Helping businesses become more energy efficient
Elmhurst has reviewed and will be submitting an official response to the BEIS Call for Evidence ‘Helping Businesses to improve the way they use energy’. This Call for Evidence is seeking views on how a package of measures could be used to support businesses in improving how productively they use energy.
Following on from the Clean Growth Strategy (CGS), published in October 2017, this Call for Evidence forms part of a wider consultation of how businesses can meet the target of improving energy efficiency by 20% by 2030, and covers both commercial buildings and industrial processes.
BEIS notes that:
“We have a stretching ambition to reduce business energy use by 20% by 2030. This is one of the single largest carbon saving measures in the whole CGS, and to achieve the ambitious target will require action across all businesses”.
We agree that the level of ambition from BEIS demonstrates a commitment towards the necessary reductions, but also want to highlight that a consistent approach (irrespective of political leadership), a strict enforcement system, and supplementary policies, will be required if targets are to be met.
Elmhurst intends to reply with the following key messages:
Measures that may reduce energy demand
Elmhurst considered a variety of measures that could be used to reduce business energy use, and concluded that the government should incentivise those who act early on policies and regulations. These regulations should be publicised well in advance to ensure businesses are given ample opportunity to avoid energy saving measures contradicting other business priorities.
We also believe that the government should look to reinstate the ‘pay as you save principle’ to help businesses overcome the barrier of the initial capital investment that is often associated with measures to reduce energy use, and should incentivise those who create their own energy. Although Elmhurst recognises that this final measure does not necessarily reduce the energy used by businesses, it does reduce the demand of the central supply systems and therefore also increase fuel security for businesses.
Differences in sector approaches
Elmhurst recognises that various business sectors will inevitably respond differently to the measures proposed in reducing energy use, largely driven by differences in their operations and priorities. We believe that the energy used by organisations involved in industrial processes will be driven by their production lines which is the key to the success of their businesses- so performance based targets are unlikely to work. Office and retail organisations, however, often have energy use attributed to occupant actions so it may be that education and awareness would be needed in these areas.
Elmhurst therefore considered numerous potential solutions and developed the view that the Energy Saving Opportunity Scheme (ESOS) may be a measure that could work for all business sectors, and could be extended beyond its current scope to incorporate SME’s. ESOS requires businesses to consciously measure, record and disclose their energy use on a four–yearly basis, therefore it provides a key tool to identifying areas of operations and patterns of higher energy use, allowing recommendations for improvement to be highlighted. However, at present, organisations are not mandated to act on the recommendations so Elmhurst propose that from Phase 3 of the scheme (due 31st Dec 2022), businesses should be mandated to implement all zero and low costs options before being considered compliant. This would tackle at least some part of their energy use without an expectation of having to invest heavily.
Voluntary vs. Mandatory standards
It is the view of Elmhurst that voluntary standards are never as effective as mandatory standards because there is rarely an incentive to comply. Though, voluntary standards can be used as an effective stepping stones towards mandatory regulations, providing businesses with the chance to become familiar with the standards before they become a compulsory action.
EPCs and DECs
A large proportion of our draft response is based around assessing the energy use and efficiency of businesses as a whole building/organisation approach, rather than as individual sections. It is our view that completing an EPC and a DEC assessment on a building/organisation allows businesses to understand how their building is performing as well as providing an operational rating to analyse the actual energy use. As a result of the emphasis on whole building/ organisation approach, Elmhurst also recommends that DEC assessments are completed on all buildings, and their validity should be reduced from 10 years for those buildings <1000m² to reflect the ever changing business environments we are faced with.
As a private sector business ourselves, Elmhurst acknowledges the cost and risk approach many businesses have to take towards improving their energy efficiency. The Call for Evidence asked what incentives might help to de-risk the investment into energy efficiency and how approaches in other sectors may be used as examples. Elmhurst considers the publically available specification (PAS 2035), originally designed for the retrofit of existing dwellings, as an approach that may be adopted and replicated for commercial buildings. The specification is provided as best practise for retrofit projects and provides guidance on the durability of buildings, improving energy efficiency, reducing environmental impacts and improving occupancy comfort. It effectively works as a closed loop process and whole building assessment, providing a medium term plan for retrofitting the building.
Elmhurst believes that there is capacity to reduce the energy used by businesses, and that the targets set under the Clean Growth Strategy are achievable. However, we would like to stress that a combination of education, provision of incentives and consistent enforcement of penalties for non–compliance will be key drivers of the transition businesses will make towards improving their energy use.
Our final statement is to address that public sector organisations should be leading by example in minimising their energy use to ensure the private sector, particularly smaller SME’s, do not bear the full cost of meeting the targets.
Elmhurst encourages our members to reply to this call for evidence. If members have any further points they would like us to consider please feel free to let us know, and we will attempt to reflect this in our final response.
Those wishing to respond to the Call for Evidence have until 26th September to do so.
Link to Call for Evidence Info: https://www.gov.uk/government/consultations/helping-businesses-to-improve-the-way-they-use-energy-call-for-evidence
Deadline for response: 26th September 2018