Archive for October, 2014

The new Energy Savings Opportunity Scheme (ESOS) requires UK-based organisations that meet the qualifying criteria – 250+ employees, or turnover of €50m+ and balance sheet of €43m plus – to complete an energy audit by 5 December 2015. The Environment Agency has released details of 13 approved registers for Lead Assessors, but it’s been reported by Energy Live News that just 112 people are currently qualified to approve energy audits for around 10,000 UK organisations. Companies must appoint a Lead Assessor to oversee the ESOS process and confirm that the business has been audited in a compliant fashion. The Lead Assessor may be external or internal as long as they are on the approved register of assessors list. Most companies will have to rely on external consultants, however, which means there’s a risk that demand for Assessors will exceed supply. While the Environment Agency are confident the number of approved Assessors will increase fairly quickly to 1,500+, it’s important that ESOS-qualified organisations start the audit process now as waiting could be risky

  • you’ll need 12 months of accurate energy data, which is much easier to start collecting now than trying to find at a later date
  • there will be pressure on ESOS Lead Assessors this time next year, which in turn could push up the cost of compliance
  • leaving it to the last minute means you may have no choice but to do an expensive full ESOS audit, rather than taking your time to identify the most effective route to compliance, building on existing energy savings measures/policies
  • undertaking an early ESOS scoping assessment will ensure that you opt for the most cost-effective solution, but also the one that identifies the most commercially and financially viable energy savings

The fines for qualifying organisations that do not submit a compliant audit could potentially reach £90,000, incentive enough to start the ESOS process now.

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Energy procurement sounds like it should be a pretty straightforward process, yet there are a number of costly pitfalls that the unwary business can fall into…

1. Don’t wait until you receive your supplier renewal letter: prices fluctuate, so it’s essential to have a long-term strategy that ensures you’re buying when the wholesale energy market is in your favour, not just when your contract terminates.

2. Don’t assume you can get the best price: are you tendering your business to all suppliers, not just the big 6 or your current supplier and a couple of others? With the number of suppliers and complexity of energy products growing all the time, it’s unlikely that most businesses have the time or industry expertise to access the full market and product range, which means you could be missing out on the best product for your business.

3. Don’t forget to monitor your consumption: suppliers price on the basis of predicted demand so its important to understand your energy usage patterns – penalties can also be imposed if you use significantly more or less energy than expected (take or pay clauses), so check those T&Cs as well as your consumption. For businesses implementing energy savings programmes it’s also useful to check that your supply capacity is set at the right level – if it isn’t you could be paying for something you’re not using.

4. Don’t just focus on the unit price: a headline unit price might look competitive, but what about the standing charge, and does it exclude charges such as the Feed-in-Tariff and Renewables Obligation, which other suppliers have incorporated into the unit rate? Commercial energy tariffs are complex, made more so by each supplier presenting their prices differently, so it’s crucial to make sure you’re comparing like-for-like.

5. Don’t assume your energy invoices are correct: billing errors are surprisingly common, yet the complexity of energy tariffs can make it difficult to spot, let alone rectify mistakes. Historic audits can uncover past mistakes, while ongoing invoice validation means you’ll only pay what is due.

 

 

 

A new report by Kingspan Energy claims that the average medium/large British business could save over £31,000 a year by installing fully-funded photo-voltaic (PV) roof-top systems.

The research (using performance data from existing PV installations as well as government figures) also maintains that installing PV on 61% of the 2,500km2 south-facing commercial roof space would generate the equivalent power demand of UK plc.

Fully-funded PV installations avoid the need for businesses to come up with the upfront capital cost of installation, opening up the market for on-site generation. They usually work along the following lines…

  • the business agrees a 25 year lease of their roof space to the PV provider/installer
  • the provider installs and maintains the system, guaranteeing minimum levels of performance
  • the business benefits from the energy generated by the PV system, lowering bills immediately
  • the installer receives the government-paid Feed-in-Tariff which funds the project and provides them with an ROI

These funded PV installations can work very well for those organisations with the right type of south-facing roof space, as they result in energy cost savings straight away with no capital expenditure.