Innovative Energy Consultancy Ltd
Innovative Energy Consultancy Ltd

Does the new ESOS scheme apply to your business?

The Government’s long-awaited Energy Savings Opportunity Scheme (ESOS) comes into force in December.  

ESOS aims to encourage large organisations to save energy and money by undertaking regular assessments to identify cost-effective energy savings measures. Non-compliance could lead to financial penalties.  

As experts in legal compliance on energy matters, we are able to provide an advisory and auditing service to companies affected by ESOS.

Which organisations have to comply with ESOS?

Small and medium-sized businesses are not affected by ESOS.  Companies have to comply if they are classed as a ‘large undertaking’. That comprises organisations which employ at least 250 people or have an annual turnover above £40m and an annual balance sheet above £36m on 31st December 2014 (31st December 2014 to 5th December 2015 is classed as the ‘first period’ for ESOS compliance).  

Who oversees ESOS compliance?

•    England – Environment Agency
•    Northern Ireland – Northern Ireland Environment Agency
•    Scotland – Scottish Environment Protection Agency
•    Wales – Natural Resources Wales

What do organisations have to do?

If your organisation has achieved the ISO 50001 energy management standard you will not be required to undertake any additional assessments or audits in order to comply with ESOS – you’ll simply have to notify this fact to the Environment Agency.

Companies which are not fully certified to ISO 50001 will have to undertake an ‘ESOS assessment’ which means you’ll have to:

1. Calculate your total energy consumption.

This is the energy used by assets held or activities carried out by your organisation or group. This includes the energy consumed by buildings, industrial processes and transport.

2. Identify your areas of significant energy consumption.

This is the energy used by assets held, or activities carried out, by your organisation that account for at least 90% of your total energy consumption. You then need to:
•    find out whether ISO 50001, DECs or GDAs cover any of your areas of significant energy consumption
•    identify whether ESOS compliant energy audits have been, or need to be, carried out for the areas of significant energy consumption not covered by ISO 50001, DECs or GDAs
As long as 90% of your total energy consumption is covered, you can use a mix of approaches with some of your energy consumption covered by ISO 50001; some by DECS or GDAs and some by ESOS energy audits.

3. Appoint a lead assessor

You need to appoint a lead assessor to carry out and oversee or review your energy audits and overall ESOS assessment. Lead assessors can be employees or external contractors as long as they are members of an approved professional body register (IEC is an approved lead assessor for ESOS).

4. Notify the Environment Agency

You need to submit your ESOS notification of compliance to the Environment Agency when you have undertaken an ESOS assessment and are compliant with your obligations.
You must do this by 5 December 2015, and if applicable, every 4 years afterwards.

5. Keep records

You need to keep records of how you have complied with ESOS in an evidence pack. There is no set format for this.

ESOS compliant energy audits
An ESOS compliant energy audit must be:
•    based on 12 months’ verifiable data
•    analyse the participant’s energy consumption and energy efficiency via energy consumption profiling
•    Identify energy saving opportunities (these must be reasonably practical and cost-effective to implement).

It should be noted that there is no regulatory requirement for participants to implement the energy saving opportunities identified. This is for each organisation to determine themselves.

Organisations are expected to carry out site visits as part of their ESOS audits, ensuring they have collected and analysed data for all their areas of significant energy consumption.

Organisations with multiple sites or assets that are identical or very similar, can take a proportionate approach and apply the energy saving opportunities identified in their site visits to their wider portfolio. The lead assessor and participant organisation should determine a suitable site visit sampling approach to reflect the energy consumption patterns of their assets and activities. In a compliance audit the regulators will look for well-reasoned and documented justifications for the approach you took.

Any questions?

To find out more about the ESOS scheme, or to discuss our compliance audit services, please get in touch today on 01244 571830, we’ll be pleased to help.

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