For qualifying companies, the deadline for phase 2 of ESOS passed on December 5, 2019.
Some companies have missed this cut-off point after finding the complexities of the compliance process more challenging than anticipated.
Faced with being hit with fines potentially running into tens of thousands of pounds, it is important for those companies to act now.
If you don’t have the time, money or dedicated resource to do this, our highly experienced team can take care of the paperwork on your behalf and help you mitigate those costs.
Here’s a reminder of which companies need to comply:
Those that employ at least 250 people; OR
has an annual turnover in excess of €50 million and a balance sheet in excess of €43 million.
ESOS assessments are carried out every four years and there are five separate UK regulators: Environment Agency, National Resources Wales, Northern Ireland Environment Agency, Scottish Environment Protection Agency and Secretary of State for Business.
The Coronavirus is seeming to have a spiralling effect, causing major disruption to people’s lives in one way or another. It is also having multiple side-effects on the energy industry and the environment, including very turbulent market pricing.
So far, we have seen the following direct impacts on multiple suppliers/companies we work with on a regular basis, some of these include:
A number of suppliers are now only taking emergency phone calls, meaning regular tasks cannot be undertaken.
Suppliers are either not quoting which could result in out of contract rates (OCR) or taking up to 15 working days to quote or not taking on any new clients at all
Western Power Distribution (WPD) has stopped all contracting other than emergency work only, with many Distribution Network Operators (DNOs) set to follow suit.
If businesses are unable to pay bills, and this, in turn, creates a poor credit rating. Energy suppliers will charge a bond as a result which can disrupt cash flows with the knock-on effects potentially felt over the next few years.
Prior to the Covid-19 crisis, Carbon Zero was a major talking point, however, the conversation has gone quiet as short-term thinking has taken over. Personal income and wealth are the primary concerns for people at the moment.
Sustainability on hold?
Many companies had outlined their plans to Carbon Zero targets prior to the pandemic took a grip, which included green energy, renewable energy sources and Electric Vehicles (EV) and installation.
However, since the Coronavirus began it is now estimated that EV battery demand could be downgraded by 4% and solar installations are likely to be 16% lower than previously forecast. It is also expected that 7 in 10 businesses are planning on partially or fully pausing any sustainability announcements.
Many of us are currently working from home or not able to work at all, and that has affected how we communicate with one another. All key green policy meetings have also been postponed and it will be a minimum of six weeks before any UN climate meetings are held in person.
With 16.8 billion people working from home, domestic energy bills could look to increase by £5.2million – which could put a lot of strain on energy providers as well as individuals/family out of work and with no income.
So how does the rest of the world fare?
China has just announced for the first time since going into isolation that they will be relaxing their regulations slightly and allowing individuals involved in the manufacturing sector to go back to work. This could, therefore, cause problems for the rest of the world in terms of energy usage. As their energy output increases and our work decreases, how will this leave us? Will China have the energy they require? Prior to this, China had seen a 25% decrease in its emissions.
Italy has been one of the country’s worst affected by the Coronavirus outbreak, with energy demand on the 18th March recording at being down by 7.45% week-on-week.
Will this ever end?
We all know drastic measures are needed to combat the pandemic, one of which is the cancellation of flights. On the 24th March, we saw 15,650 flights cancelled – the highest number this year.
Another consideration is the number of people – 4.2 billion at the last count – who do not have access to proper sanitation and are unable to follow World Health Organisation guidelines as a result.
What do we expect to see going forward?
In terms of CO2, we could see a similar scenario to the 2008 recession when there was a 6% increase in year-on-year emissions due to businesses and policymakers making up for a loss of productivity. Much depends on the longevity of the lockdown.
Obviously this could have a detrimental impact on businesses attempts to hit their carbon zero targets and the government’s target of being Carbon neutral by 2050.
With a situation where ‘demand is down and supply is up’, oil industry prices continue to suffer in what can only be described as ‘Mad March’.
While the coronavirus pandemic continues to tighten its grip on society leading to a cut in fuel consumption as the global economy slows down, disputes between Saudi Arabia and their rivals has seen the top oil-producing country raise output to full capacity.
Saudi Arabia slashed export prices and said it would pump at a record of 12.3 million barrels per day, flooding the market with oil that it didn’t need. By contrast, producers in the USA’s top producing state, Texas, have asked for regulatory intervention to reduce production.
International crude oil prices LCOc1 CLc1 have dropped about 45% this month and don’t even cover the cost of much of the world’s production, causing energy companies worldwide to drastically rein in their spending. March 9th witnessed the biggest single-day drop of 24%.
The collapse in demand and a diplomatic impasse between Saudi Arabia, Russia and others have triggered unprecedented responses from governments and investors.
With business energy prices fluctuating wildly, knowing when to strike a deal with suppliers has become an art in itself.
Smart energy procurement is one of the main ways in which companies can save money and our expert knowledge and ability to keep track of the markets in these most volatile of times, makes us very well placed to take care of that side of your business.
If you would like to have a conversation with one of our team of consultants, please give us a call on 01225-867722 or visit our dedicated energy procurement page.
