Some Simple Solutions for Serious Savings
ESOS compliance doesn’t need to be daunting: it can save your business thousands in energy and if you want to avoid financial penalties, you need to act now, says Warren Pope from energy performance specialists Elmhurst Energy.
Far from being a costly paper work exercise, the ESOS has been designed to help businesses understand their energy consumption and to dramatically lower energy bills and carbon consumption. An approved ESOS Lead Assessor is responsible for working with you and the key parties in your organisation to identify opportunities to reduce energy costs and target energy waste, detailing those opportunities in your ESOS Report. Whether you have seen the notification or not, whether the issue is high profile or not, the obligation still stands and the deadline for undertaking the first audit is 5th December 2015.
There are many misconceptions about the scheme but be sure of one thing: if ESOS applies to your business and you don’t meet the December deadline, there are potentially going to be significant fines coming next year. It is estimated that those who have still failed to act may collectively be on course for a total of around £490m in government fines.
So how do you know if ESOS applies to you? Firstly, ESOS will apply to your company if it has more than 250 employees or an annual turnover exceeding €50m and a balance sheet exceeding €43m. For UK incorporate groups, if any part of the group qualifies for ESOS, then the whole group must comply – even if you are a Small Medium Enterprise (SME). Don’t fall into the trap of believing that as you haven’t heard much about ESOS within your company then it does not apply to you or that you may be one of the small exceptions. If your business meets the above criteria then you should contact a consultant immediately.
The ESOS Audit is a complex process that can take anything from
40 | ESOS LEGISLATION
two-to-six months to complete. If you are affected, then you need to act immediately to appoint an ESOS Lead Assessor and to demonstrate that you are doing all you can to meet the imminent deadline. The take-up of ESOS Audits has been slower than expected. According to the Environment Agency, just 200 notifications from the 10,000 organisations affected have so far been received. So when industry wakes up to the facts there is likely to be a significant shortage of ESOS Lead Assessors, especially as we near December 2015.
“It is estimated that those who have still failed to act may collectively be on
course for a total of around £490m in government fines.”
For some businesses, ESOS is being viewed as nothing more than an unnecessary cost. Don’t see it in this way. ESOS is designed to increase awareness of real energy consumption and make it easier for businesses to take action to lower their energy bills and transport costs. As such, the average bill saving per enterprise is estimated at around £35,400 from the initial audit, with net savings for businesses across the UK in the region of £1.6bn, according to the Department of Energy and Climate Change’s (DECC) Guide to ESOS.
There is also the matter of fines. The Government’s deterrent for ignoring ESOS includes being publically highlighted and fined for non- compliance. Fines include:
• a fixed penalty of up to £5,000 for failing to notify the Scheme Administrator of ESOS Compliance
• a fine of up to £5,000 for failing to maintain adequate records demonstrating compliance
• a fine of up to £50,000 for failing to undertake the audit, plus £500 per day from the day after the ESOS compliance deadline
You can add to this the further cost of energy inefficiency and overpayment in energy and transport costs in the absence of an ESOS audit and recommendations.
Some businesses may feel they can show evidence of energy saving initiatives easily enough if asked. This is not the same as ESOS compliance. Yes, ESOS is intended to encourage energy efficiency but it requires the completion of a particular detailed audit managed by a qualified ESOS Lead Assessor and although other energy efficiency evidence will be helpful in completing the ESOS audit, it does not replace one. The only exception being ISO 50001 which where present, negates the requirement for an ESOS audit.
Elmhurst Energy Services, are part of the Elmhurst Energy Group of Companies, and whose approach to energy auditing, comes from a 20-year passion for energy rating and a mission to create a more energy efficient society through valuable assessment and consultancy. We work very much from the viewpoint that ESOS should be less about pain and more about opportunity for companies submitting themselves for assessment. The ESOS audit will involve looking at how a business uses energy, including how energy
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