Clearly the last few months have seen a serious game change for many, not least the energy sector as it seeks to look to the longer term future outside the EU.
These changes shouldn’t be seen as any sort of excuse for slowing down or not effecting energy improvements. We should do them now and not wait for Brexit!
DECC is dead, long live BEIS!
I will say that I believe the integration of the activities of the Department of Energy and Climate Change (DECC) into the new structure which aligns it with business is potentially very positive. But to succeed it surely needs to learn from some of the major shortcomings of DECC.
These primarily hinged on over-reaching and counter-productive bureaucracy – one has only to look at the myriad rules and regulations underpinning flagship schemes such as the Carbon Reduction Commitment (CRC) and more recently, the Energy Saving Opportunities Scheme (ESOS).
These resulted in significant and unnecessary costs to the sectors affected at a time when margins are tightening for everyone as well as in many cases slowing down, rather than the intended speeding up, of efficiency improvements.
A simple but extensive criticism of the EU and one of many reasons for the wider populace voting to leave it, was the mass of bureaucracy it generated in vain attempts to make “one size fits all” work.
These lessons also need to be learnt very rapidly by the new energy governance powers which needs to be nimble and strident in its aims.
Lean & mean
Following the consultation on how future energy regulation, fiscal treatment and incentives should look, there is a clear need for a simple and minimum cost framework which minimizes the amount of time, effort and expense for industry and commerce. Rather than the onerous burdens placed on them by successive governments.
Too complex, slow, time-consuming, ineffective should become simple, quick, easy and effective.
Higher compliance levels are likely to result from schemes which meet these criteria.
The promised “bonfire of the quangoes” was doused before it was even ignited – maybe time to light the blue touchpaper once again!
Points of focus?
If there was any value in ESOS and the jury is still firmly out on this, it was the mantra that participants should understand where the energy they bought was going and also understand what the economics around opportunities to make savings look like, so that meaningful decisions could be made.
Understanding is critical to the whole process of managing energy, whether on the supply or demand side of the equation.
Energy efficiency, as I’ve suggested on many occasions, is a symptom and indicator of wider business efficiency and is increasingly a factor in customer decision-making – why would you want to deal with an inefficient organisation who, by definition, doesn’t take energy or cost saving seriously?
With much business investment being “parked” pending the development of higher degrees of certainty on the financial outlook of the wider economy, what better time could there be to focus on extensive operational cost reduction?
Energy efficiency fits the bill in every sense of an activity which provides high rates of return on investment, longevity and environmental benefits.
Again, ESOS has demonstrated the massive savings organisations far and wide can potentially make which dwarf other attempts at cost reduction measures. And the opportunities are very clear and attractive.
What’s not to like and what’s everyone waiting for?
Mervyn Bowden is the MD of Intuitive Energy Solutions.