Since its introduction in October 2017, Energy Management’s apprenticeship scheme has gone from strength to strength.
Two current employees have graduated from the scheme and now hold key roles within the company, while a third is currently undertaking their Business Administration Level 3 apprenticeship qualification.
Annie Robins and Lewis Payne were appointed as the first apprentices, enrolled through Wiltshire College, and have been shining examples of how the balance of work experience and education can be a win-win situation for employer and employee alike.
Annie is two years into an Account Administration Manager (AAM) role and has recently taken on the responsibility for Supervising the AAM Team’s training and development, while Lewis, in Engineering Support, will be a big loss to the engineering department once he leaves later this year to commence a university degree.
Jac Stone has been promoted from sales support to a Business Development Executive role, whilst undertaking a Chartered Manager Degree Apprenticeship at the University of West of England.
Callum Parsons has recently been appointed to the role of Engineering Support, to work alongside Lewis until he leaves for university. After a period of settling into his new role, Callum will embark on a Junior Energy Manager apprenticeship, with Nationwide Energy Training Services.
Meanwhile, Harry Barter is a Level 3 International Business Administration apprentice.
Personal development is a key component of the scheme which spans both the energy management and water management sides of the business and as a result, the company is looking to open opportunities for upskilling through apprenticeships to all existing staff in areas such as Leadership and Management.
Energy Management CEO Steve Retford said: “All of the apprentices that have come through the scheme so far have done themselves and the company proud and it is a source of great satisfaction to see them flourishing in their roles and adding so much value to the company. We hope to announce more apprenticeship vacancies soon.”
Looking after the health, fitness, safety and education of the nation does not come cheap. In 2019, the figure for powering the public sector was estimated to be an eye-watering £3.4 billion.
Keeping offices, hospital wards, classrooms and leisure centres heated, lit, ventilated and air conditioned contributes towards a large percentage of a local authority’s total expenditure.
Controlling costs is a key focus for councils under financial pressure. Fundamental to this goal is smart energy procurement, even more so in times when the markets are volatile due to a host of geopolitical factors and health-related issues such as the coronavirus outbreak.
Buying energy is not always straightforward but the Choice Energy Framework (CEF), which involves a panel of six pre-selected suppliers, makes it as simple and as competitive as it can be.
With a range of supply parameters to consider (e.g. scope of services, technical capability, procurement mechanism), public sector clients need to have access to easy and ready to use Value for Money resources.
The aim of CEF is to make procuring these services more user-friendly. It minimises the cost of energy procurement while retaining accessibility and transparency.
Approved by The Official Journal of the European Union (OJEU), the CEF enables signed-up organisations to avoid time-consuming form filling and could save them as much as £20,000 in admin fees.
The CEF has been developed by Shepton Mallet Town Council and is being managed by Energy Management LLP.
The result of this is a Framework Agreement designed and procured by the public sector, for the public sector, applicable throughout the United Kingdom.
If you compare business electricity prices from one day to another, they can look very different depending on how bearish or bullish the market is.
On top of all the geopolitical and meteorological factors at play, the coronavirus is an extremely unwelcome addition to an already complex situation.
With the viral outbreak spreading to more countries, the price of oil has dropped markedly as global demand weakens even further due to production cuts in places like China, the source of the COVID-19 disease.
Brent crude, the international standard, dropped 14% for the week to its lowest levels since July 2017, closing Friday at a fraction over $50 a barrel. Cuts in oil production are now being called for by countries such as Saudi Arabia to stabilise demand.
For any energy consultant, such scenarios present challenges, especially around energy procurement, which is why experience is so important in good energy management.
Through years spent in the industry, Energy Management’s energy consultants know the markets inside and out and are across all the news that could impact on our clients’ energy deals.
And this knowledge is complemented by energy management portals such as EM-Powered and its wide-ranging benefits, including the ability to compare business energy consumption over specified periods of time.
That historical data can then be used to help our energy consultants make better-informed decisions on the type of energy procurement right for your business.
For the first time in history, more UK power came from renewable sources than from fossil fuels in the calendar year ending December 2019. National Grid described it as “a historic moment”.
Wind power provides the largest percentage of the UK’s overall renewable energy output, making up 20% of the UK’s electricity following a series of major windfarm openings in recent years.
And with energy derived from solar power around the 6% mark, roughly a quarter of the UK’s renewable energy output is dependent on the right weather conditions.
While the wind is blowing a gale at the moment, thanks to Storm Dennis, that’s not always the case and, as we all know in this country, the sun can never be trusted to shine as long as we’d like it to.
But the vagaries of the weather are not the only strong drivers when it comes to the price people pay for their electricity.
From faulty nuclear reactors to the US-China trade talks and even the assassination of Iranian warlord, Major General Qasem Soleimani, the last few months alone has illustrated how the market is vulnerable to a host of geopolitical issues.
Understanding the market and the mechanisms that may trigger wild fluctuations in price is an important facet of energy procurement.
