Energy

Efficiency
Manifesto

COP26

12.11.2021 1
Saving the planet the easiest way – using
long established, high value, faster pay back
energy efficiency solutions

Summary
Our message in this document is simple. In a world challenged by
major energy market disruptions, and the struggle to preserve its
own future; energy efficiency makes total sense. Using less energy and
using the energy that you have to use more effectively, has to be a key
approach. Energy efficiency should be the start of every net zero journey.

Background
With COP26 high in the public consciousness and the world working harder
than ever on reducing emissions and reaching targets, both voluntary and
enshrined in legislation, there is a major focus on the solutions that exist. So
many of the solutions being discussed encompass huge costs and, in many
cases, potentially damaging knock-on effects to other parts of the eco-
system - not to forget the need for technology that hasn’t been invented yet!

As we approach our 40th anniversary in 2022, ESTA is proud to have

facilitated this Manifesto. We believe that the very fact that we are 40 years
old confirms that energy efficiency solutions, unlike many other energy
transition solutions, have stood the test of time. They are proven, cost
effective relative to the alternatives and very often offer rapid investment pay
back.

We know that planning around Net Zero, carbon and greenhouse gas
emissions needs to be long term. Regrettably, as has been proven time
after time with previous schemes, political imperatives can discourage this
planning being tied into effective long-term policy.

Ideally therefore, efforts to ‘save the planet’ need to be decoupled in some

way from the time frames imposed by the demands of political activity.

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Existing suite of solutions
We believe that the current group structure of ESTA reflects
the various energy efficiency solutions currently available:

Automatic Monitoring and Targeting (aM&T) group

Scope
The ESTA aM&T Group provides a dedicated trade body to support ESTA
members who provide a range of products and services targeted at measuring,
acquiring, managing, processing, and analysing energy data in the pursuance
of energy efficiency.

Ethos
The aM&T Group is all about achieving that strong foundation of energy data
necessary to make informed decisions regarding energy and cost reduction.
Its values include not only the professionalism which its members demonstrate
to clients, but also a willingness to work with other members so as to form a
strong link in what is often a chain of products and services required to effec-
tively take a client from initial measurement to full understanding.

Energy Services Contracting Group

Scope
The ESTA Energy Services Contracting Group provides a dedicated trade body
to support energy service companies and associated service providers in the
development and delivery of effective Energy Services Contracting (ESC)
projects.

Ethos
The group supports an effective, professional and transparent approach to
managing Energy Services Contracting projects.

Effective: Professional: Transparent:

achieving and bringing together providing clear and
maintaining significant experienced service concise information
energy and cost savings providers to achieve about contractual
in an economically and maintain a good arrangements and
efficient manner. working relationship with performance – both
customers. projected and verified
actual – on a regular
basis.
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Independent Energy Consultants Group (IECG)

Scope
IECG members provide the expertise to assist organisations with all aspects of
energy procurement, management, standards, and legal compliance.

They have no exclusive commercial relationships with any utility or equipment

suppliers and therefore provide the best independent advice.

Ethos
IECG member services include:

Energy Procurement Support with Energy Standards:

1. purchasing. 1. ISO 50000 series.

2. invoice validation.
Compliance with Energy Legislation:
3. historic invoice audits
1. Energy Saving Opportunity Scheme
(ESOS).
Energy management
2. Carbon Reduction Commitment
1. Energy/carbon reduction policy and strategy.
(CRC).
2. Energy audits to identify energy/carbon
3. EU Emissions Trading Scheme
reduction opportunities.
(EUETS).

Implementation of ISO 50001 4. Climate Change Agreements

(CCA).
1. Feasibility studies.
5. Energy Performance Certificates
2. Project implementation from funding and
(EPCs).
tendering support to commissioning.
6. Energy Performance in Buildings Directive
3. Energy Savings Verification
(EPBD).
(ISO 50015 and IPMVP).
7. Air Conditioning Inspections
4. Monitoring and targeting.
(CIBSE TM44).
5. Training.
8. Building Research Establishment
6. Implementation of routine energy reporting Environmental Assessment
schemes.
9. Method
7. Operational improvement including controls (BREEAM)
optimisation and re-commissioning.

