Energy Evolution to Look Out for in 2024

As we embark on a new journey in 2024, the UK's energy sector is ready for transformation driven by a global push towards sustainability. In this article, we explore the crucial factors that businesses should keep a watchful eye on.

The ESOS Scheme

The Energy Savings Opportunity Scheme (ESOS) remains a cornerstone of the UK's commitment to energy efficiency. With the recent publication of the Government’s ‘Phase 3’ consultation response, businesses should expect new compliance requirements. Notably, the introduction of mandatory action plans is due by the 5th of December 2024.

The requirement to publicly report efficiency savings highlights the need for SMEs to engage with ESOS and make the framework a consideration in their annual plans. Making changes to comply might call for the assistance of a consultant, particularly as ESOS reports become more complex.

The COP28 Summit

The outcomes of COP28, a recent UN climate summit hosted in Dubai, are anticipated to have a significant bearing on the UK's energy landscape in 2024. Although there has yet to be an official agreement to phase out fossil fuels, the direction of travel raises questions about the Government's progress toward its 2050 net-zero target. Recent licensing rounds for North Sea oil and gas extraction add further complexity to this narrative.

The Government’s commitment to doubling energy-efficiency improvement rates and tripling renewables by 2030 creates an interesting dynamic. Monitoring the implementation of new agreements will be important for businesses working towards their own net-zero target.

The Cost of Energy

Unfortunately, we can expect volatility in energy prices to persist throughout another year, with the domestic energy price cap already notched up 5% for the first quarter. This increase not only adds to the financial challenges facing consumers but also presents challenges for businesses negotiating energy tariffs.

With no respite for SMEs and the end of Government subsidies this spring, conservative energy consumption becomes crucial to maintaining financial stability. Businesses should establish robust energy efficiency practices, particularly during the coldest months.

The SECR Framework

While the Streamlined Energy and Carbon Reporting (SECR) framework already mandates disclosure of ‘Scope 1 and 2’ emissions, the voluntary nature of ‘Scope 3’ reporting is subject to change. British businesses might need to report greenhouse gas emissions in more detail depending on the results of a fresh consultation.

Decarbonisation efforts are gaining momentum, and businesses might experience a desire from partners or clients to see clear strategies. NHS supply chain requirements will soon require its suppliers to publish carbon plans for Scope 1, 2 and 3 emissions.

The General Election

As a late 2024 general election looms in the distance, businesses face continued uncertainty over energy legislation. The Prime Minister's promise to unveil more details on the Conservative Government’s environmental agenda adds its own layer of uncertainty.

In light of this, businesses should focus on the information and directives currently available, proactively engaging with best practices.

In Conclusion

In 2024, energy efficiency will evolve from a good business practice to an essential strategy. Staying well-informed about legislative changes, taking efficiency measures and consolidating carbon reduction strategies will empower SMEs to thrive.

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