What is ESOS?
The ESOS Regulations 2014 were introduced by the UK Government to promote and improve energy efficiency within large organisations. Under the scheme, any qualifying organisation must assess their energy usage at least once every four years and identify any energy-saving opportunities. These improvements must then be implemented to improve the overall energy efficiency of the organisation. The Environment Agency must be notified of this action by a certain deadline, to demonstrate that qualifying organisations have met their ESOS obligations.
What is ESOS Phase 2?
The first ESOS deadline (known as Phase 1) was in December 2015. However, the second ESOS deadline (Phase 2) is set for 5 December 2019. The preparation period began in January 2018, so now is the time to act to ensure that you have complied with the regulations once the deadline comes around. Organisations should be aware that Brexit and any resulting policy changes, will have no effect on the ESOS regulations as it stands.
How do I know if I need to comply?
Under the regulations, a UK organisation falls under ESOS if it comes within the scheme’s definition of a large undertaking. To meet this criteria, an organisation must:
- Employee over 250 members of staff.
- Or, have less than 250 members of staff, but a turnover of more than 50 million euros (£38,937,777) and an annual balance sheet total of more than 43 million euro (£33,486,489).
It is worth noting that the majority of public sector bodies do not fall within ESOS. However, there are some exceptions to this rule. For example, public organisations that receive some level of public funding may still fall under ESOS – this may apply to organisations like Universities. If you would like some further advice on whether your organisation meets the ESOS criteria, then you can contact the Environment Agency.
What should I do if I qualify?
If your organisation meets the ESOS criteria, then you will need to carry out an energy assessment. To do this, you must complete the following five steps:
1. Measure total energy usage
Firstly, you must measure the total energy consumption within your organisation. This must be taken over a 12 month period and cover all energy usage – including energy used by transport, buildings and industrial processes.
2. Identify areas of significant energy consumption
You then need to identify the areas of significant energy consumption – these must account for a minimum of 90% of the total energy usage within your organisation.
3. Conduct an energy audit or other route to compliance
The areas of significant energy consumption must then be subject to an ESOS compliant energy audit. This is the most common way to comply with the regulations. However, there are alternative routes to compliance, for example – a Green Deal Assessment, a Display Energy Certificate, or a certified ISO 50001 Energy Management System.
4. Appoint an approved Lead Assessor
Unless compliance can be fully demonstrated via a certified ISO 50001 Energy Management System, an approved Lead Assessor must then be appointed. They are responsible for overseeing your energy audits and any other auditing activities undertaken to comply with the ESOS regulations.
5. Report compliance to the Environment Agency
The final step, is to report compliance to the Environment Agency. You must also keep records to provide evidence of how you have met your ESOS obligations.
How much should it cost?
The cost of having an ESOS compliant energy audit (or another route to compliance) will vary, depending on the outcome of the assessment and the level of work required. While it may seem expensive, the Government advises that the cost of the audit should be quickly recovered, by energy efficient improvements and subsequent energy savings within your organisation.
How do I report compliance?
All qualifying organisations must submit an ESOS notification of compliance to the Environment Agency by the above deadline. The notification must include details about your organisation and demonstrate how you have complied with the ESOS regulations. This must be submitted on the online portal, which can be found on the GOV.UK website.
What happens if I don’t comply?
After the Phase 2 deadline, the Environment Agency will carry out compliance checks and review non-compliant organisations on a case by case basis. Any organisation that fails to comply with the ESOS regulations will be issued with a non-compliance enforcement notice, alongside potential financial penalties of up to £45,000. Organisations in breach of the ESOS regulations may also be publicly named.
How can Nexus help?
It is important to remember that ESOS has a number of benefits. The energy assessment will provide you with a detailed analysis of the energy usage within your consumption, and help you identify ways to improve energy efficiency. This could result in substantial energy savings within your business. Our accredited energy professionals can help you comply with your ESOS obligations, so you don’t have to worry about potential penalty notices or fines once the deadline comes round. Get in touch today and find out how we can help you comply with the scheme and take advantage of the potential energy cost savings.