Energy Savings Opportunity Scheme (ESOS)…

ESOS is a mandatory energy assessment scheme for large businesses and organisations in the UK that meet the qualification criteria, and involves completing an audit of their energy usage. As of this posting (February 2016) thousands of firms are still not compliant as the deadline passes. The Environment Agency has confirmed that more than 3,000 businesses remain non-compliant with ESOS. The Environment Agency stated that as of the 29th of January, just under 6,000 companies had registered as compliant and an additional 1,000 businesses had notified their intention to comply over the coming weeks. The initial ESOS deadline was the 5th of December 2015, but due to the original low turnout, the deadline was extended to the end of January.

A general briefing of the ESOS program is outlined below, along with qualification criteria, important dates, penalties, and benefits of the program. Additional official information can be found at Gov.uk, and the Carbon Trust websites.

 

Qualification?

ESOS applies to large UK incorporated enterprises and their corporate groups, it does not apply to the public sector. Your organisation qualifies if it is UK incorporated, and on 31-Dec-14 meets any one of the following criteria:

  • employs at least 250 people
  • employs less than 250 people but has an annual turnover in excess of 50 million euro, and an annual balance sheet
  • in excess of 43 million euro
  • is a part of a group that includes at least one entity that meets either of the criteria above

To find out if you qualify, take your employee numbers, turnover and balance sheet totals from the accounts for the financial year ending either:

  • on the qualification date of 31 December 2014
  • in the 12 months immediately preceding the qualification date of 31 December 2014

Organisations that qualify for ESOS must carry out ESOS assessments every 4 years. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.

 

Action Points and Timelines
  • 31-Dec-14 – assess if you qualify for participation in the scheme, if yes, then you must appoint an ESOS Lead Assessor to perform the audit. Direct Power is working with the Carbon Trust to offer our clients ESOS Audits
  • 05-Dec-15 – deadline for submission of energy audit

 

Non Compliance

Harsh fines and mandatory audits will be levied against those who should, but do not comply, so ignore ESOS compliance at your own risk. Unfortunately there are still a large number of organisations failing to comply, even after the recent extension.

On the bright side, at the time of writing, no financial penalties have been applied to companies that failed to comply to date. But penalties are anticipated in the future, and according to the Carbon Trust, we are currently in a grey area. The Environment Agency (EA), is beginning to mail notice letters to non-compliant companies, giving them deadlines to rectify the non-compliance or to face penalties. While there is no guarantee, as the EA has final authority, it is believed that a grace period will be extended, i.e. no financial penalties will be levied on organisations that comply before the middle of April, 2016.

If you qualify for ESOS and have failed to comply, a sensible approach would be to advise the EA of your status, along with a proposed timeline and plan for compliance confirmed by your appointed Lead Assessor.

 

Benefits

Prompt compliance of this audit will help you to identify energy savings, the sooner you complete the audit the sooner you can implement changes to reduce your energy spend. The Government estimates that a typical ESOS audit will identify potential cost savings that are more than 13.5 times greater than the cost of the audit.

Direct Power can assist in facilitating ESOS audits to ensure you are compliant, or simply answer any question that you may have, so please contact us at anytime!