ISO 50001 can improve energy performance, reduce costs and help meet ESOS requirements Mr. Terry Coyle - ISO 50001 Product Manager, SGS UK energy@sgs.com 2

SESSION OUTLINE Energy Management Systems Purpose and structure of ISO 50001 ISO 50001 key elements Relationships between ISO 50001, ISO 14001 and ISO9001 Energy Savings Opportunity Scheme – How can ISO 50001 help

ENERGY MANAGEMENT SYSTEMS Economical impacts The availability of fossil fuels stocks with economically feasible exploration is limited. As development accelerates in some countries and energy demand increases so does the pressures on existing stocks. This pressure leads to price escalating, with important consequences on fuels, products and services cost. The development of Energy Management Systems was a response to several worldwide difficult circumstances. One of them is the need for use of existing fossil fuels in the most efficient way. Even though we keep finding new stocks, the costs of exploiting them and associated risks are much higher than the previous ones. The demand pressure on fuels causes it’s price to increase. That affects directly the fuels prices but indirectly causes the escalating of prices of all products and services, since all of them, at a certain point of their production and delivery processes involve the use of fuels and other types of energy produced with resource to fossil fuels. Therefore, the less energy intensive our products and services are the most competitive our organisations’ get.

ENERGY MANAGEMENT SYSTEMS Political impacts From a political perspective, every country wishes to be autonomous when it comes to energy supply. Increased pressures on emissions and energy reduction targets through legislation The renewable energy technology will enable countries to obtain their energy supply from internal resources, rather than relying on external organisations. Political issues related to fossil fuel access will diminish.

ENERGY MANAGEMENT SYSTEMS Environmental impacts The production, distribution and use of energy entails serious environmental impacts: Air pollution Water pollution Hazardous waste production Energy related environmental impacts are related to several energy life cycle stages. The oil drills pose several environmental issues as we all know from the last year accident. Even though not being as obvious the smaller but very frequent oily wastewater into the ocean has serious impacts on the marine ecosystem as well. Environmental impacts continue to fuels transformation, distribution and finally their combustion. The most well known impact is related to Climate Change but we cannot forget other air pollutants that affect public health in a significant way. Increasing energy efficiency is an extremely important action to tackle climate change.

A MAJOR OPPORTUNITY “Energy Efficiency is the most promising means to reduce greenhouse gases in the short term” Yvo de Boer, Former Exec. Secretary UNFCCC

ACHIEVING ENERGY EFFICIENCY In order to achieve major, long-term increases in energy efficiency, organisations need to: Assess, manage, and measure energy usage; Make better use of their energy-consuming assets; Adopt energy management best practices.

AN ENERGY MANAGEMENT STANDARD Most energy efficiency is achieved through changes in how energy is managed rather than through installation of new technologies. An Energy Management System Standard will provide a framework for integrating energy efficiency into existing systems for continuous improvement.

THE NEED FOR A STANDARD “The urgency to reduce greenhouse gas emissions, the reality of higher prices from reduced availability of fossil fuels and the need to promote efficiency and the use of renewable energy sources provide a strong rationale for developing this new standard, building on the most advanced good practices and existing national or regional standards.” Alan Bryden, ISO Secretary-General

WHY ENERGY MANAGEMENT Because it increases profit… Because of Climate Change Reduction Targets… Because it is good for reputation… Because it increases profit… The manufacture requires significant quantities of thermal energy to convert raw materials to useful products. Businesses can cut energy costs, reduce overhead expenditure and consequently increase profit margins. Because of Climate Change Reduction Target… Most of the sub-sectors in the industry have negotiated the climate change reduction target with the government To reduce energy use, the sub-sectors will meet challenging targets for improving energy efficiency or reducing carbon emissions. For most companies, climate-change action will begin with energy efficiency: Nearly two-thirds (62%) of companies have implemented some degree of improvement in energy efficiency over the past two years which is far ahead of all other actions. Because it is good for reputation… It is important for businesses to demonstrate their commitment to reducing carbon emissions to ensure that they retain consumer confidence and maintain their position in the marketplace

ISO 50001 OBJECTIVE “Enable organisations to establish the systems and processes necessary to improve energy performance, including energy efficiency, use and consumption” The standard will establish a framework for industrial plants ; commercial, institutional, and governmental facilities ; and entire organizations for integrating energy performance into their management practices. Considers only the organization energy efficiency; therefore doesn’t cover it’s products and services. Is suitable for every type of organisation. The system complexity and depth will be adapted to each organisation size, activity and energy use.

