Transcript Document

Understanding ESOS Thursday 16 April 2015

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Welcome and Introduction Keelin McCone Programme Manager ARENA Network

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RSPB Lisa McAnally Visitor Experience Officer Belfast WOW (Window on Wildlife)

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BITC -Business in the Community NI

RSPB’s WOW, Airport Road West, Belfast Thursday 16 th April2015

Understanding ESOS

the Energy Savings Opportunity Scheme(ESOS)

Judith Wilson [NIEA ESOS Lead] Hugh McGinn

What is ESOS?

Energy Savings Opportunity Scheme (ESOS)

– New UK regulation to comply with Article 8 (4) of the European Energy Efficiency Directive. – Requires all large undertakings in the UK to do energy efficiency audits and notify the Environment Agency by 5 December 2015 that they have complied.

– and thereafter to do the same at least once every four years.

ESOS Vision

• • • • • The scheme is estimated to lead to £1.6bn net benefits to the UK.

The majority of these being directly felt by businesses as a result of energy savings. Improved air quality in the UK.

Stimulate the market for manufacturers and installers of energy efficiency equipment

.

Reduction in traded CO 2 allowances.

As an energy manager what do I have to do?

Simple:

1. Determine if you are in the scheme 2. Measure your total energy consumption 3. Conduct energy audits to identify cost-effective energy efficiency recommendations. 4. Report compliance to the Environment Agency (as the scheme administrator). Or, is it that easy?

Am I In? What is a ‘large undertaking’?

• • Large undertaking* in the UK is defined as:  at least 250 employees; or  an annual turnover in excess of €50 million (£38,937,777 million) and an annual balance sheet total €43m (£33,486,489 million)  If your undertaking is part of a corporate group which includes a large UK undertaking which meets the above criteria you must participate in the scheme Phase 1: Based on your status on 31 December 2014 *An undertaking, as defined in the Companies Act 2006, is: a corporate body or partnership or an unincorporated association carrying on a trade or business, with or without a view to profit

Qualification Criteria definitions

• An Employee : anyone with a contract of employment regardless of hours [zero hour contracted staff are included, as are F/T and P/T employees, manager, owner or partner] • Trade/Business type and amount of energy use is irrelevant if the criteria of a large undertaking is met (as per Section 1161(1) of the Companies Act 2006)- You are in ESOS • If you are subject (mandatorily) to the Public Contracting Regulations 2006 you are excluded from ESOS.

Qualification Criteria definitions (cont)

• • To help determine if you are a large undertaking use last accounts submitted to Companies House prior to 31/12/2014 to determine qualification as a Large Undertaking You may need to go further back if you are near / cross the threshold to get 2 consecutive years.

• A is not required to participate, B is required to participate

UK Organisational structure and impact on qualification for undertakings

For participation B and B1 would form one participant (highest UK parent group), while C and C1 would form another unless they agree to aggregate. A would not be required to participate because it is not an undertaking in the UK.

Changes after qualification

• Changes to organisation size/structure etc after the qualification date do not effect qualification. Once you are in you are in.

• Any organisation / undertaking sold by a qualifying organisation between 31 Dec 2014 and 5 Dec 2015 needs to comply with ESOS (either with old owner, new owner or on their own) • Assets (not organisations) sold or acquired during period 31 Dec 2014 and 5 Dec 2015 do not need to be included in total energy consumption calculation or be audited. But it would be sensible to include them anyway.

I’m in - what am I required to do?

1.

 Conduct ESOS assessment [Measure total energy consumption] Where not fully covered by ISO50001 certification 2.

 Conduct energy audits Where not covered by ISO50001 certification, Green Deal coverage or Display Energy Certificates (partial or full coverage) 3.

4.

5.

6.

