Energy Savings Opportunity Scheme delivered cost savings for over a third of firms, says government

Net cost savings have been achieved by 37% of organisations who qualified for the Energy Savings Opportunity Scheme (ESOS), a new government report has found.

The research, which set out to assess the effectiveness of energy audits across the non-domestic sector, estimates that ESOS has delivered 3.68TWh of energy savings across buildings, industrial processes and fuel.

It also found that the scheme has been responsible for over a third (38%) of energy efficiency measures implemented or planned by eligible organisations.

ESOS was introduced in 2014 to implement an EU Directive, making energy audits mandatory for all large undertakings in the UK. The scheme is now in its third phase.

The report- key findings at a glance

  • 38% of all energy efficiency measures implemented or planned by organisations since starting the ESOS process were attributed at least in part to the scheme.
  • ESOS was most commonly associated with encouraging improvements to lighting or process related measures.
  • 32% of all the fuel efficiency measures that had been implemented or planned by organisations since ESOS were attributed at least in part to the scheme.
  • The energy and fuel efficiency improvements were modelled to have resulted in central estimates of 1.65TWh of energy efficiency savings from buildings, 1.51TWh savings for industrial processes, and 0.52TWh of fuel efficiency savings across the ESOS population.
  • As a new mandatory requirement, ESOS often encouraged audit activity in organisations for the first time. For some organisations, ESOS was attributed with encouraging collation and discussion of data across the business and increasing awareness of energy or fuel consumption and cost.
  • Case study visits to organisations showed that in some cases, ESOS identified entirely new energy saving opportunities. While this was not universal, in other cases the audit remained valuable where it provided external validation of measures that were already planned.
  • 37% of organisations agreed that ‘changes made as a result of ESOS had already led to net cost savings’ for their organisation by the time of the survey. A number of organisations also reported some wider benefits such as increased staff productivity and reputational benefits.
  • The scope for ESOS to have impact is more limited in organisations with existing high levels of energy maturity, such that ESOS-driven action was lower where prior energy management certification, goals or plans were already in place.
  • ESOS compliance generated significant volumes of work for the assessor market around the December 2015 compliance deadline, but there was limited evidence of its influence driving the development of a stable market in the longer-term.
  • Additional support and levers may help organisations to go further in implementing energy efficiency measures. These could include sharing of best practice and publication of benchmarks, public reporting of recommended measures, promoting or incentivising ISO 50001 certification, and maximising synergies with other policies, such as Streamlined Energy and Carbon Reporting (SECR).

Lessons learned for ESOS phase 3

The report also spelled out the circumstances needed for organisations to gain value from ESOS and other audits.

Factors included senior management buy-in, high quality audits and skilled auditors, and reports and recommendations which are relevant and engaging for clients’ contexts.

The report also said that recommendations should contain quantifiable energy savings that can be understood by those from a financial rather than energy background.