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ESCO-in-a-box aims to help SMEs install energy efficiency solutions

 5 mins | By Karen David
 | Energy | Finance | Sustainability | Jul 2nd 2020

Oxfordshire firms keen to implement energy saving measures into their operations but who struggle to find the time, money and resources, can take part in a pilot scheme to access the expertise and finance they might need.

Low Carbon Hub has teamed up with market analyst EnergyPro and the Environmental Information Exchange (EIE) team at Oxford Brookes University to set up Energy Solutions Oxfordshire (ESOx), a community-based energy services company (ESCO) offering energy efficiency services for enterprises including financial modelling, project management and validation. If successful, the model could be rolled out across the UK.

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Richard Dorey has been appointed business development manager for ESOx, with the task of reaching out to SMEs and understanding the help they need. He says one of the biggest hurdles for firms is identifying what needs to be done to get the best solution for efficiency and cost savings: “This could be as simple as installing LED lighting, better insulation, or simple things like changing their boiler settings.”

When designing the scheme, Low Carbon Hub, Oxford Brookes’ EIE team and EnergyPro recognised that raising capital and the associated risks are major barriers for many firms. ESOx attempts to overcome this by offering a finance package to cover the upfront costs which would potentially be paid for through subsequent savings on energy bills. While these cannot be guaranteed, Dorey explains that the ESOx team carries out the necessary checks to ensure projects deliver the best possible outcomes:

“We put the measurement and validation techniques in place. So when a contractor says it will reduce energy by 30%, we validate the installation to make sure it does, and it will be our job to go back to the contractors to make sure it gets fixed, ie, the project is in good hands,” he said, adding: “It’s all about building trust, so firms feel they have someone to call at any point in the project.”

ESOx is a sister programme to Low Carbon Hub’s OxFutures, an EU-funded programme which has for several years provided energy audits and grant opportunities for Oxfordshire firms. Dorey explains that enterprises who wouldn’t qualify for funding through OxFutures could implement their schemes through ESOx. Some ESOx customers could also be put forward to OxFutures to apply for grants.

Richard Dorey. Pic supplied

Dorey said that one reason he joined ESOx is because he enjoys helping companies to achieve something they didn’t think they would have the resources for: “I was aware that OxFutures would often audit a small business and come up with potential solutions for them to reduce their energy use. It would then be frustrating for everyone that the firm wouldn’t have the time and resources to execute the bigger projects.”

He recounted that ESOx came about when Low Carbon Hub chair Barbara Hammond got together with EnergyPro consultancy MD Alex Rathmell to figure out a way of taking the issues of time, expertise and money away from SMEs. They came up with ‘ESCO-in-a-box’, to take a firm through the whole process – planning, financial modelling, project management and evaluation. EnergyPro is developing the business model, marketing toolkit, financing and insurance backing, to be adopted by local delivery partners when it’s rolled out. There will also be a CRM system to monitor customer journeys.

Dorey went on to say how much he likes to focus on  SMEs: “They’re under-supported. All of the consultants go after big companies because they allegedly have the money,” he said, pointing out that  SMEs take up about 80% of firms in Oxfordshire and, “while some may work from home, they are in industrial units, small office parks and shared offices, places where energy usage is on their P&L. But they have to focus on their day jobs, so if you can help significantly reduce their energy use, it will help their profitability.”

To take hold in Oxfordshire, ESOx is targeting firms with high energy usage (and therefore good potential savings) in their operations, and of these manufacturing and sectors focusing on customer comfort, such as retail and hospitality, are key. Heating systems are by far the largest source of energy use in commercial buildings and therefore offer high potential for efficiency gains. The UK government’s Business Energy Efficiency Survey (BEES) revealed that in  2015, heating systems in non-domestic buildings in Enland and Wales consumed over 120,000 GWh/year, 49% of total non-domestic energy consumption, and four times the energy used by lighting and cooling (30,000 GWh/year each).

Dorey considers that firms who invest in energy efficiencies also see positive responses from their own customers, citing an industrial park he is in talks with: “They see that if they have an environmentally friendly site, they will attract new tenants.”

With a background in telecommunications, Dorey is glad to have made the switch to the low carbon sector and sees Oxford as a place where care for the environment is flourishing.

“It’s amazing how many people there are working in the green sectors in Oxfordshire in one form or another,” he says. “It’s gratifying to see.”

Efficiency measures for firms could mean updating heating controls and boilers to smarter, software-driven solutions, and upgrading insulation. Installing LED lighting and photovoltaic panels are high on the list of high impact measures, along with behaviour changes, employee awareness and switching to renewable energy suppliers.

What ESOx provides

ESOx acts as project manager through the several stages of identifying, installing and validating energy efficiency measures, and oversees the process through these main steps:

Feasibility The SME provides basic information on its building and energy usage, ESOx analyses current energy usage and options for efficiency measures and delivers a desktop report estimating potential costs and savings

Energy report On the go-ahead, ESOx visits the site and generates an energy efficiency report, recommending measures, costs, contractors, and returns on investment.

Implementation ESOx works with the firm to implement measures, arranging finance if required, and manages quality control with the contractor

Monitoring and evaluation Energy use monitoring and ongoing maintenance

ESOx is funded by the UK Department for Business, Energy, and Industrial Strategy through their Boosting Access for SMEs to Energy Efficiency (BASEE) competition, a £6 million fund for solutions to energy efficiency for SMEs and part of the Government’s 2017 Clean Growth Strategy, aiming to help firms to improve energy efficiency by at least 20% by 2030. The consortium also includes Oxford Brookes University’s Environmental Information Exchange, Swiss sustainable energy firm BASE and efficiency specialist Huber Dixon Insurance (Energy Group).

About the Author

Karen David

Karen has a long career in writing and communications in technology, finance and creative sectors in Oxfordshire, the UK and internationally.

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