ESOS Phase 2 Update: Energy Savings Opportunity Scheme

Background

Under the ESOS Regulations 2014 All large organisations in the UK must carry out ESOS assessments every 4 years. The government set up ESOS to implement Article 8 (4 to 6) of the EU Energy Efficiency Directive (2012/27/EU).

Qualifying Criteria

A large organisation or undertaking is defined as any UK company that either:

  • employs 250 or more people, or
  • has an annual turnover in excess of 50 million euro (£38,937,777) and an annual balance sheet total in excess of 43 million euro (£33,486,489).

Also:

  • overseas companies with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK).

ESOS mainly affects businesses. It can however also apply to not-for-profit bodies and any other non public sector undertakings that are large enough to meet the qualification criteria.

Public sector organisations do not usually need to comply with ESOS. For more information on organisations that do not need to comply see section 1.2 of the full ESOS Guidance.

Compliance Requirements:

In order to comply with ESOS an energy audit must meet the following criteria. It must:

  • therefore be based on 12 month’s verifiable data
  • also analyse the participant’s energy usage and energy efficiency. This is done through energy profiling.
  • identify energy saving opportunities. Such opportunities should be practicable and be demonstrably cost effective.
  • include site visits during an audit.
  • be reported to the relative national scheme administrator.
    • Environment Agency for organisations whose registered office is in England.
    • Natural Resources Wales for those based in Wales.
    • Northern Ireland Environment Agency for those based in Northern Ireland.
    • Scottish E.P.A for those based in Scotland.
    • Secretary of State for Energy and Climate Change for organisations whose activities consist wholly or mainly of offshore activities.

Compliance Deadlines & Penalties:

We are now in Phase 2 of the ESOS compliance scheme. Organisations were required to submit information for Phase 1 by 29 January 2016. The regulations now require compliance for Phase 2 by 5 December 2019.

Various penalties can thus be imposed including a penalty for non-compliance which is:
• A requirement to conduct an ESOS Assessment by a date specified by the compliance body; and/or A penalty of up to £50,000; and/or
• An additional £500 per day penalty for each day starting on the day after the compliance date that the organisation remains non-compliant, subject to a maximum of 80 days; and/or publication of details of non-compliance

For further advice please contact EES Consultancy team. EES Limited

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