What are the ESOS Regulations?

The ESOS Regulations 2014 were brought in by the UK Government to assess the energy efficiency of large organisations and to identify energy saving opportunities. The legislation aims to make organisations more energy efficient and reduce carbon emissions. Under the new rules, all organisations that qualify under ESOS much complete a mandatory energy assessment and make the necessary energy improvements in order to meet their obligations under the ESOS Regulations. Organisations that quality must carry out ESOS assessments every four years. They must then demonstrate to the Environment Agency that they have complied with their ESOS obligations by a set deadline. The deadline for the first compliance period has already passed, but the deadline for phase 2 of ESOS is 5 December 2019.

How do I know if I qualify?

The new regulations apply to any UK organisation that is considered a large undertaking. This applies to any company that conducts business or a trade with a view of making profit, and any corporate group where at least one UK enterprise qualifies as a large undertaking. Under the ESOS regulations a large undertaking is:

  • Any UK company that employees over 250 people, or
  • fewer than 250 employees but an annual turnover exceeding 50 million euro (£44,845,000) and an annual balance sheet exceeding 43 million euro (£38,566,700).

You must also take part in ESOS if your undertaking is part of a corporate group which includes another UK undertaking that meets either of the above conditions. Examples of undertakings that can qualify for ESOS include limited companies, public companies, partnerships, and universities that receive more than half their funding from private sources. If you are unsure whether you qualify for ESOS phase 2 then you can contact the Environment Agency for advice.

What action should I take to comply?

The simplest way to comply with the regulations is by having an ESOS assessment using one of our EPC offices such as EPC London or EPC Glasgow. This determines the total amount of energy used within an organisation and identifies ways to improve energy efficiency. The Government advise that the cost of the assessment should be quickly recovered through the energy improvements and resulting energy savings.

How do I complete an ESOS assessment?

Here is a useful four step guide to completing your energy assessment and complying with your ESOS obligations:

Step 1: Assess energy usage

The first step is to identify the total amount of energy your organisation has used over the past 12 months. This must include the energy used by industrial processes, buildings, and transport.

Step 2: Identify areas of energy consumption

The rules state that you must then identify your areas of significant energy consumption. These areas must then be assessed during your ESOS energy audit. In order to be complaint, areas of significant energy consumption must account for at least 90% of your organisation’s total energy usage.

Step 3: Nominate a lead assessor

You must then nominate a lead assessor to carry out and monitor your energy audits and any other auditing activities that lead to compliance – such as Green Deal Assessments and Display Energy Certificates. The lead assessor must be accredited and regulated by an approved professional body.

Step 4: Submit notification to the Environment Agency

Once the above has been completed, you must then submit notification to the Environment Agency demonstrating that you have met your obligations under the ESOS Regulations. This must be submitted via the online portal that can be found on the GOV.UK website.

What happens if I don’t comply?

Any organisations that fail to meet their obligations under the ESOS Regulations, will be issued with a non-compliance enforcement notice alongside financial penalties from the Environment Agency. Fines can reach £45,000 for organisations that do not take action to enforcement notices. The Environment Agency will be carrying out compliance checks once the next ESOS deadline passes and reviewing non-compliant organisations on a case by case basis.

Comply with ESOS today – we can help!

Complying with ESOS has a number of great benefits. It means that you’re acting in accordance with government legislation, so you don’t need to worry about penalties or fines. An energy assessment also identifies areas where you can improve energy efficiency within your business. This should cut your energy bills and save you money in the long-run. The next ESOS deadline is fast approaching – get in touch with our friendly team of energy experts today so we can help you meet your ESOS obligations and ensure that you meet the requirements of the scheme.