Difficulties in managing energy efficiency: Task Group concluding report published

“There have been real improvements in businesses’ energy efficiency, but if we are to tackle climate change and meet the challenges which the Stern Review laid out, more must be done. The changes I am announcing today will make it easier for businesses to get advice on how to save money by being more energy efficient.”

These were the words of Financial Secretary to the Treasury, John Healey MP as he launched the concluding report of the Energy Efficiency Business Support Task Group yesterday (20 December).

Healey announced that, to further improve businesses’ energy efficiency, the Government will consolidate and improve support for businesses, and ensure that government-sponsored organisations are capable of giving the right level of advice to businesses.

Discussing how effectively businesses have adapted to new legal duties to manage energy efficiency (for example Part L (Conservation of Fuel and Power) of the Building Regulations, which came into force in April 2006), Mick Dalton, Immediate Past Chair of the British Institute of Facilities Management comments in the February 2007 issue of Workplace Law Magazine that there is “little awareness of it - there is little awareness of Building Regulations generally. If you surveyed the 1.1 million small-medium companies in the UK I don’t think they would know about Building Regs and that’s a real challenge for building control and for the DCLG [Department for Communities and Local Government]. How do they communicate with those companies? How do they make them comply?”

The practicality, adds Dalton, is that “most FMs get turned off by regulation. Although they have a big role in compliance, if you start to talk about Part L on its own without showing how that relates to FMs or the FM’s activities, most FMs will try to ignore it”.

Research presented in the same energy special issue of the magazine reveals that FMs have traditionally struggled to demonstrate a strong business case for introducing measures to manage energy. The arguments against investment include energy efficiency not rating high as a business priority, or senior management being put off by the initial outlay involved, or companies believing they lacked the time, skills or resources needed.

However, in 2006 there has been a seismic shift in attitudes to energy management. The appearance of the Stern Report in November, unprecedented wholesale prices, new measures to combat climate change and stakeholder pressure on businesses to become better corporate citizens have kept energy at the forefront of commercial energy users’ minds.

Dalton argues that you have to get staff buy-in in order to effectively manage energy. He says: “People perceive energy management as a cost, but there are lots of no- or low-cost actions that FMs can take. A lot of it is down to human factors – you can make a 20% saving by taking control of what you’ve already got…You can install time switches to turn off the lighting at nights and weekends. You can turn the heating down by one degree. You can have a staff awareness campaign and talk to IT about getting the energy saving option on computers switched on.”

This week businesses have been urged to pay particular attention to conserving energy and ensuring switch things off before they leave work for the Christmas break: new research found that the energy used by equipment left on standby over the festive period is enough to roast 4.4 million turkeys!

What controls exist on energy use?
The signing of the 1997 Kyoto Protocol forced business to take climate change seriously.

Building Regulations
The Building Regulations have set new standards for energy efficiency in new buildings since April 2002 and the latest revisions have led to some key changes in Part L and Part F to coincide with the implementation of the Energy Performance in Buildings Directive (EPBD), from April 2006.

The underlying requirement of the regulations is to reduce the energy consumption as measured by the total annual carbon dioxide emissions (kg/m2 of gross floor area). For non-domestic buildings, the general requirement is to reduce the energy consumption by 20% (for air-conditioned and mechanically ventilated buildings), 15% (for naturally ventilated buildings) and to make a 10% renewable contribution (where appropriate).

The Climate Change Levy
The Climate Change Levy (CCL) is a tax on downstream energy use in industry, commerce and the public sector. It is offset by cuts in employers’ National Insurance Contributions of 0.3 percentage points, and additional support for energy-efficiency schemes and renewable sources of energy, e.g. solar and wind power.

The Climate Change Levy on commercial and industrial energy supplies has significantly increased bills (if a company is paying 5p per kilowatt-hour of electricity, the levy will add a further 11.5%). If current rates do not produce the behavioural change in consumption the government wants, it is likely the levy will be increased. The levy package is expected to lead to reductions in carbon dioxide emissions of at least 2.5 million tonnes of carbon a year by 2010.

Underpinning the Climate Change Levy are a complex series of more than 40 negotiated agreements with industry designed to cushion the impact on more energy-intensive sectors and assist their competitiveness. Under these Climate Change Levy Agreements (CCLAs), some 12,500 sites have agreed targets to reduce their energy use in return for an 80% discount on the levy.

Organisations that pay the Climate Change Levy can enter into agreements with suppliers to purchase renewable electricity. The Levy Exemption Certificates (LECs) are evidence of a CCL-exempt electricity supply generated from qualifying renewable sources.

Energy Performance of Buildings 2006: Special Report
This comprehensive new special report will help you get to grips with energy performance in your buildings, understand your legal responsibilities, help you spend budgets wisely and streamline costs.