ISO 50001 MODEL Continuous improvement Energy policy Energy planning Management review Implementation and operation Monitoring, measurement and analysis Checking This International Standard is based on the Plan-Do-Check-Act continual improvement framework and incorporates energy management into everyday organizational practices. The structure of the Standard is very similar to that of ISO 14001. The Standard can be used independently or integrated with other managements systems (ISO 9001, 14001, etc.). The Standard is based on the Plan-Do-Check-Act (PDCA) methodology Nonconformities, correction, corrective and preventive action Internal audit of the EnMs

ISO 50001 Energy Management Systems TECHNICAL PLAN Energy review and baseline (4.4.3 and 4.4.4) Energy Performance Indicators (4.4.5) MANAGEMENT Policy/goals/targets (4.3, 4.4.6) Resources (4.2.1) DO Training (4.5.2) Communication (4.5.3) Documentation (4.5.4) Operational control (4.5.5) CHECK Internal Audit (4.6.3) Corrective/ preventive action (4.6.4) ACT Management review (4.7) Design (4.5.6) Procurement (4.5.7) Energy performance and EnPIs review (4.7.1) Monitoring (4.6.1) Measurement (4.6.1) Verifying action plans results (4.4.6) Management System For Energy ISO 50001 Energy Management Systems ISO 50001 establishes the order and consistency necessary for organizations to proactively manage their energy resources. The organization uses the Plan-Do-Check-Act continual improvement framework to manage energy resources, incorporating energy management into everyday business operations and strategies. The framework of ISO 50001 encompasses both the management and the technical elements of energy management. The effective management of energy requires both to be present and integrated, i.e. incorporate technical best practices with management best practices. This figure illustrates how this integration take place within the management system for energy.

ISO 50001 CONTENTS Scope Normative references Terms and definitions Energy management system requirements 4.1 General requirements 4.2 Management responsibility 4.3 Energy policy 4.4 Energy Planning 4.5 Implementation and operation 4.6 Checking 4.7 Management Review Annex A: Guidance on the use of this International Standard Annex B: Correspondence between ISO 50001:2011, ISO 90001:2008, ISO 14001:2004 and ISO 22000:2005 Will not be covering all the requirements of 50001 in detail, but will include reference to the most significant elements. Many of you will be familiar with other managements standards such as 9001 & 14001 and will understand that there are requirements relating to management responsibility, policies, document and record control, etc. Energy management highlight the management responsibility and move to section 4.2 as a individual section. It is different with other management system that role are in the “Do” stage. This means EnMS need the highly support form top management, especially enough resource and buy high energy efficiency equipment/ product Inevitably, management are required to make a commitment establishing Energy Performance Indicators and to continual improvement in energy performance. As with many ISO management system standards nowadays, there are also requirements to establish energy targets and objectives linked in with improvement measures. This standard specifies the requirements that a company/organisation needs to comply with if it wants to establish, implement, maintain and improve an energy management system. Such a system will enables companies/organization to achieve continual improvement of energy performance, energy efficiency and energy conservation.. 50001 includes requirements relating to energy supply, as well as energy use and consumption. These include requirements relating to measurement, reporting, design and procurement practices for equipment, systems, processes and personnel involved in the management of energy. There are, however, some elements of 50001 that it is important to highlight as part of an introduction to the Standard: Planning, Implementation and Operation, as well as Checking and review.

KEY ELEMENTS OF ISO 50001 Energy review Energy baseline Energy performance indicators Design and Procurement Monitoring and measurement Energy policy top management’s official statement of the organization’s commitment to managing energy Cross-divisional management team led by a representative who reports directly to management and is responsible for overseeing the implementation of the energy management system Energy review to assess current and planned energy use, energy sources and consumption and identify opportunities for improvement

People that affect performance ENERGY REVIEW ENERGY REVIEW - Detailed picture of the energy performance of the organisation Energy uses Facilities Equipments Processes Energy consumption Measured data Estimates People that affect performance Staff People that work on behalf of the organisation The energy review is a very technical and detailed document. There is no parallel in ISO 14001.

