As the deadline for ESOS submissions approaches, energy managers have the opportunity to present at board level the technologies and the business cases to increase their organisation’s profitability. In this sponsored post, Sabien talks about the importance of getting the business case right when it comes to boilers.
As with so many regulations, the Energy Savings Opportunity Scheme (ESOS) can be viewed as a half empty glass, or a half full one. The positive aspect is that it should provide a clearer picture of where energy is being wasted and identify areas where both financial and energy savings can be made and this will be tabled at board level.
However, as with all such cases, one of the key factors is the ability to produce a strong business case for the organisation’s financial team, looking beyond simple payback to assess the full cost benefits.
For example, when boiler load controls such as Sabien’s M2G are installed, the primary financial benefit is a reduction in fuel costs. However, when reduced carbon tax costs (e.g. the CRC) are taken into account, the business case becomes compelling – both from a payback and an ROI point of view.
Consequently, the energy efficiency project may deliver a better internal rate of return (IRR) than other projects within the organisation. Once the financial team and board see this (in their language) it will be hard for them not to allocate the budget and prioritise the project.
Business case benefits
Of course, once the technology has been identified it is important to include a business case realisation phase of the project. To that end, it is vitally important during the planning phase that the client and the technology provider invest time into the measurement and verification plan to demonstrate the ROI to the board following the completion of the installations.
Using the criteria of the International Performance Measurement and Verification Protocol (IPMVP) ensures requirements are fully captured and any variables that are specific to that project are understood by all parties in advance.
One area to focus on is how the savings are being measured and exactly what is being reported as an energy saving. For instance, in the case of boiler controls a percentage reduction in boiler run time is sometimes presented as a saving – this obviously has no correlation to actual kWh or £ saved.
Similarly, a direct comparison of boiler gas consumption between two years (e.g. the most recent winter and the one before it) requires adjustment using degree day data to allow for weather variation.
Where two different periods are being compared, it is also important to assess whether there have been any changes in building usage or any improvements made to the thermal performance of the building fabric during that time.
Many of the ESOS reports will recommend boiler optimisation controls due to their compatibility with other building and boiler controls that may be in use – and the level of savings that can be achieved. Across an estate M2G can deliver average savings of 12% with a typical payback in less than 18 months. With more than 9,500 units now installed within the private and public sectors, M2G has the track record and proven capabilities to be a key technology to drive down energy costs.