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UK manufacturers failing to take advantage of significant energy efficiency potential

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Manufacturers based in the UK are missing out on significant savings through enhanced energy efficiency, a new report by manufacturers’ organisation EEF has concluded.

The report – ‘Upgrading Power: Delivering a Flexible Electricity System’ – conducted research into energy consumption and various Energy Savings Opportunity Scheme (ESOS) audits and found that by adopting simple energy efficiency measures UK manufacturers could shave as much as 12TWh off their annual consumption.

This, EEF said, was equivalent to roughly 4% of the UK’s entire annual energy usage.

However these savings were not being pursued by manufacturers due to a number of perceived barriers to deployment, particularly an unsupportive policy framework and an apparent failure of the ESOS scheme to resonate with its target audience.

EEF found that just 13% of manufacturers felt ESOS had helped it develop a business case for energy efficiency investment, while 22% said a reformed efficiency reporting mechanism – on which the government has consulted – would help stimulate the market.

ESOS has been much maligned since its introduction in 2015, with businesses that made efforts to comply with the scheme prior to its deadline left irritated by a perceived lack of enforcement from the Environment Agency, the scheme’s administrator.

Businesses can be hit with significant fines for failing to comply with the scheme, however there has yet to be any record of penalties published by the EA.

The report insisted that a lack of take-up was not attributable to a shortfall of potential for energy efficiency investments either. Upgrading Power estimated that energy efficiency could be increased through the adoption of cost-effective measures, notably those with payback periods of 20 months and a “significant proportion” that would require no capital investment.  

EEF has put forward 11 recommendations which it said would help stimulate the market, including the establishment of an annual Energy Statement which would provide greater certainty for future energy policy – already alluded to earlier this year by government – and a “comprehensive assessment” of ESOS and its efficacy.

The organisation has also called for a “fully-fledged” electricity demand response scheme, reforms of Triad and amendments to the Balancing Settlement Code to allow further participation in the balancing market.  

Claire Jakobsson, head of climate and environment policy at EEF, said that manufacturers’ confidence in the government’s management of the energy network was “tepid at best”.

“The last eighteen months have been a high degree of uncertainty in the energy market as a result of numerous policy changes, the Brexit vote and two new administrations in a short period of time.

“Decisions on new nuclear and coal phase out have started to steady the ship, we need a meaningful annual statement that sets out a clear and stable direction of travel for energy policy as part of an overarching industrial strategy.

“Whilst there has been significant attention paid to how we supply our electricity there continues to be too little focus on how and when we use it. Taking action on this will save significant sums of money, both for the system as a whole and companies. The potential is there, but significant reform will be necessary if we are to realise it,” she added.

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