MPs demand tougher action on ESOS energy efficiency

Written by

Tim Greenhalgh

Posted on

July 22, 2019

MPs are urging the government to toughen up energy efficiency policy, including the Energy Saving Opportunities Scheme to boost chances of meeting net zero targets.

The Energy Saving Opportunities Scheme (ESOS) is a mandatory requirement for qualifying large organisations to carry out energy efficiency assessments once every four years. The audits are of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.

But evidence to the Business, Energy and Industrial Strategy select committee indicates that only 5% of organisations that need to carry out ESOS audits are actually acting in full on recommendations.

The committee’s MPs feel that there is a compelling need for the government to make energy efficiency a national infrastructure priority and that means ensuring full compliance with regulations.

The report also says:

“We are concerned that the Government has set targets for energy efficiency without having a clear grasp of how much public investment is required to meet them.”

The MPs are strident in their criticism of lack of progress, saying that “the government has failed to raise the salience of energy efficiency within business” so that most businesses are unaware of targets, with progress slower than in the residential sector.

Growing concerns

The much tougher stance on ESOS reflects the rapidly growing concerns in Parliament about the lack of progress on energy efficiency as part of wider environmental/climate policy and points to “soft” regulatory conditions.

The committee advises that while qualifying companies have to carry out ESOS audits, with fines for non-compliance, there is no legal requirement to implement the recommendations made.

MPs say they are concerned that the scheme is viewed by businesses as an “administrative burden” rather than an opening to realise energy bill savings and measuring its success has proved challenging due to a lack of public information.

The BEIS committee says:

“The Government should improve the Energy Saving Opportunities Scheme (ESOS) so that it is more obviously geared towards driving business investment in energy efficiency. We recommend that the Government requires ESOS audits to be publicly available and to mandate that businesses in scope of ESOS demonstrate that they have acted on the energy saving opportunities identified.”

It recommends a range of policies to improve performance in buildings, with tougher, mandatory stepped targets up to 2050. It urges immediate actions from government to promote awareness across all business sectors of the fundamental need for energy efficiency in order to decarbonise the economy.

The MPs also want changes to building regulations with tighter standards so that new commercial buildings will not need energy efficiency retrofits from 2025.

They also recommend swift action to agree a trajectory for the ratcheting up of the Minimum Energy Efficiency Standards (MEES) for commercial buildings, assessing the viability in raising MEES for rented commercial properties to EPC Band B by 2035, with milestones of D and C in the lead up time.

However, the committee is keenly aware that MEES only focuses on building design rather than actual performance and so backs the view that the government develop a scheme similar to the National Australian Built Environment Rating System (NABERS).

Spurring action

The NABERS scheme introduced mandatory operational ratings and there have been significant energy productivity gains. At the same time, commercial premises with poor NABERS ratings now attract lower rents, which is spurring property owners to take action.

The report says:

“There is strong evidence that mandatory operational ratings can successfully reduce energy use. We recommend that the government moves to the public disclosure of operational energy data for the commercial sector, and the use of rating tools that focus on performance outcomes, from 2020.”

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