ENERGY REVIEW The organisation must establish the relationships between significant energy uses and its associated variables. Examples: Production output, External temperature, Occupation rate.

IMPROVEMENT OPPORTUNITIES The organisation must ensure that employees and people working on behalf of the organisation can take an active part in energy performance improvements. All opportunities for improving energy performance must be identified, prioritised and recorded.

ENERGY REVIEW ENERGY REVIEW will help you answer the questions: Which equipments, processes or facilities consume more energy? Who are the people than can affect my energy performance? How can I improve my energy performance? The energy review is a very technical and detailed document. There is no parallel in ISO 14001.

Variables that affect energy consumption ENERGY BASELINE ENERGY REVIEW AND BASELINE Energy consumption Variables that affect energy consumption The energy baseline can be a simple chart or a complex mathematical model. Either way, the organisation must be able to understand the energy performance on an going basis. In order to do this, many organisations run linear regressions or multi-variable analysis to better understand ho w do the variables affect the energy consumption and to identify significant deviations. ENERGY BASELINE

ENERGY BASELINE ENERGY BASELINE Most important monitoring tool; Will indicate energy improvements effectiveness; Allows the identification of significant deviations from expected energy consumption.

ENERGY BASELINE ENERGY BASELINE will help you answer the questions: Am I achieving my objectives and targets? Is the recorded energy consumption the one it was estimated?

DESIGN Energy performance improvement opportunities and operational control should be considered during the design of new, modified and renovated facilities, equipment, systems and processes that can have a significant impact on its energy performance.

PROCUREMENT The organisation should consider energy in the acquisition and purchase of equipment, raw materials and services. When these have a impact on significant energy use, the organization shall inform suppliers that procurement is partly evaluated on the basis of energy performance. Criteria for assessing energy use, consumption and efficiency over the planned or expected operating lifetime of products, equipments and services.

MONITORING, MEASUREMENT AND REVIEW Monitoring and measurement: Performance against objectives/ targets/ EnPI’s Legislative/ regulatory compliance Compliance with ISO 50001 Review: Does an organisation’s energy management system continues to meet the policy objectives? Does the energy management system demonstrate continued energy performance improvement?

RELATIONSHIPS BETWEEN ISO 50001:2011, ISO 14001:2004 AND ISO 9001:2008 QUALITY POLICY Customer focus Planning of product realisation Customer-related processes Control of nonconforming ISO 14001 ENVIRONMENTAL POLICY Environmental aspects Emergency preparedness Environmental management programme MANAGEMENT COMMITMENT ROLES, RESPONSIBILITY & AUTHORITY COMPETENCE, TRAINING & AWARENESS COMMUNICATION OPERATIONAL CONTROL MONITORING & MEASUREMENT DOCUMENTATION INTERNAL AUDIT CORRECTIVE & PREVENTIVE ACTION MANAGEMENT REVIEW ISO 50001 ENERGY POLICY Energy review Energy performance indicators Energy baseline Energy management Objectives and targets Legal requirements Design Procurement The structure of the 2 standards is similar and follows the same principles of the PDCA cycle. The level of information required by ISO 50001 though is much demanding and that’s exactly where organisations will be able to identify the improvement opportunities related to energy performance. The fundamental purpose of ISO 14001 and ISO 50001 are different ISO 140001 cover some aspects of EnMS, ISO 50001 include a comprehensive set of critical processes to manage energy.. What ISO 50001 allows is that you can look at energy not only because of its environmental impact but you can determine significance based on other factors, reliability, energy independence, energy security issues, you can introduce all of these other significant criteria that are not specifically tied to an environmental impact. Key advantage of ISO 50001 is help manage energy performance through: Systematic energy review Set up energy baseline and EnMS performance indicators (EnPIs) Measurable energy objective/ target Continuously monitoring and improving energy performance

