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Energy Saving Opportunities Scheme Energy Conservation in Business James Cutter Managing Director E-First Surveyors Ltd

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Page 1: RICS ESOS CPD Event

Energy Saving Opportunities Scheme Energy Conservation in Business

James CutterManaging Director

E-First Surveyors Ltd

Page 2: RICS ESOS CPD Event

We had a referendum and the result was a leave majority…...

BREXIT

► Why is this still relevant?► Climate change commitments are part of global

agreements:► Kyoto Protocol► Paris Agreement► Montreal

► Zero Carbon Economy by 2050 remains a commitment► Standards are embedded into UK legislation and regulation:

► FiTs and RHI (renewables)► Climate Change Act 2008 – Tighter targets then EU► 2023 recast of the Act budgeting to 1950 MtCO2e

► The UK has voted out of the European Union, not out of climate change

Page 3: RICS ESOS CPD Event

Energy Benchmarking in Large Undertakings - compliance

ESOS

► E.U Energy Efficiency Directive (2012/27/EU)► Extension and enhancement on EU Directive EPBD

► EED► Translated into UK ESOS Regulations 2012 (Statutory

Instrument 1643)► Mandatory for UK Organisations meeting the criteria► Assessed every 4 years► Environment Agency notified by a set deadline:

► 5th December 2015 - 2019► Legal requirement to conduct post-occupancy

analysis

Page 4: RICS ESOS CPD Event

Energy Benchmarking in Large Undertakings – Why and how?

ESOS

► ESOS is being established by the DECC in response to the requirement for all member states of the European Union to implement Article 8 of the Energy Efficiency Directive.

► DECC now Business, Energy and Industrial Strategy Department

► ESOS Assessment requires three actions:1. Measure your total energy consumption2. Conduct Energy Audits to identify cost-effective energy efficiency

recommendations3. Report compliance to the Environment Agency

► Scheme is estimated to lead to £1.2bn net benefits to the UK, the majority of these being directly felt by businesses as a result of energy savings

► Updated figures suggest that if only 5% of recommendations are implemented a cost saving of £250 million in energy improvements.

Page 5: RICS ESOS CPD Event

Measure Energy Use

ID energy efficiency

and energy management opportunities

Evaluate opportunities

using life cycle cost analysis

Store data and notify scheme

administrator

ESOS What?

Implement Savings and

further disclosure in annual report

Mandatory

Voluntary

Page 6: RICS ESOS CPD Event

ESOS Who qualifies?

Am I part of a group

undertaking?

Does the group undertaking

include in the UK one or more ‘large

enterprise’?

I am Part of a large group

enterprise.

Do I employ 250 or more

employees (Inc. 0 hours)?

I am a large group enterprise.

Do I turnover more than 50m euro and

have a balance sheet more than

43m Euro?

I am a large group

enterprise.

Organizations subject to the

public contracts act

2006 are exempt

The organisation qualifies if, on the 31st

December 2014, it meets the ESOS

definition of a large undertaking.

Page 7: RICS ESOS CPD Event

How to comply?

ESOS

► Measure your total energy consumption across your Buildings, Transport and Process activities.

► Conduct Energy Audits to identify cost-effective energy efficiency recommendations.

► Ensure that 90% of the total energy consumption is subject to an ESOS compliant energy audit, Display Energy Certificate, Green Deal or certified to ISO 50001 Energy Management System

► Unless the total energy consumption is covered by ISO50001, must ensure you employ an ESOS Lead Assessor

► Report compliance to the Environment Agency► By 5th December 2015► Prior to registration the ESOS assessment must be reviewed by a

Board-Level Director and signed off both by the ESOS Lead Assessor and Senior Manager/Director.

Page 8: RICS ESOS CPD Event

Penalties

ESOS

► Failure to notify scheme administrator:► Fixed £5,000► Additional £500 per day until compliant to 80 days max► Publication of details of non-compliance by the compliance body

► Failure to maintain adequate records to demonstrate compliance:► Fixed £5,000► Cost of the compliance body for undertaking sufficient auditing activity

to confirm compliance► Publication of details of non-compliance

► Failure to undertake ESOS assessment► Requirement to undertake ESOS► Penalty of up to £50,000► £500 per day of non compliance and publication of details

► Failure to compile with an enforcement:► £5,000 fixed, £500 per day and publication.

Page 9: RICS ESOS CPD Event

ESOS – Role of the Participant and Lead Assessor

ESOS

Page 10: RICS ESOS CPD Event

ESOS – Routes to Compliance

ESOS

► Measure Energy over 12 month period covering 31st December 2014► Buildings, transport and process► Energy Units (kW/hr) and/or expenditure – not CO2

► Significant Energy Use► Identify and account for 90% of use – conduct audit► 10% can be De Minimis► If areas cannot be identified and defined then 100% requires audit.

