Why does this matter? Accurate, accessible data is critical to enabling businesses to make informed decisions that will ultimately change operations to improve performance and profit while reducing energy usage. At the same time supporting businesses on their road to Net Zero promoting long term sustainability.
Jo Horne, Operations Director, JRP Solutions.
As an organisation, we have supported over 80 clients with the preparation and submission of their ESOS notifications. Of these, only one had what we would consider to be readily accessible very good data. A few had quality electricity and gas data but none had complete transport data. Personally, I have not been in contact with a single participant that could locate all the data needed to meet the new Phase 3 obligations. Phase 1 and 2 has prepared most participants to regularly collect and record their electricity, natural gas and other building or process fuel consumption. In stark contrast, data around the various modes of transport has proved to be more of a challenge.
Why has data been such an issue?
1. Timing – The late confirmation of the new reporting obligations on the 29th of November 2023 meant that the extent of data required was not known in advance and this made it difficult for many to locate the data requested to comply with the scheme.
2. Energy intensity ratios – Recent experience has indicated that the new Phase 3 data requirements around energy intensity ratios (EIR) were a stumbling block for many. EIRs were required for buildings, transport and industrial processes where appropriate and can be expressed as one of the following: kWh/m2, kWh/tonne, kWh/litre, kWh/tonne-mile, kWh/person-mile, amongst others.
3. Transport – Most businesses track mileage in their expenses systems to reimburse personnel for grey fleet journeys but make no provision to record start and end odometer readings, so this information was simply not available. Some companies record post codes to confirm journey length, but this is not currently considered to be verifiable information in the ESOS scheme.
For Phase 4, most business will need to review both company car and grey fleet expense policies and recording systems to update functionality to incorporate this new requirement. Similarly, for businesses with freight operations tracking of start and end odometer readings now needs to be tracked along with tonnes transported. This is a much more difficult problem for many businesses that simply don’t track either sets of data at present. In many instances, tonnes of product transported, even for single drop journeys, is often not measured or recorded.
Many businesses have HGV’s that have cover routes with multi drops (sometimes more than thirty) which makes tracking information for tonne miles evaluations extremely arduous and in many cases nigh on impossible. Others have a wide variety of products with each journey transporting vastly different mixes making it impossible to track weights transported cost and time effectively.
4. Data integration In addition to the issues related to tracking and collecting data, it also needs to be recorded in a system that is readily accessible for ESOS reporting. Recent experience has demonstrated, that often within larger businesses, the team responsible for energy data has no relationship with the teams related to the logistics or company/grey fleet. This can be difficult for the team collecting data for ESOS reporting causing delays and often surprises in data quality and assembly.
Often the ESOS teams are completely unaware of the amount of energy used in transport and the 5% de-minimis has been underestimated on many occasions. It is regularly wrongly assumed that the kWh used by transport activity is small and it is often a revelation to find it is far larger than 5%.
5. Production metrics – Even what professional energy managers would consider basic information, for example production throughput, is often not measured, so subsequently not recorded or used as a measure of energy performance. During ESOS Phase 3 it became apparent that many businesses just simple don’t record production metrics.
Of those that do record production metrics there are some industries where production mix is vastly different from month to month, so the information gathered does not provide a good basis to compare year on year energy consumption in relation to production. For example, the maintenance and repair industries product mix is dictated by breakdowns so is unplanned and very changeable. Throughput of tonnes or number of units repaired is not a reliable way to compare performance.
What next?
The ESOS Action Plan deadline is approaching. While the data requirements have been more onerous and wide ranging in Phase 3, this should have helped businesses identify areas for improvement along with key projects that could reduce consumption.
Whilst compliance can be challenging, the ESOS scheme provides a framework for businesses to action the information gathered and put in place plans to reduce energy consumption. This will culminate in the submission of Action Plans by December 5th 2024. The action plans will focus on which energy conservation measures identified in phase 3 will be implemented over the next few years.
What can you do to prepare for Phase 4?
Implementing projects over the next three years will be the next challenge while we await the details of the Phase 4 requirements. Once all the information from the Phase 3 notifications has been analysed by the Environment Agency it will be interesting to see how or if this shapes the data required for the Phase 4 notification.
Until we know the Phase 4 detail, businesses should use the knowledge they have around their current data gaps and make provision to address them to support compliance with the regulation as we know it. Ongoing data gathering and recording is best practice. In many cases new policies and systems will be required to achieve this. Don’t let data gaps lead to non-compliance and don’t leave it until it is too late to put in place the systems you need to enable quality data flow.
Phase 4 qualification will be 31st December 2026 and compliance will be 5th December 2027. As we approach autumn 2024 the qualification data is not that far away. Many businesses will have reported in all the previous three phases so already know they will need to report in Phase 4.
Data is the key, so organisations need to address those data gaps now to reduce effort and support ongoing business sustainability challenges.
Get in touch now to arrange your free data gap analysis or to discuss your ESOS action plan – [email protected], 0800 6127 567.
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