research. Commercial buildings, for example, consume a considerable amount of energy related to HVAC, lighting, water heating, and various other building functions.

With the continued challenge of climate change, more countries are implementing measures that will reduce energy consumption and GHG emissions.

The increasing deployment of energy efficiency retrofits for commercial and public buildings provides an important pathway for increasing energy security, reducing – or even decreasing – energy demand, reducing GHG emissions, and reducing demand for new energy production and distribution facilities.

Energy efficiency retrofits can also be used by commercial building owners and tenants to support greening and green marketing efforts.

Navigant Research forecasts that global revenue for energy efficiency commercial building retrofits will grow from US$68.2 billion in 2014 to US$127.5 billion in 2023.

Don’t underestimate the power of behaviour

While retrofitting does have its place in energy efficiency improvements, a well-designed energy programme like the one at Polytechnic University of Catalonia [Engerati-Spanish University Cuts its Annual Energy Bill by €1 Million Euros] should not be underestimated. The university’s energy efficiency programme prioritises the consumer (staff and students) and focuses on altering habits. The programme was successfully carried out on a very limited budget.

Data analytics company, Opower, also points to the potential of behavioural energy efficiency in a recent webinar with Engerati, Quantifying the Potential of Behavioural Energy Efficiency in Europe.

So, while companies look at purchasing more energy efficient appliances and equipment, they shouldn’t forget to assess their staff’s consumption habits.

Further reading

Navigant Research-Energy Efficiency Retrofits for Commercial and Public Buildings