Right price, right time
A good level of market intelligence – through a combination of experience and accessibility to software such as EM-Powered, the energy management portal – is vital in procuring energy at the right price and at the right time.
Minimising those energy costs through smart energy procurement – and taking the hassle away from clients – is at the heart of what we do.
With over two decades’ worth of experience, Energy Management explores the range of options available to their clients, from a fixed-price, longer-term arrangement that allows for greater security, planning and budgeting, to a more flexible approach, where advantages can be derived from fluctuations in energy pricing.
Speaking literally, our consultants are experts at knowing which way ‘the wind is blowing’, so why not give them a call, on 01225-867722 or email: email@example.com
Energy Management’s Senior Energy Consultant, Malcolm Barrington, gives his verdict on what the immediate energy landscape may look like following the United Kingdom’s departure from the European Union on 31 January, 2020.
We do not expect Brexit to have a dramatic impact on the energy industry overnight. This is principally driven by the ongoing progress of change following the conclusion of the “Electricity Market Review” and the UK’s drive to renewable energy generation.
The UK has already effectively phased out coal from our generation mix, and offshore wind is currently the flagship of our decarbonisation strategy. This has resulted in the UK Green House Gas Conversion Factors for Company Reporting reducing from 0.41205 CO2e/kWh in 2016 to 0.2556 CO2e/kWh in 2019.
A Brexit deal is likely to ensure that we remain in the European carbon market, (EU Emission Trading Scheme ) until at least the end of 2020. This is a bullish driver for EU ETS allowance prices, and for the market as a whole. All the uncertainty surrounding Brexit last year led to no auctions of UK-issued carbon allowances. The allowances will now need to be traded, along with the 2020 allowances, and the flood of UK-origin ETS allowances may at least temporarily depress carbon prices in the EU.
We are closely watching the future of Hinkley Point’s new nuclear power plant build. The agreed price for electricity generated at Hinkley Point is twice the price of energy generated from offshore wind. We believe that Hinkley Point electricity should be subject to a renegotiation and failure to do this could possibly lead to the project being cancelled.
Green issues were discussed in the election like never before, amidst a climate of fear around the future of the planet.
The main parties all stated they want to reduce the UK’s greenhouse gas emissions to net-zero by at least 2050, if not before. While progress on this front has been positive, the UK is still nowhere near meeting its target and the Committee on Climate Change has said radical changes need to happen in the next few years.
Planning for the future
It is hoped that by 2025 that the UK will have a plan in place to replace gas as a source of domestic heating with all cars and vans on the road being electric by the early 2030s.
The withdrawal bill, paving the way for Brexit on the 31st January 2020, is due to have its second commons reading this Friday. In February, a huge reshuffle will occur once the UK has left the EU with an expected budget statement in March.
Once Brexit has taken place, the UK will be released from any renewable energy targets set by the EU. The availability of funding from EU institutions may impact the deployment of innovation or capital-intensive projects.
There are several EU initiatives that promote investment of energy infrastructure and they currently represent an important source of funding for UK energy projects. Therefore, Brexit could leave the UK short of funding or having to look for other means to support renewable infrastructure projects.
Although the UK would still be bound by national and international decarbonisation obligations, it is expected low carbon energy development will carry on forming part of the government’s climate change policy.
In terms of pricing, UK energy prices would be affected if the EU imposes export tariffs on gas flowing to the UK.
Energy procurement is the process in which a business looks for the most favourable energy contracts that enable them to meet their needs.
An energy procurement manager has in-depth knowledge of the industry and spends several hours studying the market on a daily basis to identify price trends and future availability of different types of energy.
Their role also consists of locating vendors, negotiating prices with suppliers, preparing and managing tenders, maintaining customer relationships and managing records.
Monitoring and reporting
Our team continually monitor and report on excess capacity, reactive power charges, kWh fluctuations, VAT issues and mid-contract changes to legislation on behalf of our clients.
On top of this, we produce a Market Intelligence report, monthly insight into all the energy market trends, whilst our bespoke portal, EM-Powered, is another invaluable tool.
This has an in-built early warning system which allows us to protect customers from breaching their contracted and excess capacity levels, thus avoiding financial penalties.
Change of tenancy/expansion
By changing premises or increasing the energy supply to your existing site, due to business growth, can often be complicated and require a large amount of paperwork.
Energy Management deals with all aspects of the network in an efficient manner in order to find out the timescale involved and the best solution for your business.
Here at Energy Management, we pride ourselves on our capability to manage situations in the best way possible for our client to ensure you are not caught out by a change in circumstances.
With over 200 years of combined expertise in the energy industry, our team is highly skilled at providing in-depth analysis of a company’s current and predicted energy usage, supply costs and existing or pending government energy efficiency “taxation” schemes.
Customers often pay over 5% more than they should for their energy through undiscovered errors on their energy bill. Our invoice checking system is very thorough and shines a light on errors, whether this is down to inaccurate meter readings, wrongly applied correction and volume factors or CCL and VAT charges.
We regularly publish articles and market news on the procuring of business energy and, as energy consultants, we offer our clients market-leading insights.