Will your business be affected by the Energy Savings Opportunity Scheme (ESOS) regulations?
Find out what’s required to comply, and how to take advantage of the opportunity in the scheme.
What is ESOS?
ESOS is new piece of EU legislation which requires member states to introduce a mandatory programme of energy audits for ‘large enterprises’. This means over 7000 of Britain’s biggest companies will be required to comply – with the initial audits to be undertaken by 5th December 2015.
As a minimum, large organisations (those with more than 250 employees or a turnover in excess of €50M) will be required to review total energy use from their business operations, including building energy use, transport energy use and industrial processes. You are required to calculate the amount of energy used per employee, and identify potential measures that could save energy.
The Energy Savings Opportunity Scheme (ESOS) requires all large businesses in the UK to undertake mandatory assessments looking at energy use and energy efficiency opportunities at least once every four years. The ESOS Regulations 2014 bring into force Article 8 of the EU Energy Efficiency Directive.
What is ISO50001?
ISO50001 is the international standard for energy management. As you carry out the ISO50001 certification you will be performing many the same processes as you would do for ESOS. If you have ISO50001 in place before the December 2015 deadline, you will be exempted from ESOS although you will still have to notify DEC that this is the case.
The key differences between ESOS and ISO50001 are:
- ISO50001 is an internationally recognised standard and your company will gain additional prestige by having this accreditation.
- ISO50001 may be required when dealing with larger customers who have mandated that all of their supply chain have ISO50001 or equivalent.
- ESOS consultants can help you prepare and conduct your ESOS audit and then sign it off. With ISO50001 the consultant and the auditor signing off the application must be different people.
- ISO50001 is more bureaucratic and has more process related documentation aspects, although the actual audit and improvement recommendation processes are much the same.
- Because of the additional admin, the ISO50001 takes longer to put in place, typically 18 - 30 months for a reasonable size company, whereas ESOS can be gained in 12 months going at a relatively modest pace.
Our energy management system (ENISCOPE) caters equally well for ISO50001 or ESOS and we have a fully compliant ISO50001 documentation set available to download to get you started should you wish to go down that route.
Who is affected?
ESOS regulations apply to any large undertaking that carries out a trade or a business, and any corporate group where at least one member of the UK group meets the ESOS definition of a large undertaking.
Your organisation is considered a large undertaking if you, your parent group or any member of your group can answer "yes" to any of these questions:
- Does it employ over 250 people?, or
- Does it have an annual turnover in excess of €50 million?, or
- Does it have a balance sheet in excess of €43 million?
It is estimated that the regulations will apply to approximately 10,000 businesses.
This definition will also include some organisations that do not recognise themselves as traditional businesses, such as not-for-profit bodies outside the public sector, so long as they are large enough to meet the qualifying criteria.
The deadline for the first compliance period is 5 December 2015. This means that before this date businesses that meet the qualification criteria will have to achieve compliance with the regulations and notify the scheme administrators, the Environment Agency. It is a mandatory energy assessment and ‘energy saving identification’ scheme for large organisations, meaning non-SMEs will have to carry out regular audits of their energy usage. The Public Sector is excluded from the requirements, although some Universities may find themselves involved depending upon funding.
How to comply
To comply with ESOS regulations most businesses will need to undertake an ESOS Assessment, including the following elements:
- Measure your total energy consumption for buildings, industrial processes and transport;
- Identify areas of significant energy consumption, accounting for at least 90% of your total energy consumption;
- Appoint a ‘Lead Energy Assessor’ to oversee the ESOS Assessment;
- Identify cost-effective energy efficiency recommendations for areas of significant energy consumption;
- Report compliance to the Environment Agency, after having had the ESOS Assessment reviewed by a Board-level Director and approved by a Lead Energy Assessor.
ESOS (Energy Savings Opportunity Scheme) presents a new and significant opportunity for large UK businesses. In fact, UK Government predicts that ESOS could help deliver savings of nearly £2bn.
ESOS may be viewed as yet another level of time-intensive and costly environ-compliance on top of the existing Carbon Reduction Commitment, Mandatory Carbon Reporting and Climate Change Levy.
However, if you act now, your business will be able to maximise payback and benefits of this mandatory compliance scheme.
Act now to achieve competitive advantage:
- ESOS is here: We’re already in Phase1.
- Its mandatory: If ESOS applies to you, you’ve got to comply.
- Investment is minimal: Typical audits cost just fractions of energy spend.
- Act quickly: Start the process NOW and see in-year benefit.
- Maximum ROI: Implement the recommended improvements and recover the initial outlay
Who carries out the Assessments?
Guidance is stating that audits must be undertaken by 'lead auditors' that belong to an accredited organisation registered with the Environment Agency, a similar structure to the approval of Energy Assessors with Accreditation schemes. It is expected that schemes from the likes of CIBSE, BRE, ESTA, EI, etc. would be applying for inclusion on the Environment Agency list.
If your business is already in some form of auditing scheme (such as the EU Emissions Trading Scheme or the CRC Energy Efficiency Scheme), the monitoring and auditing procedures associated with these will be accepted for compliance with ESOS. However it is unlikely that any of these schemes will cover the full range of activities covered by this latest scheme (such as transport energy for example). So it is likely that some additional auditing, as well as collating of data streams, will be necessary.
Where an organisation has implemented a certified Energy Management System to ISO50001 the energy accounted for in the EMS would be exempt from ESOS requirements, likewise with the use of Display Energy Certificates.
The Carbon Trust: Will your business be affected by the Energy Savings Opportunity Scheme (ESOS) regulations? Find out what’s required to comply, and how to take advantage of the opportunity in the scheme.
Where Smart Energy Solutions N.I. can help?
For a complementary consultation or demonstration please contact us on (028 2858 3637)