Identify energy savings opportunities Use a lead assessor to either do or sign off points 1 to 3 above (unless fully covered by ISO50001) Get a director to sign off that they have seen the recommendations of the work Notify the scheme administrator of ESOS compliance

1. Conduct an ESOS assessment

• • • • Identify total energy consumption ( buildings, installations, transport ) – Total energy consumption data • 12 months consecutive data covering 31/12/14 and end before compliance date 5/12/15 • • • Supplies for all assets covering a specified 12 month period Common units - can use £ or common energy unit (not CO 2 ) Purpose: To determine which assets will need to be covered by compliant audits or alternative routes to compliance Identify 90% of your total energy consumption = ‘Areas of Significant Energy Consumption Determine coverage by ISO50001, Green Deal, DECs, existing audits which meet the ESOS criteria Determine additional ESOS audits that need to be undertaken prior to 5/12/2015

Areas of significant energy consumption

Flexibility about which energy is in the 90% – Could exclude all of one fuel type; or – Certain assets/activities; or – A combination In this example you could Ignore A Service Ltd Concentrate on Transport Logistics

2. Conduct ESOS audit(s)

• • • • • • • • Compliant audits: Use 12 consecutive months’ verifiable data – 12 months data starting from as far back as 6 Dec 2010 Where 12 months data is not used or consumption profiling is not undertaken justification must be provided Audits can have been undertaken between 6 Dec 2011 and 5 Dec 2015 Assets don’t need to have been audited at the same time Analyse your energy consumption and energy efficiency Identify practicable ways in which you can improve your energy efficiency Identify the estimated costs and benefits of the ‘energy saving opportunities’ recommended Purpose - recommend cost effective ‘energy saving opportunities’

3. Identifying savings opportunities from ESOS audits

• • •

Use life cycle cost analysis [LCCA] to determine cost effectiveness rather than simple pay back period where possible Identify recommendations within your control

No requirement in the regulations to implement the identified savings

4. Lead assessor

• Your lead assessor can either: – carry out your ESOS assessment and audits themselves – check that the assessment and audits done by people who aren’t lead assessors meet the ESOS requirements • Lead assessor signs off the work but can use analysis from others i.e. individuals can

undertake these activities and the lead assessor can review them.

Lead assessors cont.

• Lead assessor is an individual that belongs to an approved register • • Approved bodies and registers are on ESOS webpage https://www.gov.uk/energy-savings-opportunity-scheme esos#approved-registers-of-lead-assessors (see last slide) Lead assessors can be internal or external

5. Director Sign off

• Show recommendations of the assessment to a board level director – 1 director if lead assessor is external – 2 directors if lead assessor is internal • Director confirms: – They have reviewed the findings – Organisation is within scope of the scheme – Organisation is compliant – Information provided in notification is correct • No specific format required

6. Notifying the EA

• • • •

Online notification form accessed from ESOS page on .gov.uk

Notification questions are available in Appendix B of the ESOS guidance Provide basic organisation details – not energy data or improvements identified Needs to be submitted by 5 Dec 2015 to be compliant.

Keeping an Evidence pack

• Cost Effective Energy Savings Opportunities Identified • Details of your ESOS assessment and audits (where applicable) • Certifications for alternative compliance routes • Details of any areas where you are not fully compliant with the rules • Record of your director(s) & lead assessors sign off • Records to be kept for 12 years

Summary: Key Dates

• Qualification Date 31/12/14

Do not need to register or tell the EA you qualify

• First Compliance Date 05/12/2015

Tell the Environment Agency you have complied online via .gov.uk webpage

https://www.gov.uk/energy-savings-opportunity-scheme esos#submit-your-esos-notification-of-compliance • And every 4 years thereafter

Summary of Requirement for ESOS

Role of the NIEA

The Environment Agency

is the scheme administrator for the UK. •

Northern Ireland Environment Agency

is the regulator for Northern Ireland based organisations.

We will check notifications for completeness, ie compliance criteria, organisational structure, total emissions and 90% coverage calculations, records, audits and recommendations, director sign off, lead assessor registration.

Follow up organisations who have not notified EA that we believe should have notified EA [We believe there are approximately 300 organisations in NI that are potential participants out of about 9000 UK potential participants].

Issue information and enforcement notices Issue Civil penalties

Non-compliance Failure to notify

Civil penalties

ESOS Regulation Penalties

Regulation 43 A fixed penalty of up to £5,000 An additional £500 for each working day starting on the day after service of the penalty notice until the notification is completed, subject to a maximum of 80 days Publication Failure to maintain records Regulation 44 A fixed penalty of up to £5,000 The cost to the compliance body for undertaking sufficient auditing activity to confirm that an organisation has complied with ESOS Publication The penalty notice may specify steps to remedy the breach

Failure to undertake an energy audit Failure to comply with a compliance notice, an enforcement notice or a penalty notice

Regulation 45 Regulation 46 A fixed penalty of up to £50,000 An additional £500 for each working day starting on the day after service of the compliance notice, until the breach is remedied, subject to a maximum of 80 days Publication The penalty notice may specify a requirement to undertake an ESOS Assessment.