8. Software development.

9. Thermal Modelling & Imaging

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Smart Buildings Group (SBg)

Scope

Definition and identity of group

The Smart Buildings group (SBg) provides a useful forum in which industry
peers can discuss upcoming legislation, input into government policy, and help
educate and provide best practice to the business energy demand side sector.

The Smart Buildings group (SBg) encompasses demand side industry sectors
with an interest in:

• Wireless ecosystems

• The Internet of Things

• Smart building materials

• Lighting – installation, control & retrofit

• Energy Saving Controls – heating, ventilation, and air conditioning (HVAC)

• Building energy management systems (BEMS)

• All other building controls associated with energy saving measures.

Ethos
The group supports the effective, professional and transparent approach to
supplying products and/or managing Energy Saving projects.

Effective: Assisting the end user to achieve and maintain significant energy
and cost savings in an economically efficient manner.

Professional: Provide a level of customer care that enhances the reputation of

the industry.

Transparent: Providing clear and concise information about expected energy

savings through the use of technology

Behaviour change working group

This group has set up and run an extensive global behaviour change energy
efficiency programme working with the Energy Institute in the UK – The Energy
Conscious Organisation

www.energyconsciousorganisation.org.uk
In our opinion, the use of behaviour change as an approach to maximising
energy efficiency has never been fully utilised. It has taken a great deal of work
to convince the UK Government of the efficacy of behaviour change.

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We would stress that the holistic approach is not just about turning off light
switches and unused equipment, but in a world where technological solutions
to controlling energy usage in buildings continue to grow apace, it is important
to ensure that people know how to programme the equipment they have,
ensure that the equipment is as up to date as possible and then know how to
interpret the data they receive to make the best possible usage of that data.
To enhance the scientific approach to the programme, the ambition is to use
IPMVP – the International Performance, Measurement and Verification Protocol
- when measuring the energy savings.

The programme aims to:

Train up people who

can deliver behaviour
change programmes.

Support and certify

Energy Conscious
Organisations.

Provide ongoing
support and resources
to practitioners and
consultants operating
in the field.

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Methodology
The plan of action
“To limit the most damaging impacts of climate change, we need to
reduce greenhouse gas emissions globally and adapt to the current
and future changes in the climate.”

(Climate Change Committee)

The following are key action points explored deeper within this
section of the Manifesto:
1. International agreement to apply Energy Hierarchy to legislation,
taxation, work incentives and priorities

2. Prioritise Energy Efficiency measures over support to renewable

energy. Incentives on renewables should be weighted on export not
generation to encourage efficiency

3. Implement International framework for defining a common M&V

approach for Scope 1 and 2 emissions

4. Apply common standards for reporting emissions in the supply of

goods and services (Scope 3)

5. UK on the Global stage – industrial strategy – Go further, think bigger

6. Energy policy touches every aspect of our lives and is central to

delivering the green (economic) recovery. A “green recovery” implies
returning old activity levels whilst changing the “rulebook.” These
changes need to be explained.

7. We need a simple, clear and coherent global framework to negotiate

conflict priorities, and support common “valuation” of embedded
emissions. And to maintain public support and engagement.

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1. Energy Hierarchy
The energy hierarchy:

Energy Conservation
Energy Efficiency
Embrace Renewable
Sustainable Resources
Exploit Low-Carbon Technologies
If the Energy Hierarchy had been followed, UK energy policy could have been
more effective. We must:
• Focus much more on demand-side energy conservation and efficiency measures

• Include statutory targets on energy demand reduction

• Provide a long-term framework giving investment signals for businesses to

deliver major energy system change

• Apply the Energy Hierarchy to rebalance Government policy priorities

• Prioritise investments in Energy Efficiency over investment in new renewable

• Enable global best practice energy technology and associated services to better
enable global energy efficiency.

• Don’t rely on offsets unless very sure of timing and risk

• Integrate emissions metrics into procurement decisions, apply common

standards and publicly disclose performance

• Define quantified targets for industrial energy intensity performance

2. Prioritise Energy Efficiency (and energy conservation)

• “Nega Watt” – energy not used.

• Address the recurring energy efficiency challenge – often a Cinderella subject.

Saving invisible energy is not as exciting as spending / building new.

• Define “efficiency” boundary / output / input (ref. IPMVP)

• Emphasise the necessity for Measurement and Verification (M&V)

• Global applicability of the “underpinning philosophy”. Economic theory is that

competitive markets are the most efficient way of allocating resources – energy
savings are best delivered through contractual arrangements.

