The countdown has begun for businesses to meet the requirements of the next phase of the government’s Energy Savings Opportunity Scheme (ESOS).
Although the deadline of December 5, 2019 may seem a long way off, it’s vital for companies to act now – not only to get measures in place to make significant savings on energy bills but to help to cut UK carbon emissions.
Failure to comply with Phase Two of ESOS could also result in significant financial penalties.
Raja Khan, commercial director at Inteb Managed Services, explained: “Even though the deadline for compliance with ESOS Phase Two is two years away, it is crucial for businesses to act now and start putting measures in place to make sure they are compliant in time.
“Leaving it too late can cause challenges, as the original Phase One proved when a large number of organisations – almost half – failed to achieve compliance until months after the deadline.
“Also at stake is the chance to make energy and cost savings now, by implementing energy-saving initiatives. With electricity prices forecast to rise substantially over the next three years, the earlier businesses start to comply with ESOS, the better.”
ESOS is a mandatory UK energy assessment and energy saving scheme which requires compliance by large organisations. It was introduced to incentivise these businesses to implement energy-saving measures and help to cut UK carbon emissions.
Businesses need to carry out an audit of their energy-consuming activities and identify cost-effective energy-saving measures once every four years.
Companies need to comply with ESOS if they have:
- More than 250 employees
- An annual turnover of more than €50m
- An annual balance sheet of more than €43m
- Before the deadline date of December 5, 2019, businesses need to comply through an approved route to compliance such as:
Measure their total energy consumption – energy used, transport fuel and Industrial process
- Conduct audits to identify cost-saving energy efficiency opportunities for 90 per cent of the total energy
- Report compliance to their national scheme administrator – the Environment Agency in England, SEPA in Scotland, NIEA in Northern Ireland and NRW in Wales.
Alternatively, organisations can comply automatically when 100 per cent of their energy use is certified to ISO 50001. This requires early action as it often takes well over a year for companies to implement an energy management system and achieve certification.
However, the one element of ESOS compliance that businesses are not yet formally able to complete is collecting the data for reporting their total energy consumption. The earliest this can begin is the start of 2018 as ESOS compliance requires a 12-month period of total energy consumption data which includes the qualification date of December 31, 2018.
In the meantime, Inteb Managed Services recommends organisations confirm if their legal entity will need to comply. If a participant, plan for compliance through data collection and undertake ESOS compliant energy assessments of the largest energy consuming elements of your organisation.
This early action is key to a smooth operation for ESOS compliance. Apart from the potential consequences of fines for non-compliance, it will also help to avoid some of the bottlenecks and challenges that occurred during the first phase of ESOS when around 2,800 organisations sent notifications that they would be late reporting compliance.
Compliance audits for the first phase revealed that only 16 per cent of participants were fully compliant and 75 per cent needed to take remedial actions to become compliant. Therefore instructing an experienced Lead ESOS Assessor and experienced advisory team will be beneficial to your organisation in Phase 2.
Inteb Managed Services is able to help large organisations meet Phase Two requirements of ESOS. Please get in touch with Suzanne Roberts via 07983 020402 or email@example.com to discuss your organisation’s needs.