What you need to know about ESOS Phase 2?

The Energy Saving Opportunity Scheme (ESOS) was introduced by the Government to help improve the energy efficiency of large organisations in the UK. Under the new rules, any organisation that meets the ESOS criteria must calculate their energy usage and assess their energy performance at least once every four years, in order to identify energy-saving opportunities. All qualifying organisations must then notify the Environment Agency that they have met their ESOS obligations by a specific deadline. The first deadline period has now passed, but the deadline for phase 2 of ESOS is 5 December 2019.

What is ESOS phase 2?

The first ESOS compliance deadline – known as Phase 1 – was in December 2015. The second ESOS compliance deadline – referred to as Phase 2 – has been set for 5 December 2019. The preparation period began back in January 2018, so all qualifying organisations should be taking action now to ensure that they meet their ESOS obligations by the time the deadline arrives.

What organisations qualify?

Under the new 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).

Organisations should be aware that while most public bodies don’t fall under the ESOS criteria, there are some expecting to this rule. For instance, Universities that receive a high portion of their funding from private sources may qualify under ESOS. Some non-for-profit organisation like large charities will also be classed as a corporate body and as such are considered to be an undertaking. If you would like some further advice on whether your organisation meets the ESOS criteria, then you can contact the Environment Agency.

How do I comply with ESOS phase 2?

If your organisation meets the above criteria, then you will need to contact EPC London or EPC Glasgow and take the necessary action to ensure compliance. To do this, you must complete the following steps:

1. Calculate total energy consumption

Firstly, you must calculate the total energy consumption within your organisation. This must be taken over a 12 month period and cover all energy usage. This includes 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 used within your organisation.

3. Complete an energy assessment or other route to compliance

Any areas of significant energy consumption must then be subject to an ESOS energy assessment. This is the simplest way to comply with the regulations. However, there are alternative routes to compliance, for example – a Display Energy Certificate, a Green Deal Assessment, or a certified ISO 50001 Energy Management System.

4. Appoint a Lead Assessor 

An accredited Lead Assessor must then be appointed to oversee your energy audits and any other auditing activities undertaken to comply with the ESOS regulations.

5. Notify the Environment Agency of compliance

The final step is to notify the Environment Agency that you have met your ESOS obligations. Remember that you must also keep records to provide evidence of how you have compiled under ESOS. This must all be submitted via the online portal before the ESOS phase 2 deadline on 5 December 2019. You can submit your notification via this link found on the government website.

How much will this cost?

The cost of having an ESOS energy assessment will vary between organisations, depending on the outcome of the assessment and the level of work required. Complying with the ESOS Regulations may seem expensive, but the Government expects that the cost of the assessment should be swiftly recovered, through the energy efficient improvements and subsequent energy savings within your organisation.

What happens if I don’t comply?

Any qualifying organisations that fails to meet their obligations by the ESOS phase 2 deadline will be issued with a non-compliance enforcement notice, alongside potential financial penalties of up to £45,000. The Environment Agency will be carrying out non-compliance checks once the phase 2 deadline has passed in December.

How can Nexus help?

Our accredited energy experts will ensure that your organisation complies with the ESOS Regulations, so you don’t have to worry about potential penalty notices or fines once the December deadline arrives. Get in touch today and find out how we can help you comply with your ESOS obligations and take advantage of the potential energy cost savings.