ARTICLE
2 September 2024

Energy Management Systems And Energy Audits: New Rules Under The Recast Energy Efficiency Directive

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Arthur Cox

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The rules around energy management systems and energy audits are being changed by the Recast Energy Efficiency Directive.
Ireland Energy and Natural Resources

The rules around energy management systems and energy audits are being changed by the Recast Energy Efficiency Directive.

The previous Directive required that enterprises that are not small and medium-sized enterprises ("SMEs") are subject to an energy audit at least every four years. This was transposed in Irish law such that applicability is assessed on the basis of the size of the company formed under Irish law, rather than any wider group company structure in which the Irish company sits.

The new requirements of the Recast Directive, which must be transposed in domestic law by 11 October 2025, are summarised below.

1. Enterprises with an average annual consumption higher than 85 TJ of energy

Enterprises with an average annual consumption higher than 85 TJ of energy over the previous three years will be required to implement an energy management system certified by an independent body. The energy management system must be in place at the latest by 11 October 2027.

2. Enterprises with an average annual consumption higher than 10 TJ of energy

Enterprises with an average annual consumption higher than 10 TJ of energy over the previous three years, which do not implement an energy management system, must be subject to an energy audit. Audits first must be done by 11 October 2026 and then at least every four years. (Where enterprises already carry out an audit, they must continue to do so at least every four years.)

These enterprises will be required to draw up a concrete and feasible Action Plan based on the recommendations from the audits. The Action Plan will identify measures to implement each audit recommendation, where it is technically or economically feasible, and will be submitted to the management of the enterprise. Action Plans will be published. The recommendation implementation rate will be included in the enterprise's annual report.

3. SMEs that are not in the above categories

Member States must develop programmes with the aim of encouraging and providing technical support to SMEs to undergo energy audits and implement the recommendations from those audits. The programmes must include support to SMEs in quantifying the multiple benefits of energy efficiency measures within their operation, in the development of energy efficiency roadmaps, and in the development of energy efficiency networks for SMEs. Member States must bring to the attention of SMEs concrete examples of how energy management systems could help their businesses.

4. Enterprises that are not in any of the above categories

Member States must develop programmes to encourage other enterprises to undergo energy audits and to subsequently implement the recommendations arising from those audits.

5. Final customers

As in the previous Directive, Member States must promote the availability to all final customers of high-quality energy audits.

Exemption: There is an exemption from the requirements under 1. and 2. if the enterprise implements an energy performance contract that covers the necessary elements of the energy management system and complies with requirements at Annex XV (Minimum items to be included in energy performance contracts or in the associated tender specifications).

Annual consumption: Member States may encourage the enterprises referenced at 1. and 2. to provide information in their annual report about their annual energy consumption in kWh, their annual volume of water consumption in cubic metres and a comparison of their energy and water consumption with previous years.

Support: Member States may implement incentives and support schemes for the implementation of recommendations from energy audits.

It remains to be seen how these requirements will be transposed in Irish law.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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