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Ensuring compliance with Legislative Decree 102/2014

With the deadline for the European Commission’s EED (Energy Efficiency Directive) 2019 energy audit right around the corner, it’s worth looking at what this will mean for the companies affected.

Specifically, I’d like to examine the regulatory environment shaping up in Italy, where the EED is being pursued with uncommon governmental vigor. Italy ratified the EED with Legislative Decree n. 102 of 04/07/2014, which requires large companies to periodically audit their energy use. This legislation, commonly referred to as “102/2014,” requires comprehensive energy audits be carried out every four years pursuant to Italy’s National Energy Efficiency Action Plan.

The next audit, due in 2019, must be based on data gathered in 2018. This means that companies which aren’t currently equipped to collect energy consumption data need to get their house in order – and soon. These enterprises are scrambling in search of solutions to meet their compliance-demonstrating obligations without disrupting their business operations.

There’s a lot at stake, with non-compliance instantly tarnishing a company’s image and conferring considerable fines. Italian companies may never have considered auditing their energy use in this manner before, and the task can certainly seem daunting at first. However, reporting tools make such monitoring an easy chore to tackle. And being that the government is already pushing its corporations in this direction, best-in-class companies are looking for ways to turn this new layer of instrumentation into a competitive advantage.

Who is impacted?

The EED requires “large companies” to submit audits for review. However, through Legislative Decree 102/2014, the Italian government expanded the definition of “large companies” to include those considered energy-intensive, regardless of size. This effectively created two categories of “large” companies.

Large by way of employee size

Large companies are defined as those which employ more than 250 people. These enterprises also must have an annual turnover greater than 50 million euros or an annual balance sheet of more than 43 million euros. In total, more than 6,400 Italian companies – 3,500 large enterprises and 2,929 energy-intensive companies – meet these qualifications.

Large by way of energy use

A company is considered energy-intensive if it consumes more than 2.4 GWh of energy and if the ratio of energy cost and turnover is more than or equal to 3%.

Other qualifiers

Organisations certified with ISO 50001, EN ISO 14001 or EMAS are exempt from a separate audit. Nearly all obligated enterprises – 95% – complied with the energy audit upon the previous deadline in 2015. However, companies that were compliant in 2015 can’t simply repeat what they did previously. Audit requirements have become much more aggressive since 102/2014’s inauguration year.

Supported with in-depth reporting

One of the biggest changes in the next round of auditing will be the tighter control over who can actually perform the audit. While 2015’s energy audits were able to be carried out by any energy service company, expert in energy management, or energy auditor – without requiring any special certification – 2019’s audits will be considerably more demanding. With revisions made to the original legislation by way of Legislative Decree 141 of 2016, all subsequent energy audits must deliver greater reporting granularity and can only be performed by entities or experts certified by the appropriate accredited body – ESCOs under UNI CEI 11352, EGEs under UNI CEI 11339, Energy auditors under UNI 16247 – 5.

Monitoring technology more than satisfies the added rigors of 141/2016 and the reporting that underlies the audit will be carried out by our team of UNI CEI 11339-certified Energy Management Experts (EGEs).

Centrica Business Solution's PowerRadar software is uniquely qualified to provide a detailed rundown of operational energy consumption. Whether it’s granular, day-to-day reporting, or panoramic reports that summarize the entirety of business operations, PowerRadar supports the reporting necessary to comply with Legislative Decree 102/2014.

The basic process for reporting breaks down into 9 steps:

  1. Gather information through preliminary meetings and an in-depth questionnaire.
  2. Map the site according to the most energy-intensive machines and systems.
  3. Deploy sensors and set up PowerRadar analytics suite.
  4. Examine energy consumption and establish baselines, analyzing collected data sets along with available device and industry records per IPMVP.
  5. Account for other influencing factors such as temperature, humidity, processing load, human error, etc.
  6. Identify operational outliers and suss out improvement opportunities/system dysfunctions.
  7. Conduct cost-benefit analysis for potential interventions, including environmental impact assessment and whether or not the company in in position to buy or sell white certificates.
  8. Deliver collated findings and recommendations.
  9. Issue energy audit compliance report.

Working together

Together with the client, representatives evaluate which systems are using the most energy, such as HVAC or lighting, and which equipment is the most “sensitive,” meaning that operations cannot continue without this item’s proper functioning.

Components within larger systems can be monitored as well; through the PowerRadar dashboard, the user can see the data generated by the HVAC system as a whole or view energy consumption by heat pumps, chillers or other components.

An analyst will review the customers’ equipment and work with the client to determine the most vital systems to be monitored. The dual hardware-software energy monitoring apparatus can monitor any number of devices, from a handful of machines to an operation-wide rollout with thousands of sensors. Sensor types and installation sites are selected so that the company can satisfy 102/2014 as well as whatever internal objectives it has set for the deployment.

Each sensor is calibrated and fully lab-tested before it’s sent for installation, and the sensors can be connected to the PowerRadar system through any stable internet connection or a private mobile network. The sensors have a working life of at least 10 years, as well as a built-in system of instant alerts if they are ever disconnected.

Once the best devices to monitor are identified, installation can begin. The deployment process doesn’t take more than a few days, depending on the number of devices being monitored. In one recent multi-site deployment, 1,300 sensors were installed across 44 separate buildings in just 22 days.

For Italian companies subject to 102/2014 that haven’t yet set up the instrumentation needed for their 2019 audits, this sort of rapid deployment can mean the difference between failure and success. The sensors are designed with a snap-on design that wraps around device wiring in seconds. Once the sensors are in place, they will immediately begin sending energy readings to a locally mounted bridge that pushes the data stream on to the PowerRadar dashboard.

Within PowerRadar, the energy can be viewed from a current perspective, a power perspective or an energy perspective. Current and power perspectives are viewed much like the human pulse – consumption goes up and down and is compared against a “normal” standard.

To interpret the data from an energy perspective, power consumption is evaluated in counterdistinction to effective power utilisation, revealing a telling performance calculation.

When it comes time to submit the audit, or simply to produce a report for other interested players, the PowerRadar system supports three types of reports:

  1. The pre-designed report – which can be automatically generated by “checking off” the desired information sets for inclusion.
  2. The custom report – generated and issued at regular predetermined intervals.
  3. The energy insight report – which covers analysis, conclusions and recommendations.

The energy insight report is put together with the help of a team of Energy Management Experts. This extremely detailed report, which takes 30 days to put together, covers all the dimensions of a rigorous energy audit and more than satisfies the requirements laid out in Legislative Decree 102/2014 and amended by 141/2016.

Compliance into a competitive edge

With an intelligent, device-level energy management system, operations-improving and compliance-demonstrating reporting – from the device level to the site level – is just a click away.

A well-designed and thoughtfully implemented energy monitoring and management system is a formidable tool in any business’s arsenal. Energy can provide unique insight into the otherwise hidden processes that keep your operation humming.

Studying energy patterns, you can see how myriad moving parts interconnect and assess the health of those parts both individually and collectively. This sort of simultaneously granular and panoramic perspective is vital to not just ensuring regulatory compliance, but also to boosting productivity.

Compliance and energy savings are just the beginning. Leveraging a comprehensive energy monitoring solution immediately puts you a stone’s throw away from prescriptive maintenance and generally improved operations. Shorter production cycles and longer asset life cycles follow almost automatically.

A straight line runs between improved awareness of your business’s energy consumption and improved understanding of where to invest resources, when to halt existing investments and how to cut operating costs. In the end, you may even be thanking the government for this bit of regulation.