Large companies to be forced to implement energy efficiency

Shadow Chancellor Ed Balls last night criticised the Government for not doing enough to promote energy efficiency.

Proposals for an Energy Savings Opportunity Scheme (ESOS) have been published by the Government that will make it compulsory for large companies to undertake energy audits.

The aim is to enable companies to identify opportunities for saving on their energy bills through improved energy efficiency. The Department for Energy and Climate Change (DECC) estimates that up to £1.9 billion could be saved.

The proposals form part of the Government's implementation of the EU Energy Efficiency Directive, under which large enterprises have to identify cost-effective ways to invest in energy efficiency. These ESOS assessments will be carried out by approved assessors.

The proposed scheme would apply to all large enterprises in the UK, including charities and any other UK organisations outside the public sector, if sufficiently large. Small and medium enterprises (SMEs) will not be required to participate, unless they are part of a large corporate group enterprise, but could do so on a voluntary basis.

An ESOS assessment would undertake a review of the total energy use and energy efficiency of the organisation, including the measurement of an energy intensity ratio (e.g. energy use per employee or per unit of output) and, as appropriate, considering the variation in energy use over time within key buildings, key industrial operations, and key transport activities (exempting de minimis energy use).

The review would need to be proportionate and sufficiently representative “to permit the drawing of a reliable picture of overall energy performance” of the organisation and present clear information on potential savings, which identify and quantify cost-effective energy savings opportunities.

These should be, wherever practical, based on life cycle assessments (LCA) instead of simple payback periods (SPP), as the former are more realistic.

All procedures for doing this are outlined under the international standard for energy management, ISO 50001, with which all energy and facility managers are encouraged to become competent.

The Government has come under sustained criticism recently for failing to do enough to promote energy efficiency.

Last night, speaking at a Green Alliance event, promoting their report, which said that £180 billion of new infrastructure is at risk without political leadership, the Shadow Chancellor, Ed Balls, promised that Labour, if elected, would set a decarbonisation target and do more to promote energy efficiency.

He attacked the Chancellor George Osborne for “scaring away” green investment in infrastructure and energy efficiency.

He said that on energy efficiency the government had “failed to deliver. The construction industry is crying out for clarity on the next steps in Labour’s successful zero-carbon homes strategy. The Green Deal, which replaced previous successful domestic energy efficiency schemes, has so far helped just four households this year".

He added: "We will also put an end to the mixed signals that are causing confusion and deterring investment by posing a false choice between gas and renewable energy. We support efforts to secure new domestic gas supply, although there are real environmental concerns that must be addressed. We will need a secure gas supply in the decades ahead.

"But while 'fracking' has had a major impact on energy prices in the US, most experts believe any impact in Europe is uncertain at best. Any balanced and low-carbon energy strategy for the years ahead will need gas, renewable energy and, in our view, nuclear too," he concluded.

DECC's consultation will close on 3 October 2013.


Shadow Chancellor Ed Balls last night criticised the Government for not doing enough to promote energy efficiency.