Manufacturers urged to act on energy savings opportunity

Posted on 9 Apr 2019 by The Manufacturer

New research has found that the manufacturing sector has the greatest potential for energy savings, yet many organisations are failing to act on opportunities to cut cost and carbon.

Energy Savings Power Generation Electricity Bills Energy Increase Non-Commodity Costs Charges - image courtesy of Depositphotos.
Almost two-thirds of all savings identified in the audits from a broad range of sectors were attributed to manufacturers – image courtesy of Depositphotos.

Thousands of manufacturers will need to comply with the Energy Savings Opportunity Scheme (ESOS) by December 2019, completing audits of their energy usage across operations to identify areas to save energy and cut costs.

Ahead of the compliance deadline, a new report into energy reporting by energy consultancy Inenco has combined primary research of business energy professionals with insight from more than 300 energy audits to reveal fresh attitudes to energy and how manufacturers fare against other industries.

Almost two-thirds (60%) of all savings identified in the audits from a broad range of sectors were attributed to manufacturers, highlighting the potential in the sector to make direct savings to the bottom line from energy efficiency.

However, only 50% have acted on their Phase 1 audit recommendations, with budget availability cited as the main reason manufacturers did not act on energy saving opportunities (20%).

It seems the lack of engagement on energy reporting is wider than just ESOS. The survey also revealed that only 29% of manufacturers fully understand the new Streamlined Energy Carbon Reporting (SECR) framework, despite the scheme coming into effect in April of this year.

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The aim of the SECR framework is to simplify carbon reporting and improve energy efficiency in business. SECR requires all UK, large, quoted and unquoted companies, to monitor and publish energy use and carbon emissions in their annual reports. The only exemptions are for those using less than 40,000 kWh of energy in the reporting year.

While installing on-site renewables or Combined Heat & Power was one of the most common areas to cut energy, lower cost measures or those with shorter payback times were also frequently found across manufacturing sites, with lighting topping the table as well as behavioural changes and better energy procurement to reduce costs.

What is the Energy Savings Opportunity Scheme?

ESOS requires all eligible large businesses in the UK (those companies with over 250 employees or a turnover of €50m and a balance sheet of €43m) to undertake mandatory audits by an appointed lead assessor, looking at energy use and energy efficiency opportunities at least once every four years.

The audit has to account for 90% of their energy consumption and the opportunities identified do not have to be implemented

The aim of ESOS is for large businesses to identify energy savings opportunities by compelling them by legislation to conduct energy audits.

Rui Zu, ESOS solutions programme leader at Inenco, commented: “Energy reporting offers manufacturers a true picture of their energy consumption, costs and carbon emissions. However, the benefits of the reporting are only realised when organisations utilise the data and turn it into insight and actions.

“The results of this survey show that only 50% of manufacturers have capitalised on the opportunities made available to them through ESOS Phase 1, undoubtedly impacting their cost base and competitiveness. It is also concerning that over half have not yet commenced their Phase 2 assessments.

“ESOS offers manufacturer the chance to cut energy costs and improve their competitiveness. Acting now to get started on audits means savings could be realised within financial year, offering a boost to the bottom line for all organisations in the industry.”

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