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3. Applying M&V at the National & Sectoral Level
• Nationally Determined Contributions (NDC)

• NDC rationale for differences: history, economy etc.

• Counting CO2e – Measure & Verify? Needs a “System international”

• Lessons from the IPMVP (International Performance, Measurement and

Verification Protocol)

• “Measuring” Inputs and Output: Business / Organisation level reporting

“Creative carbon accounting is enabled by the absence of an agreed

definition of net zero, which is still a nascent concept. We risk credibility
and dilute ambition by not having agreed basic parameters”
Camilla Hodgson, FT 9th April 2021
Article on UN Special envoy on climate change and finance, Mark Carney’s, back
tracking as $600bn Brookfield Asset Management’s head of impact investing.

• Even with Solar and PV, we know – although better than alternatives - that
their lifecycle emissions are far above zero.

• Greenwashing highlights the importance of the energy hierarchy

• The CCC has said that getting to net zero (i.e. meeting the 100% target) is
“technically feasible but highly challenging” (2nd May 2019)

4. The GHG Protocol Corporate Standard

• Focus on Scope 1&2

• How easily are they measured?

• Is there a risk of diplication or omission?

• What role can energy efficiency play in reducing emissions?

Who owns Scope 3?

• According to CDP, a company’s supply chain emissions are on average 5.5
times larger than its Scope 1 and 2 emissions.

• It is therefore crucial that businesses tackle Scope 3 emissions to meet the

aims of the Paris Agreement and limit global warming to 1.5*c

• However, good verifiable data is essential to allow signatories of the Paris

Agreement to assess progress and agree on new targets

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Corporate Value Chain (Scope 3) Standard
• Why apply common standards to global supply chain emissions reporting?

• Corporate Value Chain Scope 3: categories

• How easily can they be measured?

• Is there a risk of duplication or omission?

• What role can energy efficiency play in reducing emissions in the supply chain?
Measuring and reducing Scope 3 emissions

• Assess where the emission hotspots are in the supply chain

• Identify resource and energy risks in the supply chain

• Identify which suppliers are leaders and which are laggards in terms of their
sustainability performance

• Identify energy efficiency and cost reduction opportunities in the value chain

• Engage suppliers and assist them to implement sustainability initiatives

• Improve the energy efficiency of their products

• Positively engage with employees to reduce emissions from business travel and
employee commuting

• Action addressing Scope 3 emissions remains limited

Other Scope 3 “targets”

• Capital Goods: Public sector – include “carbon investment return”

• Supplier’s Transportation & Distribution: Standardised procurement appraisal to

include CO2e

• Waste generated in operations & ‘end of life’ treatment of sold products:

Obligatory reporting and impact of repair and recycle?

• Business travel and employee commuting

• Downstream Transportation & distribution: are delivery emissions addressed?

• Processing and use of sold products: product labelling?

• Leased Assets, Franchises & Investments: can the financial service sector
define and apply?

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5. The Need to do Better…

“Strategy - the art of projecting and directing the larger military movements
and operations of a campaign” (Shorter OED)

UK’s Industrial Decarbonisation Strategy:

“This strategy sets out how industry can decarbonize in line with net zero
while remaining competitive and without pushing emissions abroad”
Presented to Parliament by the Secretary of State for Business, Energy & Industrial
Strategy, March 2021

5.1 Industrial Energy Efficiency strategy? (Chapter 5)

• “Develop communications plan to boost awareness of measures support
to improve industrial energy efficiency”

• “Encourage firms to install energy management systems”

• “Overcome barriers to adoption and access to finance, expertise and advice”

• “Research and test new heat recovery techniques”

• “Review how smaller, more dispersed manufacturing sites can adapt low
carbon and energy efficiency solutions”

5.2 Trade deals & decarbonisation strategy? (Chapter 7)

• “Work with partners to create a coalition committed to shared approaches to
developing the market for low carbon products”

• “Lead global innovation efforts, through the UK’s leading role in Mission
innovation to reduce the costs of supplying low carbon industrial products”

• “Support industrial decarbonisation through trade policy”

• “Capitalise on the export opportunities of having a world-leading net zero

industry”

• “Continue to work with key international organisations, countries and

initiatives to encourage industrial decarbonisation in developing countries”

UK Government position….
• Believes free trade agreements with other countries will boost industrial
decarbonisation and reduce technical barriers to trade.

