At DMA Group, we’re excited to be working with the latest innovations in renewable technologies, but true decarbonisation is expensive and must only be embarked on if the foundations of sustainability have been laid. There are some less expensive steps that will immediately make a positive impact to bottom lines and carbon footprints, giving a quick return on investment.
The current energy landscape is challenging, with rising global demand, fluctuating costs, and an urgent need to address climate change. Energy efficiency has become a focus as the world grapples with reducing carbon emissions to meet targets set by Cop28. With fossil fuel resources depleting and environmental impacts intensifying, businesses and governments are under increasing pressure to adopt sustainable practices.
In the UK, there are mandatory environmental targets aimed at the corporate sector, such as the Energy Savings Opportunity Scheme (ESOS). Up until now, the focus of ESOS has been very large private companies, but the phased roll out will soon affect some SMEs and public sector organisations. Businesses that will soon fall into ESOS’ new parameters should consider sustainability as soon as possible. Phase 4 of the scheme opens later this year, and qualifying companies have until December 2026 to register.
Laying the foundations of sustainability
Implementing often expensive renewable technologies without first addressing foundational energy efficiency can lead to underperformance and unmet expectations. For example, a poorly insulated building with outdated heating, ventilation, and air conditioning (HVAC) systems will continue to consume excessive energy, leading to higher operational costs and diminished returns on investment.
There is one exception – solar photovoltaics combined with a battery are a worthwhile investment for any organisation. More on this later!
Step 1: Conduct an energy audit
An energy audit is crucial to undertake before any work is done. This process involves reviewing a building’s current usage, flagging up high energy areas and wastage, prioritising quick wins and elements that need immediate attention. The findings of this audit can then form the basis of a sustainability plan.
At Rye Memorial Hospital, a project we are particularly proud of, an energy audit was the first step in its journey to becoming the UK’s first carbon-neutral community hospital. The audit revealed that a 98% reduction in the hospital’s carbon footprint could be achieved by implementing a variety of strategies. These strategies included a range of Energy Conservation Measures (ECMs) such as installing LED lighting, upgrading fan motors, and adding solar photovoltaic (PV) systems.
For businesses covered by ESOS, conducting an energy audit is the initial step in the compliance process. This establishes a baseline for measuring future improvements. Although the deadline for ESOS Phase 4 is in December 2026, completing an energy audit now is still valid, as the scheme accepts audits conducted from 2018 onwards.
To conduct an ESOS-compliant energy audit:
- Identify Scope: Determine which buildings, activities, and transportation fall under the audit’s scope.
- Data Collection: Gather energy usage data from bills, meters, and monitoring systems for at least 12 months.
- Site Surveys: Conduct physical surveys of facilities to identify energy-saving opportunities.
- Analysis: Analyse energy data to benchmark performance and identify inefficiencies.
- Identify Opportunities: Recommend Energy Conservation Measures (ECMs) to improve energy efficiency.
- Report: Compile a comprehensive report detailing findings, opportunities, and a cost-benefit analysis.
- Review and Certification: Ensure the audit is reviewed by a lead assessor to ensure it meets ESOS guidelines.
More information can be found on the Gov UK website.
Step 2: Prioritise demand reduction
A sustainability initiative should focus on reducing demand through quick and often cost-effective measures. For instance, switching to EC fans can significantly lower energy consumption by up to 60%. Replacing outdated lighting, ensuring that pipes and ventilation systems are clean, and adding insulation are also essential steps to consider.
Step 3: Identify ageing assets
Assets nearing the end of their usable life can be costly to operate and are prone to breakdowns, which increases the risk of downtime for a building. While upgrading these assets can be expensive, waiting for a failure will ultimately lead to higher expense and operational uncertainty. Some of these assets may be repairable, but others will need replacement. When addressing these issues, the best solution may be to invest in more energy-efficient options and replace fossil fuel systems with low-carbon alternatives.
When selecting assets, consider the long-term savings and not just the upfront costs. While the latest sustainable solutions might have a higher initial price, the reduced energy bills and maintenance costs over time can lead to significant savings.
Another important aspect is to choose assets that are compatible with renewable energy sources, such as solar panels or wind turbines. This compatibility not only enhances energy efficiency but also aligns with a broader sustainability strategy. Partnering with reliable suppliers and seeking expert advice can further ensure that the chosen equipment provides optimal performance and energy savings over their lifespan.
Step 4: Monitor everything
It’s important not to overlook how improving workflow and staff management can also support sustainability goals. For instance, ensuring that subcontractors arrive with the right qualifications and tools can prevent wasted time and unnecessary site visits. This efficiency not only streamlines operations but also helps reduce emissions associated with travel.
Our service management platform, BIO®, tracks and manages all parts of a building, including staff and external contractors, leading to ‘right first time’ works and improved sustainability. The platform’s ability to streamline workflows and coordinate resources effectively leads to significant reductions in energy consumption and emissions, contributing to overall sustainability goals while optimising building management.
Step 5: Install Solar Photovoltaics (PV)
Among all renewable technologies, DMA strongly recommends Solar PV to its commercial clients. It offers a rapid return on investment, especially when paired with battery storage. Unlike some other renewable options that might be considered aspirational within a retrofit budget, Solar PV provides immediate cost savings on energy bills due to the current price of electricity. This makes it a practical and economically beneficial choice for improving energy efficiency in a short timeframe.
Solar PV and energy storage systems also enhance energy security by providing a reliable source of power, ensuring a steady supply of electricity even during grid outages. The technology requires minimal maintenance, and advancements in solar panel efficiency and affordability continue to improve their cost-effectiveness. Furthermore, installing solar panels can increase property value, as they are seen as a valuable asset. Overall, Solar PV systems offer considerable economic benefits, while contributing to a more sustainable and resilient energy future.
The future of the ESOS scheme
The ESOS Regulations encourage UK companies to adopt energy-saving measures, with penalties for non-compliance. The registration period for Phase 3 ended on August 6th and was aimed at organisations meeting at least one of the following criteria:
- Employing 250 or more people
- Having an annual balance sheet of £38 million, or a turnover of £44 million.
Phase 4, starting in December 2024, will lower the qualifying thresholds to an annual balance sheet of £18 million or a turnover of £36 million, aligning with the Streamlined Energy & Carbon Reporting (SECR) scheme. Universities may also need to comply if more than half of their funding comes from private sources, as well as those in the public sector.
With Phase 4 expanding the scope to include more businesses and organisations, it’s advisable to begin laying the groundwork for sustainability now. This proactive approach will facilitate a measured, cost-effective strategy, avoiding the rush and potential complications as the deadline approaches.
