ESOS! Another mandatory requirement for energy audits

energyauditThe Energy Savings Opportunity Scheme (ESOS) imposes new mandatory requirements for large organisations in the UK to carry out energy audits. Failure to conduct an ESOS assessment and report compliance to the Environment Agency by 5 December 2015 can result in a £50,000 fine.

Participants must measure the total energy consumption from buildings, transport and industrial processes, so the scope is wider than the CRC Energy Efficiency Scheme,  the EU Emissions Trading Scheme and Climate Change Agreements. There can also be overlap with GHG reporting obligations.

ESOS was introduced by the Energy Savings Opportunity Scheme Regulations 2014 which came into force on 17 July 2014. It is estimated that around 7,300 large UK enterprises occupying up to 200,000 buildings will be covered by the legislation

Is your business subject to the new rules?

An organisation will be a participant in ESOS if, on 31st December 2014, it is

(1) an undertaking which has 250 or more employees in the UK; or

(2) an undertaking which has fewer than 250 employees, but has (a) an annual turnover exceeding 50m euros, and (b) a balance sheet exceeding 43m euros; or is

(3) part of a group which includes a UK undertaking that meets criteria (1) or (2) above

An SME can be subject to ESOS if it either

  • qualifies through a corporate group (and therefore the entire UK operations of the corporate group will need to participate in ESOS) - see (3) above, or
  • has a change of status, whereby it meets either of the criteria (1) or (2) above over two consecutive accounting periods. .

How to comply with ESOS

1. Conduct an energy audit to identify cost effective energy efficiency recommendations

90% of the organisation's total energy consumption from buildings, transport and industrial processes (known as the 'significant energy consumption') must be subject to one of the following during each phase of the scheme:

(a)           ESOS Energy Audit

(b)          Display Energy Certificate

(c)           Green Deal Assessment

(d)          ISO 50001 Energy Management System

Participants are not required to implement energy efficiency recommendations identified by their ESOS assessments.

2. Report compliance to the EA

By 5th December 2015 (for phase 1), organisations must:

(a)           ensure that the ESOS assessment has been reviewed by a board level director and approved by a Lead Assessor; and

(b)          notify the EA that it has complied with the scheme

The DECC guide to the scheme is available here.

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