What is the Energy Savings Opportunity Scheme and the ESOS audit requirements?

The Energy Savings Opportunity Scheme (ESOS), set up by the Department of Energy and Climate Change (DECC), mandates large organisations to conduct audits of their energy use.

Qualifying organisations are required to measure the energy consumed in their buildings, transport and industrial processes, carry out energy audits and report their compliance.

Compliance can be achieved by either implementing an ISO 50001 energy management system covering all energy use or by appointing a Lead Assessor to carry out audits and/or review a variety of compliance routes.

How do you comply with the ESOS scheme?

To comply with ESOS, you must:

1. Measure the energy you consume in buildings, transport and industrial processes
2. Audit areas of significant energy consumption through one of the methods in the table below:

Benefits

• Lighting: Double-digit % annual savings are possible.
• Building Energy Management Systems: Take control of energy costs.
• Consumption Reporting: Measure, manage and reduce your costs by understanding what you’re using, when, where and what it’s costing.
• Power Factor Correction and Voltage Optimisation: Eliminate the costs on the bill that you don’t have to be paying.
• Strategy: Join practice to process in order to implement a rolling programme of efficiency and cost reduction.
• Heat Recovery: Formulate a recovery strategy to recover and re use this valuable commodity.

Signing off

Once a Director within your organisation, and the Lead Assessor, has signed off your ESOS assessment, you will need to provide notification to the Environmental Agency that you have complied with the terms of ESOS on or before the compliance date.

Penalties

Civil penalties can be enforced for organisations that qualify for ESOS but are found not to comply. Failure to notify the Scheme Administrator that your organisation has complied could result in:

•  A fixed penalty of up to £5,000
• £500 charge for each subsequent day after the compliance (80 day max.)

Failure to maintain adequate records of compliance results in similar penalties, whilst an outright failure to undertake ESOS could result in:

• A £50,000 penalty
• £500 fine for every subsequent day that the organisation remains non-compliant

Publication of non-compliance details

The Provision of misleading or false statements within the ESOS assessment could result in a monetary fine in excess of £50,000.

Consumed and ‘Unconsumed’ Supplies

Energy supplied to and consumed by a participant across all of their assets and activities, either from an energy supplier or from energy generated by the participant, will be included within the scope of ESOS. Unconsumed supplies are defined as supplies that you do not consume, but provide to a third party.

In order for these supplies to be deducted from your total consumption you will, again, be required to provide verifiable data. If you are unable to reasonably measure the energy consumption supplied to third parties, you will be required to include this consumption within your own total consumption.

Potential sources of energy consumption are shown in the below chart;

A final monitoring metric must be agreed on - ideally, all of your energy consumption should be converted into energy units i.e. kWh

Can businesses be exempt from carrying out an ESOS assessment?

If you qualify for ESOS and your organisation is fully covered by ISO 50001, you do not need to carry out an ESOS assessment.  You just need to notify the Environment Agency that you’re compliant with ESOS.

If you are not fully covered, you will need to carry out an ESOS assessment to identify what your organisation needs to do to comply with the ESOS regulations.

If your organisation has a total energy consumption of less than 40,000 kWh you will be required to carry out an ESOS assessment. However, you will not be required to have a lead assessor review your ESOS assessment. If you decide not to appoint a lead assessor to review your ESOS assessment because you use less than 40,000 kWh, you must get two board level directors (or equivalent) to review your ESOS assessment and compliance notification.