Why Esos was a missed opportunity


blown bulbThe Energy Savings Opportunity Scheme (Esos) has prompted many organisations to think about energy efficiency. But will it spur any actual action? Energy consultancy SMS outlines three factors it believes have significantly undermined the intent of the scheme in this sponsored article.

There’s little doubt that 2015 was a landmark year for energy audits in the UK, with the Government’s mandatory scheme prompting a surge in activity in both private and charitable sectors. Much of the speculation amongst professional bodies, energy managers and the consulting industry has now turned to whether this will make 2016 a landmark year for energy efficiency projects.

This was the point after all. The Esos scheme and the wider audit mandate from the EU Energy Efficiency Directive is based on the premise that once organisations understand the saving opportunities available to them, they will each act according to their self-interest to take advantage.

So will this turn out to be the case? Will outputs from Esos be ‘the great enabler’, to unlock previously hidden potential to reduce bottom line costs? Is it really that simple?

In one way or another, Esos outputs should afford each organisation a perspective on where energy is being used and the technical opportunities available to make savings. Cost and benefit modelling will have been included to provide a range of outline business cases, but will these outputs do enough to empower energy and property managers with a clear and confident sense of direction?

There are some doubts on whether most Esos assessments will meet these challenges. While there are potentially many reasons for scepticism, there are three significant factors that have undermined the intent of the scheme:

  1. The limited consultancy market capacity and short timescale has made room for inexperienced auditors to compete for services. This has been aided by the Government’s dubious decision to license Esos lead assessors from ‘non-professional’ bodies alongside those more established professional bodies.
  2. As the concept of the scheme suggests, there is widespread inexperience in commissioning energy auditing activity. Along with this, a desire for lower cost compliance is likely to have resulted in consultancy briefs that go only a little way to comprehensively identifying and valuing project potential.
  3. Many typical ‘opportunities audits’, while suitable for Esos, do not give detailed attention to organisational capability to deliver projects and do not frame these outputs in a way that can be easily adopted by the commissioning organisation.

The nature of an energy auditing programme has always been open to interpretation and necessarily so; allowing programmes to be tailored appropriately for different industries and operating cultures. It should be little surprise that a scheme that effectively prompts the commoditisation of these audits will lead to outputs which vary in value. Many outputs are unlikely to have considered the practical next steps for management and very few are likely to be ‘investment-ready’.

For the reasons above, the SMS consulting team is keen to discuss Esos outputs with a wide range of organisations. Have the assessments delivered on expectations? Have audits provided convincing technical business cases? What barriers are anticipated in securing an implementation programme?

We want to see the acceleration of energy efficiency in the UK. In this spirit, we will be offering a free second opinion on Esos outputs and are happy to have open discussions on approaches to these outputs into projects. This is an open offer to Esos participants and is intended to help improve confidence for those taking the next steps. Our hope is that 2016 will turn out to be a landmark year for energy efficiency projects, but we suspect it will need a little push.

To discuss this further, please contact us on 02920 739 540 or email us.

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