Energy Saving Opportunity Scheme (ESOS)

Does your organisation need to comply with the second compliance period of ESOS? You will if you are a large organisation that meets one of the following criteria:

– employs 250 or more staff; or

– has an annual turnover in excess of £42 million and an annual balance sheet total of around £36.5 million; or

– are part of a corporate group containing a large organisation.

The ESOS Regulations 2014 bring into force Article 8 of the EU Energy Efficiency Directive and requires all large organisations in the UK to undertake comprehensive assessments of energy use and energy efficiency opportunities at least once every four years.

The first compliance period (17^th July 2014 to 5^th December 2015) has now ended and organisations will now be working towards the second compliance period (6^th December 2015 to 5^th December 2019). An organisation must comply with ESOS   if on the compliance date, 5^th December 2019, it meets the definition of a large organisation.

Organisations that qualify for ESOS must carry out ESOS assessments every 4 years.

An ESOS Assessment requires participants to:

1. measure their total energy consumption across a 12month period, either in energy units (such as KWh) or in expenditure terms (£);

2. conduct energy audits to identify cost-effective energy efficiency opportunities, these can take four forms:

– ESOS energy audit;

– An ISO 5001 certified Energy Management System;

– Display Energy Certificates (DECs) and accompanying advisory reports; or

– Green Deal Assessments

3. Report compliance on or before the compliance date of each compliance period.

ESOS energy audits must be carried out or approved by a recognised Lead Assessor.

ESOS is designed to lead to greater energy efficiency, cost savings and carbon reduction in the business sector. It is estimated that a net value of £1.6 billion will be generated from the scheme in the UK and a majority of this money will apply directly to businesses through cost savings.

Failing to comply with ESOS can have serious repercussions. Seven percent of obligated companies failed to comply with the first compliance period leading to the Environment Agency serving over 350 enforcement notices since the compliance deadline. The maximum penalty for failing to undertake an energy audit ahead of the ESOS compliance deadline is up to £50,000 and up to £500 for each working day that the responsible undertaking remains in breach of the mandatory scheme, for a maximum of 80 working days.

The second compliance period for ESOS is approaching make sure your organisation is prepared.

ESOS guidance is available here.