• Aims to develop new initiatives alongside other leading economies “that will
work towards bold targets” for industrial decarbonisation in the run up to
COP26.

1st Step should be to realign the carbon markets in Europe….

• Brexit – UK dropped out of the EU’s Emissions Trading System

• 15th April 2021 – over 40 leading industry bodies have written to EU and UK
seeking the linking of UK ETS to EU ETS “as soon as practical”

• Linkage creates a level playing field for carbon pricing & investment, provides 11
greater liquidity, price discovery and avoids competitive distortions
To summarise
Key Manifesto recommendations:
• Apply the Energy Hierarchy
to rebalance Government
policy priorities
• Prioritise investments
in Energy Efficiency over
investment in new
renewables
• Enable global best practice
energy technology and
associated services to
better enable global energy
efficiency
• Don’t rely on offsets unless
very sure of timing and risk
• Integrate emissions metrics
into procurement decisions,
apply common standards
and publicly disclose
performance
• Define quantified targets
for industrial energy
intensity performance
• UK re-join the / realign with • Revisit the funding for
the EU ETS retrofit training schemes –
consider using a levy
• Use the tax system to
system to fund a substantial
incentivise energy efficiency
part of retrofit training
• Reintroduce the ‘Enhanced
• Consider 75% funded by
Capital Allowances’ scheme
HMG and 25% funded by
for everything on
companies – mainly SME’s
the Energy Technology List
provide installer capacity
• Use VAT reduction to
• We also need to upskill
incentivise investment in
procurement, both within
energy efficient measures
the public and private
• Use the local business rates sector
system to incentivise
energy efficient buildings
• Saved energy costs will
mean greater profits which
in turn will mean
greater tax take for HMG
– same with VAT – volume of
sales will compensate for
lower VAT rate
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Further thoughts and proposals
Legislation vs. Incentivisation -
‘Carrots and Sticks’
We believe that a blend of action through
legislation needs to be balanced with a
system of rewarding energy efficiency action
through incentivisation using the tax system.
As an example, it makes sense for companies
and organisations that achieve ISO50001 to
receive a fiscal incentive as they currently do
in Germany. The numbers of certifications held
would certainly indicate that take up is slow
where such incentives do not exist.
Where mandatory reporting requirements are
set by Governments, such as ESOS, it certainly
makes sense for the holding of 50001 to be a
direct route to compliance.
Retrofit
In countries like the UK, where the existing
building stock is generally old with a wide
variation of building types, retrofit becomes a
vitally important solution for energy efficiency.
The key is a holistic approach supported by the
retrofit coordinator qualification.
That said, installation capacity is stretched far
too thin at the present time, with the majority
of the installer supply chain coming from the
SME business community. For SME installer
companies to consider taking on and training
up new staff, they require far greater certainty in
terms of planning and Government policy.
Collaboration
Global collaboration is critical to address
challenges. We believe that much of the
solution to effective collaboration lies within the
membership sector utilising the knowledge and
experience contained within Trade Associations
and Professional bodies throughout the World.
Their knowledge of their members’
circumstances, coupled with strong existing
communication channels and trusted partner
status, makes them an ideal conduit to work
on energy efficiency schemes at scale. This is
especially relevant to the delivery of the retrofit
programme debate.
Don’t forget the non-domestic sector
It is understandable why homes are generally
considered first when looking at treating
existing building stock to enable them to
become more energy efficient. Many houses are
constructed in a standard way making them, in
theory at least, easier to retrofit at scale.
Commercial/non-domestic properties tend to
not fit too many standard patterns. That said,
the commercial sector seems to attract less
policy interest from Government. It could be
simply because the Government doesn’t see
any votes in businesses compared with people.
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We would strongly advocate that the non-domestic sector buildings should
receive far more policy focus and attention. With a major focus at the time of
this document’s launch on energy intensive sectors facing severe challenges
as a result of price increases, we would advocate a focused support on
investment in energy efficiency solutions being incentivised through the capital
allowances scheme.