A fixed penalty of up to £5,000 An additional £500 for each working day starting on the day after service of the penalty notice, until the breach is remedied, subject to a maximum of 80 days Publication

False or misleading statement

Regulation 47 A fixed penalty of up to £50,000 Publication

Further info/guidance

• EA ESOS WEBPAGE: https://www.gov.uk/energy-savings-opportunity-scheme-esos ESOS Guidance: https://www.gov.uk/government/publications/comply-with-the energy-savings-opportunity-scheme-esos ESOS Regulations: http://www.legislation.gov.uk/uksi/2014/1643/contents/made ESOS Helpdesk [email protected]

• • • • • • • • • • • • • • •

Approved registers of lead assessors: organisation and name of register

Association of Energy Engineers – certified energy auditor international CEA-I Association of Energy Engineers – certified energy manager international (CEM-I) CIBSE (The Chartered Institution of Building Services Engineers) consultant (LCC) register, ESOS lead assessor subset – CIBSE low carbon ECMK Limited - ECMK ESOS lead assessor register Elmhurst Energy Systems Energy Institute (EI) – Elmhurst approved ESOS lead assessor – chartered energy manager Energy Institute (EI) – register of professional energy consultants (RPEC) Institution of Chemical Engineers (MIChemE/FIChemE) ESOS LEA – register of chartered chemical engineers Institution of Environmental Sciences National Energy Services Limited Quidos – ESOSRegister.com

– IES lead energy assessor - National Energy Services ESOS register Stroma Certification Ltd – ESOS lead energy assessor certification The Energy Managers Association assessor register – EMA energy saving opportunity scheme lead The Institute of Environmental Management and Assessment – environmental auditor and full membership of IEMA (ESOS lead assessor subset) The Institute of Environmental Management and Assessment environmental auditor (ESOS lead assessor subset) – principal

Thank you for your attention.

We will answer any queries during the question and answer session.

Alternatively you can e-mail us directly on [email protected]

Making Sense of ESOS Robin Davey Energy Management Consultant & Lead Assessor RDEEM Robin Davey Energy Management Consultant & Lead Assessor RDEEM

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Routes to compliance

• • • • • • ESOS Energy Audit ISO 50001 DEC ISO 14001 GDA (domestic) GDA (non-domestic)

Note -

The energy usage information provided must be within the compliant period

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Examples of scope and boundaries of the audit

• • • • • • • • •

A multiple retail or office based organisation

How many sites/branches have you? (list) Are they owned or leased? (specify) Do you sublet any premises? (specify) Have you clear and continuous records of energy usage for each site? If not, can you explain why not?

Will you include energy usage from tenants in your figures?

Have you any pro bono agreements with tenants? (specify) Do you intend to include owned transport in your audit?

Do you intend to include energy consumed by company cars and grey fleet travel in your audit?

What will you include in deminimus energy usage?

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Examples of scope and boundaries of the audit (contd) A manufacturing organisation

• • • • • • • • What factories, offices and enterprises are included? (list) What sites are excluded and why?

Are you including transport? (specify vehicles) Does the company sublet part of its premises? (specify) Have you 12 consecutive months of energy usage, electricity, natural gas, oil or LPG recorded for each factory in £ & kWh, litres or tonnes in the case of woodchip/wood pellet?

Have you a list of the products manufactured in each factory?

Are you including company cars or grey fleet vehicles?

What are you excluding under the deminimus clause?

