UK’s DECC proposes £1.9bn in energy savings for large firms

The UK Department of Energy and Climate Change (DECC) has published proposals for new energy saving assessments for larger firms in the UK, enabling companies to save money on energy bills and producing a £1.9bn benefit to the UK economy.

The scheme, which is being developed as part of the country’s implementation of the EU Energy Efficiency Directive, will mean large enterprises are required to take Energy Savings Opportunity Scheme (ESOS) assessments in order to identify ways they can invest into energy efficiency in cost-effective ways – helping them to reduce their energy bills and increase competitiveness.

A statement by DECC said the average enterprise taking up energy savings recommendations will invest £15,000 per year into energy efficiency measures whilst benefiting from bill savings of £56,400 per year.

Energy Minister Michael Fallon said, ‘Investing in energy efficiency can hugely benefit our big businesses, helping British businesses get ahead in the global race. Energy saving assessments will show exactly where the biggest savings can be made and if firms then go forward and invest, they will soon see the benefits.

‘There will be no legal requirements to implement the energy saving measures identified, but the assessments could help large businesses, large charities and other large organisations to consider the benefits of investing in energy efficiency.’

Fallon said that if even a small percent of the energy savings are acted upon, huge benefits will be seen regardless. He said, ‘Net social benefits of £1.9bn could be achieved even if 6 per cent of the potential energy savings identified through assessments in buildings and industrial processes are implemented by participating organisations.

‘The new scheme will complement other government initiatives aimed at helping business make investments to improve energy efficiency, such as the non-domestic Green Deal, Electricity Demand Reduction, and Enhanced Capital Allowances for energy-saving plant and machinery.’

But head of climate and environment at manufacturers’ organisation EEF, Gareth Stace, commented that manufacturer’s have already taken significant steps in energy efficiency, and further proposals risk over-legislating the sector.

He said, ‘While the proposals from government on the requirement for a mandatory energy audit are welcome, ministers and officials should not ignore what manufacturers are already doing to address the issue of energy efficiency, which is both effective and valuable.

‘In the last 20 years, UK manufacturers have reduced their emissions by nearly 40 per cent. As an industry we know the importance of energy efficiency in maintaining the competitiveness of UK manufacturing.

‘Any final proposals must take into account the significant differences between targeted sectors, that is commercial, industry and energy intensive sectors. A one-size- fits-all solution will not deliver cost effective improvements in energy efficiency in the manufacturing sector – rather it will create more unwelcome red tape in an already over-regulated and crowded area of policy.’

Posted on Jul 15, 2013.