WHY ISO 50001 IS THE NEXT LOGICAL STEP FOR AN ISO 14001 CERTIFIED ORGANISATION? ISO 14001 covers all the types of environmental aspects, including energy. ISO 50001 defines requirements that lead to better energy performance: Defining the information to consider when identifying significant energy uses, Understanding the variables that affect energy performance, Determining the information that should be monitored and measured. Performance improvement is a requirement The structure of the 2 standards is similar and follows the same principles of the PDCA cycle. The level of information required by ISO 50001 though is much demanding and that’s exactly where organisations will be able to identify the improvement opportunities related to energy performance. The fundamental purpose of ISO 14001 and ISO 50001 are different ISO 140001 cover some aspects of EnMS, ISO 50001 include a comprehensive set of critical processes to manage energy.. What ISO 50001 allows is that you can look at energy not only because of its environmental impact but you can determine significance based on other factors, reliability, energy independence, energy security issues, you can introduce all of these other significant criteria that are not specifically tied to an environmental impact. Key advantage of ISO 50001 is help manage energy performance through: Systematic energy review Set up energy baseline and EnMS performance indicators (EnPIs) Measurable energy objective/ target Continuously monitoring and improving energy performance

WHAT IS ESOS Energy Saving Opportunities Scheme (ESOS) It is the mandatory energy efficiency scheme for large organisations that has been introduced by the UK government. Will require ‘large enterprises’ carry out comprehensive audits of all their energy usage, including transport, every four years. Why? Article 8 of EU Energy Efficiency Directive (2012/27/EU) requires that all EU member states must introduce independent and cost-effective energy audits for all 'large enterprises.' The development of Energy Management Systems was a response to several worldwide difficult circumstances. One of them is the need for use of existing fossil fuels in the most efficient way. Even though we keep finding new stocks, the costs of exploiting them and associated risks are much higher than the previous ones. The demand pressure on fuels causes it’s price to increase. That affects directly the fuels prices but indirectly causes the escalating of prices of all products and services, since all of them, at a certain point of their production and delivery processes involve the use of fuels and other types of energy produced with resource to fossil fuels. Therefore, the less energy intensive our products and services are the most competitive our organisations’ get.

WHAT IS ESOS Do I qualify for the scheme? Scheme applies to all ‘large enterprises’. 'Large enterprises' are defined as any non-small or medium-sized enterprise (SME) and is therefore any enterprises that have: 250 employees or more; and An annual turnover exceeding €50 million or an annual balance sheet total exceeding €43 million. The Public Sector is not required to participate. The development of Energy Management Systems was a response to several worldwide difficult circumstances. One of them is the need for use of existing fossil fuels in the most efficient way. Even though we keep finding new stocks, the costs of exploiting them and associated risks are much higher than the previous ones. The demand pressure on fuels causes it’s price to increase. That affects directly the fuels prices but indirectly causes the escalating of prices of all products and services, since all of them, at a certain point of their production and delivery processes involve the use of fuels and other types of energy produced with resource to fossil fuels. Therefore, the less energy intensive our products and services are the most competitive our organisations’ get.

EXEMPTION? Benefits of ISO 50001 certification? ISO50001 is deemed a ‘complete’ route to compliance with the ESOS scheme provided it covers 100% of an organisations energy usage ESOS requires recommendations on money and energy-saving measures. There is no proposed requirement to act on the recommendations action. The development of Energy Management Systems was a response to several worldwide difficult circumstances. One of them is the need for use of existing fossil fuels in the most efficient way. Even though we keep finding new stocks, the costs of exploiting them and associated risks are much higher than the previous ones. The demand pressure on fuels causes it’s price to increase. That affects directly the fuels prices but indirectly causes the escalating of prices of all products and services, since all of them, at a certain point of their production and delivery processes involve the use of fuels and other types of energy produced with resource to fossil fuels. Therefore, the less energy intensive our products and services are the most competitive our organisations’ get.

Online Resources For questions, send us an email uk.nowisthetime@sgs.com SGS Energy Resources To download your complimentary whitepaper and watch webinar recordings www.sgs.co.uk/energy-management