The ‘super allowance’ announced by the Chancellor in his March 2021 budget
was a start, but it was not focused on energy efficiency alone and we feel it
should go further.

Information resource
It is vitally important that all end users of energy, no matter their size, sector or
location should have access to high value, low cost and ideally free information
on their options for saving energy. It is likely that this should be on a Country,
rather than Global, basis.

Education
As was proven by the lack of take up of both the Green Deal and the Green
homes grant schemes created by the UK Government, educating the public
about the whole climate change process is a vital part of the process.
We would advocate putting climate education into Schools as part of the
curriculum from the earliest possible age.

SME Businesses
SME Businesses make up a very high proportion of businesses in the World.
By definition. SMEs tend not to have in house capabilities and a majority do
not own their own premises, so do not have responsibility for/ownership of an
energy bill.

To help address this issue, ESTA has been working with others to set up a
Global SME Energy Alliance model - with each Country then being able to
set up its own Alliance to suit its legal, governance and market requirements
(following the example set by the World Green Building Council). As a starting
point, we have set up the UK SME Energy Alliance model looking to create
buying groups for sectors or regions.

We believe that, through these buying groups, energy efficiency solutions can
be potentially purchased at scale - with financing available through a bundling
of services into an Energy Performance Contract.

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We strongly support the work carried out by the Global
commission for urgent action on Energy Efficiency, supported
by the International Energy Agency (IEA). We wholly endorse
their 10 recommendations published in June 2020:

1. Prioritise cross-cutting energy efficiency
action for its economic, social, and
environmental benefits
A stronger, all-of-government policy focus will
enhance social andeconomic development,
energy security and resilience,
decarbonisation, and rapid job creation and
economic stimulus
2. Act to unlock efficiency’s job creation
potential
Energy efficiency can quickly deliver job
growth and can become a long-term,
sustainable employment sector
3. Create greater demand for energy
efficiency solutions
Efficiency action will be most rapidly scaled
up through a focus on increasing demand
for efficient products and services and
enabling greater levels of market activity
4. Focus on finance in the wider context of
scaling up action
Mobilising finance is an essential element of
efficiency action, and policies to do so will be
most effective if they are part of a wide,
coherent approach to driving market scale
5. Leverage digital innovation to enhance
system-wide efficiency
Policymakers can take advantage of digital
innovation’s potential to enable smart control,
better energy management, and wider energy
system optimisation
6. The public sector should lead by example
Governments should lead through investment
in public sector efficiency and driving
innovation and higher standards throughout
its reach
7. Engage all parts of society
Implementation of efficiency action can
happen at all levels of society, with cities,
businesses, and local communities all
playing a particularly important role in its
success
8. Leverage behavioural insights for more
effective policy
People are at the centre of energy efficiency
action, and insights from behavioural science
can help design smarter policies
9. Strengthen international collaboration
International collaboration and exchange of
best practice allow countries to learn from
each other and to harmonise approaches and
standards where appropriate
10. Raise global energy efficiency ambition
Governments should be significantly more
ambitious in both the short- and long-term
when setting their efficiency targets, policies,
and actions.

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In conclusion

Understanding energy usage now through data, cost-effective routes to energy

efficiency effectiveness, changing behaviour towards energy usage, and setting
standards are all key actions.

Time for action in relation to the climate emergency is clearly short.

Consequently, many of our recommendations we would classify as short-
term actions. Changes to the taxation incentivisation approach can be enacted
relatively quickly to stimulate take up of readily available solutions.

We believe that medium term will include behaviour change work and training
needs to get people out of old non-green, less relevant sectors into green jobs
- especially with regard to retrofit installation work.

Long term will include focus on education and international standards

development.

The Manifesto Authors

ESTA, the Energy Services and Technology Association, is a long-established and primary Trade
Association representing a number of members specialising in the delivery of energy efficiency
across the whole asset base in commercial, industrial, and public sector environments. Our
members help their clients improve environmental performance, optimise operating costs, improve
energy efficiency, achieve their sustainability targets, and implement practical improvement
projects to improve service delivery.

Initially authored by David Hirst – Chartered Energy Manager, CEng, FEI, FICE, and Mervyn Pilley
AMEI AIGEM. Full recognition given to other contributions provided by ESTA members and other
members of the energy efficiency community.

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Energy
Efficiency
Manifesto
COP26

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