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Everything you need to know about ESOS

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for large organisations in the UK.

Introduced as the UK government’s response to Article 8 of the EU Energy Efficiency Directive (EED), it requires all large undertakings in the UK to undergo an assessment of energy use and energy efficiency opportunities.

Organisations are required to ensure that all of their significant energy uses in the UK are covered by one or more of the routes to compliance. This could mean a combination of ESOS energy audits, Display Energy Certificates, Green Deal Assessments, or by operating an Energy Management System certified to ISO 50001.

Overseas energy use is excluded from ESOS, but undertakings within the EU will have to comply with local legislation.

This a mandatory audit repeated every four year and 2018 sees ESOS (phase 2) commencing.

What are the benefits?

Aimed at increasing energy efficiency to improve business profits and increase competitiveness as well as combatting climate change.

Across the scheme (2015 – 2030), the government estimates that after ESOS (Phase 2) the net benefit to the UK will around £1.6 billion.

Who will it affect?

Businesses likely to be in scope for ESOS meet the following criteria

  1. Operate a business with 250 or more employees
  2. A business that operated with less than 250 employees but:
    - Has an annual turnover exceeding £39 million
    - A balance sheet exceeding £33.5 million
  3. Is part of a corporate group which includes an undertaking which meets either of the above criteria

Organisations subject to the Public Contracts Regulations (2006) are exempt, although some trusts, public companies and not-for-profit bodies may be included.

Audit requirements

ESOS Energy Audits, Green Deal Assessments and DECs must be conducted by suitably qualified, registered individuals in line with agreed and appropriate standards such as BS EN 16247-1.

All ESOS Assessments must be reviewed by a Lead Auditor to verify compliance and signed off by a Director or Board member within your organisation. Lead Auditors must be listed on an approved register of consultants and qualified to PAS 51215:2014.

ISO 50001:2011 Energy Management Systems (EnMS) must be fully certified by a UKAS accredited body and must be verified as covering 90% of your total energy use by a Lead Assessor in order to comply. If the EnMS does not cover all areas of significant energy use, additional assessment work will be required.

When to participate?

ESOS occurs in four-yearly compliance phases and ESOS (Phase 1) completed in 2015. It is important to assess whether you need to participate in ESOS by the qualification dates on each phase.

For ESOS (Phase 2) the qualification date is 31st December 2018. The four year compliance phase runs from 6th December 2015 until 5th December 2019. The compliance date for ESOS (Phase 2) is 5th December 2019

For ESOS (Phase 3) the qualification date is 31st December 2022. The four year compliance phase runs from 6th December 2019 until 5th December 2023. The compliance date for phase 2 is 5th December 2023.

How does the scheme work?

The ESOS assessment must cover all the UK operations over a twelve month period. It requires participants to do the following three things:

1. Measure total energy consumption
Consumption should be measured across buildings, transport and industrial activities.

2. Conduct energy audits to identify cost-effective energy efficiency recommendations.
During each phase of the scheme at least 90% of your total energy consumption must be subject to:

  • An ESOS compliant energy audit
  • A Display Energy Certificate
  • A Green Deal Assessment or
  • A certified ISO 500001 Energy Management System

3. Report compliance to Environment Agency
For this phase you must notify the Environment Agency of compliance with the scheme by 5th December 2019. The assessment needs to have been reviewed by a board-level director and approved by a lead assessor. It is not a requirement to implement the energy efficiency recommendations identified, but the associated financial benefits will not be received until the recommendations are acted upon.

Steps towards ESOS

  1. Establish boundary for ESOS and develop a robust strategy for compliance
  2. Measure your total energy consumption for buildings, industrial processes and transports
  3. Identify areas of significant energy consumption, accounting for at least 90% of your total energy consumption
  4. Appoint a lead assessor to oversee the ESOS assessment
  5. Identify cost-effective energy efficiency recommendations for areas of significant energy consumption or use existing activity as a route to compliance.

Phase 2 of ESOS is now underway and we’ve partnered with WSP – combining their energy consultancy expertise with our energy insight solutions – to help organisations fulfill their ESOS Phase 2 requirements. Find out more here.