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ESOS compliance: How to get a head start in phase two

Posted by Michael Dent on 14 May, 2018

In an article written for and first published by FM World, Michael Dent, Managing Director of Inprova Energy, explains how facilities managers can lead compliance with the Energy Saving Opportunity Scheme (ESOS).

What is ESOS?

ESOS, the mandatory UK energy assessment scheme, applies to large, mainly private sector organisations, with more than 250 employees or a turnover of more than €50 million and a balance sheet in excess of €43m.

ESOS Phase Two covers a four-year period from 6 December 2015 to 5 December 2019. It is likely that any business that participated in the first phase of ESOS will need to participate again, assuming that they still meet the qualification criteria. However, they cannot use the same data. 

Eligible organisations must record and collect 100% of their business-wide energy data for a minimum 12 month continuous period, which must be used to identify areas of significant energy consumption to be assessed for energy saving opportunities.

How can FMs ensure compliance?

The most popular route to ESOS compliance is implementing surveys across a representative sample of business activities and buildings, but other methods include commissioning Display Energy Certificates (DECs) with accompanying advisory reports for the energy efficiency assessment of buildings, or Green Deal Assessments. ESOS Lead Assessors may also consider qualifying audit work as part of other schemes, such as activity under the Carbon Trust Standard and Logistics and Green Fleet Reviews.

Organisations can achieve compliance by gaining accreditation under the international ISO 50001 Energy Management Standard if it covers an organisation's entire energy consumption data, across all activities. In instances where it doesn't cover 100% of energy usage, it can contribute to ESOS compliance.

The Compliance process

  1. Appoint an accredited ESOS lead assessor, who must be used to verify the overall compliance process.
  2. Measure and record total UK energy consumption. This must include all buildings, industrial processes and transport activities, and cover a continuous 12-month period, including the qualification date of 31 December 2018.
  3. Identify areas of significant energy consumption that account for at least 90% of total energy consumption and carry out assessment activities/audits for the compliance phase of 2015 to 2019, identifying cost effective energy saving opportunities.
  4. Collate and review evidence and complete evidence pack, which must be stored. Submit ESOS notification of compliance to the Environment Agency by 5 December 2019.

What are the risks of non-compliance?

There are large financial and reputation risks for those who fail to comply with ESOS, which is rigorously enforced. In its latest report, the Environment Agency has confirmed that it has investigated 2,400 organisations in England and issued hundreds of enforcement notices.

Why is starting now essential?

Although the final compliance deadline for submission of ESOS assessments is 5 December 2019, businesses should start data collection as soon as possible because it takes time to collate this complex information from the original sources, such as meter readings, delivery notes, mileage logs or supplier invoices.

By acting promptly, businesses will have a chance to rectify inevitable data gaps or inaccuracies and to verify everything. This will avoid delays in the final ESOS assessment and ensure timely submission to the regulator.

During ESOS Phase One, last minute bottlenecks were caused by the limited availability of accredited Lead Assessors, so it is wise to secure expert assistance as soon as possible. For those selecting the ISO 50001 route, timing is critical as it can take 12 to 18 months to introduce a high performing energy management system and achieve certification.

The sooner businesses complete the process, the sooner they have an opportunity to achieve cost savings by implementing the recommended energy efficiency improvements. This could result in cutting rising energy bills by as much as a fifth –  amounting to tens and hundreds of thousands of pounds worth of potential cost savings for larger sites.