ESOS risks raising costs for firms

The energy savings opportunity scheme (ESOS) could cost companies up to £17,000 every four years if they fail to prepare properly, consultancy Ricardo-AEA has warned.

Decc plans to introduce the ESOS in 2015 to meet the requirements of the EU Energy Efficiency Directive. Under the scheme, all large companies – more than 250 employees and an annual turnover exceeding €50 million – will have to complete an assessment of their energy use every four years, with the first audit completed by December 2015.

According to the energy department, firms that implement just 6% of the measures identified by the assessments will save a cumulative £1.9 billion during 2015–2030.

However, Christine St John Cox, knowledge leader at Ricardo-AEA, has warned that the ESOS does not compel companies to act on any of the potential savings identified by the audits.

She says that the first CRC league table published in 2011 revealed that less than 25% of participating companies took full advantage of the scheme by covering a high percentage of emissions with accreditation for carbon reduction and automatic metering. She fears that many ESOS participants will take a similar approach.

“We’re concerned that companies taking a ‘make do’ approach to the legislation will incur the scheme costs, estimated to average £10,000–£17,000 for each business audit cycle, without any financial gain,” said St John Cox. “In our experience of working with companies on CRC, preparation in advance is the key to compliance and unlocking savings in the long run.”

She advised companies to explore options that will minimise cost of ESOS, while making the most of the opportunities presented to improve energy efficiency. “In some cases approaches covered in ISO 50001, the energy management standard, could offer a joined-up route to compliance,” she said. “Other practical steps that companies can start to think about now include how they address transport.”