Wednesday, 5 November 2014

John Guthrie, Energy Efficiency Manager, ABB writes:

What is it?

The Energy Savings Opportunity Scheme, or ESOS for short, is an energy assessment and energy savings scheme for large businesses, that has been created by the UK government’s Department for Energy and Climate Change (DECC).

The scheme targets large organisations, defined if:

You have 250+ employees
Your turnover is greater than £42.5 million
Your balance sheet shows more then £36.5 million

A business considered large according to the above criteria must:

Measure total energy consumption
Carry out compulsory energy audits to identify cost effective energy
  efficiency improvement projects
Register their energy audits with the Environment Agency

The energy audits that large businesses have to carry out under this new ESOS scheme have to account for 90 percent of all the energy used, which includes:

Electricity consumption across all sites
Natural gas consumption across all sites
Fuel used for heating across all sites
Fuel used for transport for business operations

Organisations that operate under the Public Contracts Regulations 2006 such as local authorities, government departments and businesses awarded supply and service contracts by the UK government, like public infrastructure or transport companies, are the only businesses that are not required to participate in the ESOS scheme.

Why was ESOS created?

ESOS has been created by the Department for Energy and Climate Change (DECC) because the UK has to meet obligations set out in the EU Energy Efficiency Directive.  This Directive states that regular energy audits for large enterprises must be introduced to encourage the up-take of cost effective energy efficiency improvement measures.  ESOS is simply the UK’s way of implementing this.

How do I comply? 

Under ESOS, 90 percent of total energy consumption must be accounted for in an energy audit, carried out by an ESOS approved assessor.

These audits must be carried out and submitted by 5th December 2015 and every four years after that, with each audit required to be registered with the Environment Agency.

You can appoint an approved assessor from an external company to carry out an ESOS audit for you. They have to be an assessor approved by the Environment Agency to be able to carry out an ESOS audit.

Does ESOS compete with the CRC Scheme?

ESOS does not replace any of these existing schemes and is an additional requirement for qualifying businesses regardless of whether they are carrying out work to comply with an existing scheme.

The scheme does however have significant overlap with a number of existing UK energy efficiency schemes, such as the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, climate change agreements and mandatory greenhouse gas reporting.

Under ESOS you can make full use of data from these other schemes as part of an ESOS assessment, which avoids duplicate work.  Some good news at least!

If you are already using an ISO 50001 Energy Management System to monitor energy then you do not have to carry out an energy audit under ESOS. However, you do still need to make the Environment Agency aware of your ISO 50001 accreditation by the 5th December 2015 deadline.

What happens if businesses don’t comply?

Much like other schemes in place in the UK, non-compliance to ESOS is dealt with by the Environment Agency who can issue significant fines to companies that fail to comply.

This includes fixed civil penalties of anywhere upwards of £50,000 for the most severe violations, and daily fines of £500 per day for a maximum of up to 80 days issued if a company carries on breaking the rules after the compliance date.

Failing to register on-time, disclose information, submit complete and accurate data and maintain adequate records are just a few of the infringements that are punishable under the rules of the scheme.

As well as the significant financial penalties for non-compliance with ESOS, the Environment Agency also has the power to publish the name of the non-compliant parties, the details of their failure to comply and the amount of fines imposed.  This is potentially very damaging to any bids you may have ongoing and could severely damage reputations and see contracts lost.

This makes compliance with ESOS a much more desirable and a less reputation damaging option, than the more public ‘naming and shaming’ currently proposed by the Environment Agency to police the scheme.

For more information about ESOS, consult the UK government website, ESOS helpdesk and ESOS guidance notes

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  1. Hi Sam, I'm agree on you and I read your full explanation on your blog. But sometimes they are not easy to save and it cause a huge expenses on some energy consumptions. That's why we need this Accredited Energy Auditors in Newcastle to help solved our problem. You can also read about their services here.