“SI426: Finally EU Bureaucracy makes good business sense”

Most new laws receive little attention and Ireland’s adoption of the EU Energy Efficiency Directive (2012/27/EU) is no exception. On first viewing, the directive imposes yet more obligations on industry. However the intent should be seen as admirable and ultimately business friendly. In a nutshell, one of its provisions SI426 applies to you if you answer ‘yes’ to any of the following:

  1.  Do you employ more than 250 people directly?
  2.  Do you have an annual turnover of more than €50 million per year and/or an annual balance sheet in excess of €43 million?
  3. Are you a public body with individual buildings having a total useful floor area of more than 500m² or an annual energy spend of more than €35,000?

If any of this applies to you, SI426 states that you must:

  1. Complete an energy audit by the 5th December 2015
  2. Notify SEAI once complete
  3. Repeat this auditing process every four years thereafter                                                                                                                                             OR                                                                                                                       
  4.  As an alternative to the above, you can implement an ISO 50001 Energy Management System and gain certification.

This energy audit must include energy used by your buildings, industrial processes,and transport to identify cost-effective energy saving measures. The audit must sufficiently represent the overall energy performance of your organisation and must identify the most significant opportunities for energy efficiency.

Similar regulations have been in place in other countries (e.g. Germany) for some time now, and to a large extent Ireland is just catching up. However, let’s pretend that this law was never enacted -the fact is that most of the provisions of this law are simply good practice for businesses that want to remain competitive.

By now, you are probably aware of some of the scary headlines regarding energy in business:

  • Energy, for many businesses, is the second biggest expense item after labour
  • Energy is the fastest growing cost
  • Energy is the largest uncontrolled cost -i.e. bills are often paid without being checked

In ResourceKraft’s experience of working with substantial commercial concerns in Ireland, and around the world, at least 20% of the energy used in commercial or industrial sites is wasted. In fact, ResourceKraft has repeatedly found buildings and estates where it was possible to reduce energy usage by as much as 60% in the first few months of basic energy management. Furthermore, in the first year, the vast majority of the savings realised are inResourceKraft term “low hanging fruit” -those simple measures that cost little or nothing to implement, yet result in substantial savings. Such low-hanging-fruit items are often easily found through a simple auditing process that produces a register of opportunities, complete with de-facto return on investment cases that can be easily evaluated by management.

It is ResourceKraft’s contention that the vast majority of organisations affected by SI426 will emerge from the auditing process having identified low/no-costs energy efficiencies that if implemented, will at least cover the costs of the first year’s audit process. Further energy management efforts in subsequent years will naturally compound the savings.

ResourceKraft’s advice to those affected by the law is to see this as not just another unreasonable law imposed by the EU, but instead to see this as an opportunity to get energy costs under control and to increase competitiveness. The costs in both cases are likely to be similar but the return associated with the latter is likely to be much greater.

– Helene Ljubanic –




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