► Assessment► ESOS Energy Audit – BS EN 16247 / ISO 50002► Display Energy Certificates if 90% of consumption is covered► Green Deal Assessments (discontinued)► ISO 50001

► Lead Assessor must verify route is compliant and review. Responsibility remains with the organisation to ensure all areas of Significant Consumption audited.

Page 11: RICS ESOS CPD Event

Corporate Group – Highest UK Holding Company

ESOS

Page 12: RICS ESOS CPD Event

ESOS – Industrial / Process Energy

ESOS

► No special circumstances relating to process energy - no exemptions under CCL

► Assessed and is included in the analysis to determine areas of significant energy use

► Audit to BS EN 16247-3 details process► Best point of contact is the manufacturing manager connected directly to

the shop floor► Data can be gathered via data loggers and/or individual three phase

assets► Recommendations focus on Asset replacement and good manufacturing

practices:► Six Sigma, TQM, Lean Manufacturing, 5 S’s, KPI’s such as OEE.

► The factory manager and/or manufacturing manager should have an active improvement programme to adhere to CCL and supply chain demands!

Page 13: RICS ESOS CPD Event

ESOS – Transport

ESOS

► Often the most significant area of consumption► Single office, fleet of 250 cars► Delivery services► Solicitor, Insurance Companies, NHS Mobile Nursing

► Only included when the fuel is supplied, not where a transportation service is provided with fuel via an indirect payment

► Rail tickets, flights – part of operators ESOS► BS EN 16247 – 4► Freight Transportation – Heavy Goods Vehicles

► Collect fuel data to benchmark, using DEFRA conversion ratios► Green Fleet Review, LCRS (Logistics Carbon Reduction Scheme) can

be used when meeting ESOS Energy Audit Process► In = Company Cars, Grey Fleet, LCG, HGV► Out = rail/flight/taxi tickets, commuting

Page 14: RICS ESOS CPD Event

ESOS – Buildings

ESOS

► BS EN 16247-1► Billing information for all sites required, create a total energy benchmark► No set sampling rules for an organisation► Key areas:

► Energy Policy and Management Practice► Building Fabric► Lighting► HVAC► People and Activities

► Owner / Occupier objections► Think outside the box:

► Green Leases, negotiate on sustainability► Create an Awareness campaign► Split benefit► MEES 2018

Page 15: RICS ESOS CPD Event

Environment Agency Results

ESOS

► EA Press release:► 4,000 companies registered by 5th December► 2,500 submitted an intent to comply► Total of 6,500 of 10,000 originally specified► 3,500 letters of notification sent to remaining companies► Extension until June 2016 for those undertaking ISO50001

► The database► 3,969 complied by 5th December► 1,973 additionally registered by extended date of 30th January

► 1,362 registered between the 25th and 30th – 22%!► Extensions approved for companies providing notification► Was this a success?

► 35% unknown► Actual findings to total kW/hrs not published► No gauge on actual Energy Performance Implementations

Page 16: RICS ESOS CPD Event

E-First Surveyors Example Sign Off Sheet – it all comes down to this:

ESOS

Page 17: RICS ESOS CPD Event

E-First Surveyors Top Recommendations in light of LCC or SPP

ESOS

1. People – 2-10% savingI. Energy Awareness in all areasII. Create an awareness campaign

2. TransportI. Driver incentivesII. CO2 Caps and speed limitersIII. Telematics and route optimisationIV. WLC – Whole Life CostingV. CC cap policy

3. ProcessI. Real-Time Performance Management system on shop floor

Page 18: RICS ESOS CPD Event

E-First Surveyors Top Recommendations - LCC or SPP

ESOS

3. BuildingsI. LED Lighting – quickest payback under three yearsII. Target and Monitoring system for multi sites – extended BMSIII. End of life asset replacement with ASHP and 95% boilersIV. VSD for HVAC systemsV. Staff awareness

► What did not balance in terms of payback:► Photovoltaics PV► Biomass► Wind Turbines► Anaerobic Digestion (AD)

Page 19: RICS ESOS CPD Event

Next major Energy Efficiency compliance legislation to be implemented?

What is next? ESOS 2019 and….

► MEES – Minimum Energy Efficiency Standard 2018► April 2018 it will be unlawful to let or sell ND property if F/G EPC rating exists► 2023 for all existing leases

► Proposed for E rating level in line with 4th Carbon Budget.► Property life cycle requires risk management in light of BER – construction to

disposal

► Carbon Budgets reducing and tightening levels► 1st Carbon Budget (2008-2012) – 3,018 MtCO2e – 23% reduction► 2nd Carbon Budget (2013-2018) – 2,782 MtCO2e – 29% reduction► 3rd Carbon Budget (2019-2022) – 2,782 MtCO2e – 35% reduction 2020► 4th Carbon Budget (2023-2028) – 1,950 MtCO2e – 50% reduction 2025

► Increasing targets on building energy performance will be driven under the Climate Change Act.

Page 20: RICS ESOS CPD Event

Questions

ESOS

Thank you for your time this evening, any questions?