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Requirement/action

Overall responsibility for compliance with ESOS Appoint Lead Assessor Highlight any audit work already undertaken Agree audit methodology for new audits Define scope of audits Agree audit timetable Agree sampling approach Agree number of site visits required Make data available for audit Identify energy saving opportunities Calculate energy/cost savings of measures identified (LCCA or another method, e.g. SPP) Determine energy use profiles Present audit(s) recommendations Review overall ESOS Assessment Obtain director(s)/senior managers sign off of audit(s) findings and recommendations Notify the Scheme Administrator of compliance by the compliance date

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Maintain an ESOS Evidence Pack to substantiate the audit(s)

Participant Lead Assessor

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Key Points

Requirement/action Overall responsibility for compliance with ESOS

Appoint Lead Assessor

Agree number of site visits required

Review overall ESOS assessment Obtain directors/senior managers sign of audits, findings and recommendations

Notify the scheme administrator of compliance by the compliance date

Maintain an ESOS evidence pack to substantiate the audit (s)

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Yes Yes Yes Yes

Company

Yes Yes

Lead assessor

Yes Yes Yes Yes

Key Points

Requirement/action Overall responsibility for compliance with ESOS

Appoint Lead Assessor

Agree audit timetable Agree number of site visits required Make data available for audit

Review overall ESOS assessment Obtain directors/senior managers sign off audit’s findings and recommendations

Notify the scheme administrator of compliance by the compliance date

Maintain an ESOS evidence pack to substantiate the audit (s)

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Yes Yes Yes Yes Yes

Company

Yes Yes Yes

Lead assessor

Yes Yes Yes Yes Yes

Timing

• • • • • • Completion by November 2015 It is now 16 April 2015 The time taken for a completion from a well organised company with no hitches is three months Only a handful of companies have submitted their application for compliance to date The later you leave it, the more it will cost

Start now!

Appoint your lead assessor, start compiling your energy records, and preparing your evidence pack

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Cost (guidelines)

• • The cost will depend on the size, complexity and how well prepared your company is.

Company led audits - Example 1

A medium sized company with one factory or office complex, no subsidiaries or sizeable tenants, it is able to provide: Clearly presented energy data for 12 consecutive months preferably is spreadsheet format A basic planned energy improvement programme

A ball park cost £3,000 - £4,500 If the company has two similar factories or dual site office complexes, this could increase by 15 % - 70%

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Company led audits (guidelines) - Example 2

• • • A medium – large company with multiple offices or similar subsidiary operations. It can provide: Clearly presented energy data for 12 consecutive months for each site/operation. If applicable it will include transport and travel energy usage/cost A good understanding of energy improvement initiatives with a documented evidence of previous and planned improvements

A ball park cost £3,500 - £5,500 Approximately £900 - £1,250 for each additional site/operation requiring a visit (all sites may not require visits)

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Bespoke audit (guidelines) Example 1

• • • • A medium – large company with multiple offices or similar subsidiary operations It has not collated energy information, when pressed for this it is provided as incomplete copies of invoices which have to be checked to see that they are relevant and complete by the lead assessors organisation There is a minimal understanding of energy usage and costs throughout the company There may be complexities and lack of knowledge in the ownership and tenancy of the office or sites in use

A ball park estimate of £5,500 - £6,500 for the main site(s) and £1,000 - £1,500 per additional site or operation analysed and audited

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What you get for your money

• • • •

An evidence* pack containing

Verifiable energy data presented in hard copy and digital form (some companies may refuse to accept third party data storage devices) A list of the sites/operations and evidence of those audited An action plan agreed for energy savings for the next 4 years Where applicable the energy saving initiatives will be costed using either the simple payback method or life cycle cost analysis

* BITCNI will retain a digital copy of the information in the evidence pack

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What you get for your money (

continued

)

• • • • The evidence will be presented in board friendly report * that includes: A summary of the audits and assessments carried out An action plan with a programme of energy saving initiatives agreed between the company contact and lead assessor The projected potential total cost and annual savings in £, energy in kWh and CO 2 in tonnes A proposed programme for checking and recording progress of energy saving initiatives over the next four years

* BITCNI will retain a digital copy of this report We champion responsible business

Key points

• • • • • The report must be signed by one company director (If it is compiled by an internal lead assessor 2 directors) It is the

company

(not the lead assessor) who is responsible for submitting the report for compliance The submission will be done on line, ideally this should be done jointly by the company contact and lead assessor The chosen route(s) to compliance will be clearly identified It would be advisable to allow 1 month for checking and notification by the environment agency after submission of the ESOS report

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Questions

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Thank You

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