FEATURE ENERGY MANAGEMENT


TAKING UP THE ESOS CHALLENGE The Energy Savings Opportunity Scheme (ESOS) places a mandatory requirement on


companies over a certain size to perform an assessment of their energy use. Simon Alsbury, managing director of Cambridgeshire-based Energise, discusses the importance of ESOS


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SOS is driven by the EU Energy Efficiency Directive (2012/27/EU)


and enshrined in UK law by the Energy Savings Opportunity Scheme Regulations 2014. Administered by the Environment Agency (EA), it places a legal obligation on large organisations across the UK to undertake a compulsory energy assessment and identify energy savings on a four-year cycle. But what does it entail and why should you comply? ESOS applies to organisations in the


UK with more than 250 employees, or with an annual turnover of more than €50m and an annual balance sheet total in excess of €43m. It also applies to companies that are part of a large corporate group that meets one of these criteria. Companies that qualified under Phase I of ESOS had until 5 December 2015 to ensure that: • total energy consumption was measured across all the organisation’s buildings, transport and industrial activities; • at least 90 per cent of the total energy consumption underwent an ESOS-compliant energy audit; • an Accredited Lead ESOS Assessor was appointed to compile and assess compliance; • compliance was reported to the EA by one of four routes; an ESOS Energy Audit, ISO 50001 Certification, a Display Energy Certificate or a Green Deal Assessment. It is generally accepted that most organisations change considerably


over a period of time, and so ESOS operates on a four-year cycle, ensuring that companies generate up-to-date figures about their energy use on a regular basis. Halfway through Phase II, companies should now be thinking about the next deadline, 5 December 2019.


REAPING THE BENEFITS The idea behind ESOS is to incentivise organisations to look at their energy usage and associated costs, identify opportunities for improvement and build a business case to support the implementation of these findings. While there is no obligation to do any more than demonstrate compliance with the regulations, there are clear benefits to doing so. Experience has shown that fully engaging with the ESOS process, and implementing the energy saving measures identified, can reduce annual costs by many times the capital investment involved. These savings make a convincing business case to present at a board meeting. The benefits of ESOS extend far beyond the cost of compliance. Innovative companies will use ESOS as a catalyst to drive change within their organisation, decreasing operating costs and reducing carbon emissions. In turn, this creates an opportunity to share the good news and inspire others, which is excellent publicity. It is a win-win situation. The penalty for non-compliance is considerable. With ESOS Phase I, some


2,800 companies were late complying, 50 of which have since been served with an enforcement notice. A further 1,500 failed to contact the EA, resulting in the issue of another 300 enforcement notices. Many organisations believed they were exempt, later discovering to their cost that this was not the case, and only 16 of the 200 companies audited by the EA were confirmed to be compliant without the need for remedial action. With a £50,000 fine for non-compliance it is vital to get ESOS right.


IT IS NEVER TOO EARLY TO START The deadline for ESOS Phase II may seem a long way in the distance, but it will come round fast. Companies would be well advised to start the process at the earliest opportunity, whether they are new to ESOS or renewing their compliance. Early engagement will: help efficient planning of site visits/audits; minimise disruption to the business; allow data collection challenges to be addressed early; ensure a Lead Assessor is available; and enable more focus on the longer term requirements of the data/assessment. As the deadline approaches, demand


for Lead Assessors will increase and availability decrease - services may then come at a premium. In contrast, discounts may be offered to companies that start ESOS well in advance. Despite the investment required, ESOS presents opportunities for significant financial gains, and the sooner companies start the process, the greater the potential energy and cost savings. There is every reason to embrace ESOS now, and not at the last minute.


Energise www.energiseconsulting.com


16 AUTUMN 2017 | INDUSTRIAL COMPLIANCE / INDUSTRIALCOMPLIANCE


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