UK manufacturers say Esos not working, DSR too complicated and Triad needs reform


blast-150x150Only 13% of UK manufacturers think the government’s flagship energy efficiency policy, Esos, is helping to improve the business case for energy efficiency investment. Meanwhile, just 9% are involved in demand-side response. Manufacturing body EEF says this is a huge missed opportunity and has called on government to rethink policy and support.

However, its latest report also says businesses should also take the initiative and realise substantial savings by implementing proper energy management.

Doing so, and undertaking low and no cost measures identified by energy audits, would reduce electricity bills by an average of 4%, the report found. Additionally, analysis of 70 member sites identified that using capital expenditure to replace equipment such as lighting, drives and motors, building energy management systems and to optimise compressed air and heating and ventilating systems, would deliver significant energy savings with an average payback of 20 months.

The report points out that in four years’ time around£13bn will be added to energy bills to support low carbon generation and the capacity market. However, says EEF, there is no government support for energy efficiency. It also calls for incentives for smaller companies (SMEs), including tax breaks for energy efficiency investment.

The EEF has suggested a ten-point plan, including fully fledged Electricity Demand Reduction programmes, as well as reforms to the Esos scheme, to drive demand reduction and enable UK manufacturing to become more robust in the face of increasing economic uncertainty. While demand-side response appears to have made significant gains within the capacity market, the report also suggests more work must be undertaken by National Grid to level the playing field for demand-side participants in the balancing markets.

It also calls on National Grid to reform the Triad charging system as part of a broader review of network charging.

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  1. What incentives do businesses really need to tackle this issue? Instruments used by Government, be they carrot-based, stick-based, or a bit of both, tend to be too simplistic, out of date as soon as they’re available, short-lived, ill-conceived, irrelevant to many, bound up in red tape…surely the promise of an average 4% reduction in your energy bill and a 20-month ROI should be enough to tempt even the most miserly and short-sighted organisations to take this seriously?


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