2015 ESOS Guidelines Chapter 3 ? The ESOS Assessment

ESOS operates in tandem with the ISO 50001 (Energy Management) system that encourages continual improvement in the efficient use of energy. Any UK enterprise qualifying for ESOS that has current ISO 50001 certification on the compliance date by an approved body (and that covers the entire UK corporate group) may present this as evidence of having completed its ESOS assessment. It does however still require board-level certification, following which it must notify the Environment Agency accordingly.

The Alternate ESOS Route

In the absence of an ISO 50001 energy management certificate addressing comprehensive energy use, a qualifying UK enterprise must:

  1. Measure Total Energy Consumption in either kWh or energy spend in pounds sterling, and across the entire operation including buildings, industrial processes and transport.
  2. Identify Areas of Significant Energy Consumption that account for at least 90% of the total. The balance falls into a de minimis group that is officially too trivial to merit consideration.
  3. Consider Available Routes to Compliance. These could include ISO 500001 part-certification, display energy certificates, green deal assessments, ESOS compliant energy audits, self-audits and independent assessments
  4. Do an Internal Review to make sure that you have covered every area of significant consumption. This is an important strategic step to avoid the possibility of failing to comply completely.
  5. Appoint an Approved Lead Assessor who may be internal or external to your enterprise, but must have ESOS approval. This person confirms you have met all ESOS requirements (unless you have no de minimis exceptions).
  6. Obtain Internal Certification by one of more board-level directors. They must certify they are satisfied with the veracity of the reports. They must also confirm that the enterprise is compliant with the scheme.
  7. Notify the Environment Agency of Compliance within the deadline using the online notification system at snapsurveys.com as soon as the enterprise believes is fully compliant.
  8. Assemble your ESOS Evidential Pack and back it up in a safe place. Remember, it is your responsibility to provide proof of the above. Unearthing evidence a year later it not something to look forward to.

The ESOS assessment process is largely self-regulatory, although there are checks and balances in place including lead assessor and board-level certifications. As you work through what may seem to be a nuisance remember the primary objectives. These are saving money and reducing carbon emissions. Contact Ecovaro if we can assist in any way.

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Systems Integration as a means to cost reduction

System integration in an organisation refers to a process whereby two or more separate systems are brought together for the purpose of pooling the value in the separate systems into one main system. A key component of process consolidation within any organisation is the utilisation of IT as a means to achieve this end. As such, system integration as a means to cost reduction offers organisations the opportunity to adopt and implement lean principles with the attendant benefits. The implementation of lean techniques requires an adherence to stated methods to facilitate the elimination of wastage in the production of goods and services. In summary, the lean philosophy seeks to optimise the speed of good and service production, through the elimination of waste.

While analysing some of the traditional sources of waste in organisational activities, things like overproduction, inventory, underutilised ideas, transmission of information and ideas, transportation of people and material, time wastage and over-processing stand out. The fact is that companies can eliminate a significant portion of waste through the utilisation of IT to consolidate processes within their organisation.

Adopting lean principles calls for the identification of all of the steps in the company value stream for each product family for the purpose of the eliminating the steps that do not create any value. In other words, this step calls for the elimination of redundant steps in the process flow. This is exactly what the utilisation of IT to consolidate processes offers a company. For instance, the adoption of a central cloud system across a large organisation with several facilities could increase efficiencies in that company. Such a company would drastically reduce the redundancies that used to exist in the different facilities, eliminate the instances of hardware and software purchase, maintenance and upgrade, modernise quality assurances processes and identify further opportunities for improvement.

Perhaps, from the company’s point of view, and from the perspective of lean process implementation, the most important factor is?the effect it has?on the bottom line.’reducing the number of hardware, eliminating the need for maintaining and upgrading hardware, removing the necessity for software purchase and upgrade across facilities also contributes to a significant reduction in operational costs.?This reduction in the cost of operations leads to a corresponding increase in the profit margin of the company.

Applying system integration as a means to cost reduction can also lead to the reduction in the number of people needed to operate the previous systems that have been integrated into one primary unit. Usually, companies must hire people with specialised knowledge to operate and maintain the various systems. Such employees must also receive special training and frequent ongoing education to constantly stay informed of the latest trends in process management. With the integration of the system, the number of people needed to maintain the central system will be significantly reduced, also improving the security of information and other company trade secrets.

Based on an analysis of the specific needs that exist in a particular company environment, a system integration method that is peculiar to the needs of that organisation will be worked out. Some companies may find it more cost-effective to use the services of independent cloud service providers. Others with more resources and facilities may decide to set up their own cloud service systems. Often, private cloud service system capabilities far exceed the requirements of the initiating company, meaning that they could decide to “sell” the extra “space” on their cloud network to other interested parties.

A company that fully applies the lean principles towards the integration of its systems will be able to take on additional tasks as a result of the system consolidation. This leads to an increase in performance, and more efficiency due to the seamless syncing of information in a timely and uniform manner.

