Energy Savings Opportunity Scheme (ESOS) – Stewart is an ESOS Lead Assessor

ESOS applies to many thousands of UK companies / organisations – the basic criteria are >250 employees and/or turnover >£43M/year.  If that describes your business – you are eligible.

Phase 1 ran from Dec 2014 – May 2016 over-running the original (5th December 2015) deadline by several months due to extensions granted by the Environment Agency to late-comers. 

Their generosity has now run out and they have levied fines against many non-compliant organisations – maybe you are one of the “free riders” – please get in touch if you need help.

There is much hype about Phase 2 of ESOS – with “panic-mongering” writ wide.  In my opinion there is no requirement to panic unless you are one of the non-compliant bodies or you know you are not ever going to be ready for Phase 2.

Are you ready for Phase 2 of ESOS?

I personally took 19 organisations through Phase 1 to full compliance – both in my capacity as an independent Lead Assessor and also on behalf of The Carbon Trust and Accenture as these firms did not have sufficient in house capacity.  None of my compliance submissions have failed audit or required any remedial action.

Phase 1 was “interesting” and completely hectic towards the end.  It wold be fine if Phase 2 were a wee bit more organised and composed – and let”s face it any organisation involved in Phase 1 should have systems in place to make Phase 2 a smooth run to compliance – which in turn means that I will have some spare capacity to take on new clients as well as dealing with my existing portfolio, most of whom have already committed to retaining my services for Phase 2.

However it is official – the compliance period for Phase 2 is underway – in so much as we are now less than a year from the end of the December 2018 which is the qualification date – but the deadline for compliance is not until 5th December 2019 – hence my word of caution – do not panic.

Although there some exemptions for public bodies, the regulations require all other large UK organisations to take three important steps before the compliance date of 5 December 2019:

  • measure their total energy consumption.
  • conduct audits to identify cost-effective energy efficiency opportunities.
  • report compliance to their national scheme administrator – EA in England, SEPA in Scotland, NIEA in Northern Ireland and NRW in Wales.

In other words nothing has changed reporting-wise from Phase 1 – we just need an up to date audit submitted in the same professional manner as Phase 1.

Organisations can achieve exemption again through certification to ISO 50001 but despite my having qualified as an ISO50001 Lead Auditor I am not finding much appetite for this approach because achieving certification just gets harder and harder – and more expensive.

Start collecting data for reporting your total energy consumption now if you haven’t already – ESOS compliance requires 12-months total energy consumption data including 31 December 2018.

If you want to complete the data-gathering and basic level audits in-house I can help raise staff awareness of energy matters through some informal training

Plan for early action to achieve compliance

December 2015 – May 2016 was horrible.  Sheer mayhem due to late submissions and free-riders being caught and made to comply.  Almost 3,000 organisations had to send notifications advising that they would be late achieving compliance – several of whom were ultimately fined.

Out of the several hundred compliance audits conducted for Phase 1 just 16 percent were deemed fully compliant and 75% of the audited participants needed to undertake remedial actions in order to become compliant. Around 5% of eligible organisations were found non-compliant which can lead to substantial financial penalties being imposed.  I am proud to state that all of my compliances were found to be 100% and no remedial actions were required whatsoever.

The EA also found that (in England) some 500 organisations that qualified for ESOS had not engaged with the scheme at all which has resulted in 300+ enforcement notifications with more due.

Civil penalty proceedings have now been commenced against a number of non-compliant organisations.

Meeting the requirements of ESOS – what do you need to prepare

The Environment Agency’s guidance document ‘Complying with the Energy Savings Opportunity Scheme’ states what is needed in your ESOS Evidence Pack.  Should you care to investigate further and need a cure for insomnia follow this link to the official Gov’t blurb.

Many of the items will be in the assessment report that I prepare for compliance. 

Below I have set out what could be in or out of the report and also cross-references back to the ESOS Regulations 2014 – helpful for internal audit pruposes.

  • Contact details of the participating undertakings and the responsible undertaking
  • Details of any board level directors or equivalents who have reviewed the ESOS assessment findings
  • Written confirmation from the director(s) to evidence that they reviewed the ESOS assessment – Regulation 31(b)
  • Contact details of the Lead Assessor and the name of their approved register 
  • Written confirmation from the Lead Assessor to evidence that they signed off the ESOS assessment – Regulation 28(1)(d)
  • The calculation for your total energy consumption – Regulation 28(1)(a)(i)
  • A list of your identified areas of significant energy consumption – Regulation 28(1)(a)(ii)
  • Details of the energy audits undertaken including the audit methodology used – Regulation 28(1)(a)(iii)
  • Details of the energy saving opportunities identified – Regulation 28(1)(a)(iii)
  • Details of the routes to compliance used to cover each area of significant energy consumption and where applicable evidence (e.g. certificates) of the alternative routes to compliance – Regulation 28(1)(b)
  • Written agreements to support any dis-aggregation or aggregation of group members – Regulation 28(1)(c); and Schedule 2 paras 2, 4, 6, 7 & 11
  • Written agreements to support any alternative responsible undertaking chosen (other than the default highest UK parent) – Regulation 28(1)(c)
  • Reasons for using less than 12 months of data for the measurement of total energy consumption – if applicable – Regulation 23(7)(b)(ii)
  • Reasons for using less than 12 months of data to support an ESOS energy audit – if applicable – Regulation 26(8)(b)
  • Reasons for being unable to use verifiable data on energy use or energy expenditure to support your calculation of total energy use – if applicable – Regulation 23(7)(b)(ii)
  • Methodology used for any estimates made for energy use or energy expenditure – Regulation 23(7)(b)(ii)
  • Justification, where applicable, where you have not used an energy consumption profile in your audit of an area of significant energy use – Regulations 27(2), 27(3), 27(6)
  • Where applicable, explanation and justification of the sampling approach used for audits of multiple similar assets.
  • Post-submission a copy of the compliance acknowledgment email

All of the fore-going points – I believe – to the WHY? in the question “Why should I speak to Stewart King about my ESOS compliance?”  

ESOS Phase 2 approaching

If your organisation is eligible and you want sensible no-nonsense advice please do not hesitate to contact me.