Energy Savings Opportunity Scheme (ESOS)

Why do we have the Energy Savings Opportunities Scheme?

In meeting the challenges of ever-increasing energy security risks, as well as reducing greenhouse gas emissions in a cost-effective manner, the Government has established the Energy Savings Opportunity Scheme (ESOS) to implement Article 8 (4-6) of the EU Energy Efficiency Directive (2012/27/EU).

Qualification Threshold (incorporating the latest changes}

ESOS applies to all UK-based organisations and corporate groups that meet the qualification criteria below and requires them to undertake a mandatory assessment, every four years, of energy use and energy efficiency opportunities across the organisation and its UK locations.

Any UK-based company that either:

employs 250 people or more.
and/or has a turnover greater than £44m and an annual balance sheet greater than £38m.
an overseas company with a UK-registered establishment which has 250 or more employees paying UK income tax.

How do I comply with the regulations?

ESOS is a mandatory energy assessment and requires large organisations to measure their total energy consumption, and their areas of significant energy consumption across their buildings, processes and transport. These audits identify and prioritise cost-effective energy savings recommendations. Compliance with Phase 3 must be completed and reported to the Environment Agency by no later than 5th December 2023.

How Eco3 Partnership can help?

Eco3 Partnership provides a service that encompasses all of the aspects required under the ESOS Assessment and can provide as little or as much of these aspects as your business requires. Where a business has its own energy managers it may only require a review and Lead Assessor sign-off, or where required we can provide a full managed service to carry out every aspect of your ESOS Assessment, the choice is yours. These include:

Identify areas of significant energy consumption that account for at least 95% of the total energy consumption (Phase 3 work can be started now).
Measure the total energy consumption for buildings, industrial processes and transport (Phase 3 of this aspect can start on 1st January 2022).
Data collation for all aspects of energy consumption within the organisation across your buildings, processes and transport activities.
Site visits as required to carry out ESOS Compliant Energy Audits.
Provision of a full Site Energy Survey.
Energy consumption profiling.
Creation and maintenance of detailed and comprehensive ESOS Evidence Pack.

Eco3 can also help you with the latest amendments to ESOS reporting:

Assistance with the latest changes to the government's main changes to ESOS Phases 3 and 4 are shown below:

The inclusion of a standardised information template to ensure that all key information is recorded (something ECO3 Partnership has always included since ESOS Phase 1 was introduced)
- Organisational structure
- Route to compliance
- Business SIC codes are required to be included

De-minimis exception change
- The de-minimis exception is reduced from 10% to 5%
  - Increase in the number of site surveys that should be carried out
  - The likelihood of more transport reporting is included in the report

The requirement to share reports with subsidiaries and improve information on the next steps
- Improve the understanding and likely implementation of energy efficiency actions with the rest of the group

The inclusion of intensity metrics
- This is designed to bring ESOS reporting closer to other reporting schemes such as SECR

The requirement to set a target or action plan following the Phase 3 compliance deadline, will be used as the base year to compare an organisation's Phase 4 reports against
- This includes the requirement to include a target and action plan, that should be reported on annually either through a separate function on the ESOS portal or within the energy efficiency narrative for those organisations that ALSO have to report on SECR

The collection of additional data for compliance monitoring and enforcement
- In previous phases, only some of the information gathered was submitted during reporting. Moving forward much more of the information gathered is likely to require submission to assist with monitoring and enforcement

What are the penalties for non-compliance?

a fixed penalty of up to £50000.
an additional £500 per day starting the day after non-compliance is subject to an 80-day maximum.
and your organisation's name published for non-compliance.

Likely changes to Phase 4 ESOS

The qualification is likely to be a lower threshold and only one of the following criteria:
- 250 employees
- £36m turnover
- £18m balance sheet

A requirement to report annually if targets or action plans have been achieved either through the ESOS portal or via SECR

Targets and action plans are to be prepared based on ESOS report findings.

Net Zero reporting will form part of future ESOS reporting and will be reflected in ESOS recommendations.

Partial exemption through GDA and DECs will no longer be allowed.

Recognised reporting standards will be required. e.g. BS EN 16247, ISO 50002

ESOS reports will have to give explicit advice on:
- Data collection
- Monitoring and target controls and settings
- Staff training and awareness

The Department for Business Energy, Industrial Strategy (BEIS) is currently working with BSI on the production of a new Net Zero audit PAS standard, which will enable ESOS participants to implement the proposal in Phase 3 on a voluntary basis.BEIS is currently working with BSI on the production of a new Net Zero audit PAS standard, which will enable ESOS participants to implement the proposal in Phase 3 on a voluntary basis.

Call us on +44 (0)203 824 2402 (London) +44(0)141 724 1456 (Glasgow) or email us enquiries@eco3partnership.com