Talking Point: How to cut your energy spend and be carbon compliant

energy in the kitchen 3All EU member countries, including the UK, face mandatory energy efficiency regulation as part of the EU-wide drive to improve energy efficiency by 20% by 2020. The Energy Savings Opportunity Scheme (ESOS), the UK version of the regulation, is now in Phase 2 requiring large hotel chains to submit detailed audited reports on their energy use by December 2019. Paul Lewis, CEO of Carbon Credentials, lends advice on how to tackle what can be an arduous task with tips on cutting emissions to save on your energy bills.

The Energy Saving Opportunity Scheme (ESOS), based on EU legislation (Article 8 of the EU Energy Efficiency Directive), runs in four-year phases and affects up to 10,000 UK organisations including many in the hospitality sector. Now in Phase 2 of the scheme, those with more than 250 staff or annual turnover over 50 million Euros and a balance sheet over 43 million Euros, must submit detailed reports on their energy use across buildings, transport and industrial processes by 5th December 2019 – a time-intensive task which can take many months to prepare.

But whether or not you have to comply to ESOS or an equivalent Article 8 mandatory compliance scheme in your country, it’s important to regularly audit your carbon usage and to implement changes that will drive down energy usage and costs, help to protect the environment, and improve the wellbeing of your staff and guests. Here’s our top tips on how to get the job done.

Plan early

In ESOS Phase 1, Carbon Credentials delivered ESOS compliance for forty-six clients 11% of which were in the hotel and food service sector. Starting early was the key to preparing for these audits – it gave us time to spread the cost of the auditing process across the remaining months, ahead of the compliance deadline and align the auditing programme with other energy review activities within the business like a capex review or an air conditioning audit.  

Planning ahead also gives time to consider your options to achieving ESOS compliance such as ISO50001 as an alternative route to conducting energy audits. ISO50001 is a continual improvement programme, supporting UK organisations to use energy more efficiently through the development of an energy management system (EnMS); a system that could include energy performance improvements such as heat recovery ventilation in leisure areas or staff engagement programmes.

Spend time investigating compliance requirements in your region and what routes are available to achieving those energy standards.

ISO50001 and ESOS also both require Board Level sign off so whatever energy improvement scheme you choose, give yourself plenty of time to engage with a senior board member early in the process. Ideally this would be a Financial Director who would be eager to understand opportunities for saving energy costs in your business. At the start of the process, have an initial meeting to discuss the compliance route agreed and the auditing outputs you expect to achieve such as costs, payback, and Internal Rate of Return (IRR).

Auditing your energy usage

As part of your reporting on energy consumption, qualifying hotels need to identify energy-saving opportunities across their buildings, transport, and industrial processes, which can be an extensive procedure involving:

  • Assessing all relevant organisational structures – are you part of a wider hospitality group, owned by an investment company or have subsidiaries to consider?
  • Calculating and verifying total energy consumption – including any transport data such as staff mileage which tripped up many organisations in Phase 1
  • Undertaking compliant energy audits
  • Creating a robust evidence pack that will stand up to an Environment Agency audit
  • Answering more than 50 notification questions on the Environment Agency portal

You’ll need to engage an ESOS Lead Assessor – a certified and experienced professional who will manage your ESOS programme and sign off on the compliance. Ensure they have the relevant experience; ask for references from previous clients. As an Energy Efficiency industry expert your Lead Assessor will bring a wealth of suggestions and leadership to ensure your ESOS compliance goes smoothly and effectively. 

Act on recommendations

After identifying energy saving opportunities, act on them starting with the quick win, low cost opportunities. During Phase 1 of ESOS, we identified over £53 million worth of energy saving opportunities across 300 audits with often the smallest changes making the biggest impact. Upgrading to energy saving lightening, improving technology and equipment such as air conditioning systems, and getting employees engaged and involved in ways to reduce carbon emissions, were the largest areas of opportunity to radically cut energy costs and emissions. One example, we worked with Village Hotels to save over £500K in their energy costs. Using a simple and smart approach, we started by conducting ESOS audits first before identifying opportunities and then expanded to deliver an energy cost transformation strategy across the group.

So, whatever the auditing procedure is in your country, ensure to follow through on the advice of your auditor. It won’t just cut your energy bills substantially, contributing to a more sustainable environment, but it could deliver significant benefits to the company from improving guest comfort to reducing staff turnover – driving value throughout the entire business.

By Paul Lewis, CEO of Carbon Credentials , a trusted carbon performance and management business.  A member of the board and part of the executive management team, Paul’s purpose is to put a dent in the side of climate change to enable a global low carbon economy.

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