Companies have to combine a top-down and a bottom-up approach towards their system integration methods. A top-down approach simply utilises the overall system structure that is already in place as a starting point, or as a foundation. The bottom-up approach seeks to design new systems for integration into the system. Other methods of system integration include the vertical, star and horizontal integration methods. In the horizontal method, a specified subsystem is used as an interface for communication between other subsystems. For the star system integration method, the subsystems are connected to the system in a manner that resembles the depiction of a star; hence, the name. Vertical integration refers to the method of the integration of subsystems based on an analysis of their functionality.

The key to successful system integration for the purpose of cost reduction is to take a manual approach towards identifying the various applicable lean principles, with respect to the system integration process. For instance, when value has been specified, it becomes easier to identify value streams. The other process of removing unnecessary or redundant steps will be easier to follow when the whole project is viewed from the whole, rather than’the part. Creating an integrated system needs some?patience?in order to work out kinks and achieve the desired perfect value that creates no waste.

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What Energy Management Software did for CDC

Chrome Deposit Corporation ? that’s CDC for short ? reconditions giant rollers used to finish steel and aluminium sheets in Portage, Indiana by applying grinding, texturing and plating methods. While management was initially surprised when the University of Delaware singled their plant out for energy assessment, this took them on a journey to bring energy consumption down despite being in an expansion phase.

Metal finishing and refinishing is an energy-intensive business where machines mainly do the work while workforces as small as 50 individuals tend them. Environmental impacts also need countering within a challenging environment of burgeoning natural gas and electricity prices.

The Consultant’s Recommendations

The University of Delaware was fortunate that Chrome Deposit Corporation had consistently measured its energy consumption since inception in 1986. This enabled it to pinpoint six strategies as having potential for technological and process improvements.

  • Insulate condensate tanks and pipes
  • Analyse flue gas air-fuel ratios
  • Lower compressed air pressures
  • Install stack dampers on boilers
  • Replace belts with pulleys and cogs
  • Fit covers on plant exhaust fans

CDC implemented only four of the six recommendations. This was because the boiler manufacturer did not recommend stack dampers, and the company was unable to afford certain process automation and controls.

Natural Gas Savings

The project team began by analysing stack gases from boilers used to heat chrome tanks and evaporate wastewater. They found the boilers were burning rich and that several joints in gas lines were leaking. Correcting these issues achieved an instant gas saving of 12% despite increased production.

Reduced Water Consumption

The team established that city water was used to cool the rectifiers. It reduced this by an astonishing 85% by implementing a closed-loop system and adding two chillers. This also helped the water company spend less on chemicals, and energy to drive pumps, purifiers and fans.

Summary of Benefits

Electricity consumption reduced by 18% in real terms, and natural gas by 35%. When these two savings are merged they represent an overall 25% energy saving. These benefits were implemented across the company?s six other plants, resulting in benefits CDC management never dreamed of when the University of Delaware approached them.

ecoVaro offers a similar data analytics service that is available online worldwide. We have helped other companies slash their energy bills with similarly exciting results. We?ll be delighted to share ideas that only data analytics can reveal.

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ESOS What is the Truth?

When the UK administration introduced its ESOS Energy Savings Opportunity Scheme reactions from business people followed a familiar theme.

  • Do nothing it will go away
  • The next Westminster will drop this
  • Another stealth tax. I don’t have time for this
  • Give the problem to admin and tell them to fix it

ecovaro decided to share three facts with you. These are

(1) ESOS is not a government money spinner

(2) all major political parties support it, and

(3) it is a cost-effective way to put money back in your pocket while feeling better about what business pumps into the environment.

Four More ESOS Facts

1. You Cannot Give the Problem to Admin ? Energy is technical. The lead belongs with your operations staff because they understand how your systems work. Some things are best outsourced though. ecovaro is here to help.

2. ESOS is Not Going to Go Away ? A company inside the regulation net must submit its first report by 6 December 2015. Non-compliance risks the following penalties:

  • ?5,000 for not maintaining adequate records
  • ?50,000 for not completing the assessment
  • ?50,000 for making a false or misleading statement

3. The Employee Count is the Annual Average – The employment criteria (unlike balance sheet and turnover) is the monthly average of full and part-time employees taken across the full financial year. The fact you have <250 employees in December 2015 when the first report is due does not necessarily let you off the hook.

4. The 6 December 2014 Report is No Big Deal ? When you think about it the administration is hardly likely to spend years wading through 9,000 detailed company energy plans. It has no authority to comment in any case. All that is required is for a senior director to confirm reading the document, and a lead assessor to agree it complies with the law.

Does this mean that ESOS is a damp squib? We do not think so, although some firms may take the low road. ecovaro believes the financial benefits will carry the process forward, and that the imperative to make the world a better place will do the rest.

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