How businesses can make smarter energy decisions

Ever since the Intergovernmental Panel on Climate Change and United Nations Framework Convention on Climate Change were established, the UK has been on a journey – a journey to become a low-carbon nation. The recent announcement of the Streamlined Energy Carbon Reporting scheme (SECR), designed to help businesses as they become more energy conscious, is just the latest stage in this transition.

The SECR is a proposed new reporting scheme from the government. It is set to replace the Carbon Reduction Commitment (CRC), which is due to end in 2019. It aims to use energy efficiency as a mechanism to help increase business productivity. And it will also improve the security of energy supplies, as the goal is to reduce current use by at least 20 per cent before 2030.

So who will this affect and what will it involve?

SECR is aimed at companies with at least 250 employees or an annual turnover greater than £36m, as well as an annual balance sheet greater than £18m. The number of companies reporting into the SECR will include those in the Energy Saving Opportunities Scheme (ESOS), taking the number of businesses involved from 1,200 to 11,900.

If you fall into this category then you’ll be automatically entered into the scheme and your energy use, carbon emissions and energy efficiency actions will be made publicly available, with a suitable intensity metric for reference.

What does this mean for these businesses?

For those who aren’t already on their energy efficiency journey, SECR will likely mean additional administrative costs. But if 20 per cent improvements in energy efficiency can be achieved, that can have its own financial advantages.

So what can businesses do?

An energy management system that encompasses people, process and technology will make reporting for regulatory purposes a much smoother process. But companies should go back to the basics of energy management and analyse their operations to understand the meaningful and sustainable changes they can make.

Here are our six steps to help:

Step 1 – Get everyone involved

Start everyone from across your business talking about energy. Make sure to get buy-in on any new initiatives from your senior management. After all, without their commitment, energy management may falter and can be marginalised.

Step 2 - Write an effective energy policy articulating your organisation’s commitment 

This should: set an objective, define targets, develop an action plan, establish accountability, ensure continuous improvement and ensure compliance.

Step 3 - Assess your energy performance

As they say, “to measure is to manage”.  Understand your past and present energy performance in order to establish benchmarks and begin understanding your energy use patterns and trends. SECR will be a good starting point.

Step 4 - Conduct energy audits

This will help you identify areas of energy savings within your organisation, whether this be by engaging staff, streamlining processes or installing energy efficient technology. Perhaps all three.  So dust off that ESOS report or energy survey or perhaps take a fresh look and audit all aspects that affect energy performance: people, process and technology.

Step 5 – Prioritise 

Make sure to prioritise your projects and get them done.

Step 6 – Monitor the benefits

Keep an eye on the results of your projects and communicate these to your senior management. It might make justifying capital expenditure easier in future if your energy projects have a proven record of delivering savings. So, sit back, relax and reap the rewards…but don’t get complacent, always strive to improve.

Ultimately, the best thing businesses can do is to get on board the energy efficiency band wagon as soon as possible.

Energy efficiency is beneficial to all businesses, including SMEs, as it removes unnecessary costs from your business. By understanding where your starting point is, you are already on your first steps to helping the UK’s clean energy agenda, as well as becoming a more cost-effective business.