The Government has recently issued its response
to last year's consultation on the Energy Savings Opportunity Scheme (ESOS),
together with regulations
to enact the scheme and guidance
for participants. ESOS is being
introduced as a result of Article 8(4) of the EU Energy Efficiency Directive which
requires all non-SMEs to conduct energy audits by 5 December 2015 and every four
years thereafter. The official estimate,
based on affected businesses reducing their energy consumption by a modest 0.7%,
is that the net benefit to the UK over 16 years will be £1.6 billion.
Who is affected
ESOS applies to the private sector only. Your business will have to comply if it is an
undertaking carrying out business activity in the UK and at least one of the
following applies:
- It has fewer than 250 staff but has an annual turnover exceeding €50m and a balance sheet exceeding €43m; or
- It is part of a corporate group which includes an undertaking that meets either of the above criteria.
The timetable
ESOS runs in four year phases - any business/group that
meets the above criteria on the qualification date for each phase has to
participate in that phase. The
qualification date for Phase 1 is 31 December this year and participants have
until fulfil their obligations by 5 December 2015. All private sector organisations should
therefore consider their size and group structure as at the end of this year
and then, if they fall within the scope of ESOS, take steps to comply with the
new requirements by the deadline.
ESOS obligations
There are four main obligations. In each phase ESOS participants must:
- · Measure all their energy use for a continuous twelve month period;
- · Conduct audits covering all their main areas of energy consumption;
- · Report the fact that they have complied with the above by the compliance date; and
- · Maintain an ESOS evidence pack providing a full record of their compliance.
So far as it is reasonably practicable, an energy audit report
must provide recommendations for any cost-effective energy efficiency measures
that can be undertaken, and quantify the estimated costs
and benefits. There is no compulsion on the business to
implement the recommendations but a director or equivalent has to confirm that
they have been considered.
ESOS audits have to be (at the least) reviewed by a lead
assessor whose name appears on an approved register indicating that he/she is
suitably qualified and experienced. An
in-house lead assessor can be used, if available. The BSI has just published a Publicly
Available Specification on the competence of lead energy assessors.
There are alternative routes to compliance which will be
relevant, in some circumstances, for businesses that operate certified energy
management systems, or have had Green Deal assessments carried out, or Display
Energy Certificates issued. Also,
ESOS-compliant audits that have been conducted since 6 December 2011 will
count towards the Phase 1 requirements, so it may not be necessary to audit all
of a business's main areas of energy consumption between now and December 2015.
Similarities with CRC
Many of the rules of ESOS bear some similarity with the CRC
Energy Efficiency Scheme, which also runs in phases with a qualification date
for each phase, but there are important differences. This is particularly the case in the detailed
rules concerning joint ventures, trusts, foreign-owned companies and group
disaggregation. Two important
differences that will affect many ESOS participants are that transport energy
usage has to be included, but landlords will be pleased to hear that they are not
responsible under ESOS for metered supplies to their tenants.
What this means
The Government expects that 9,400 large enterprises will
have to comply with ESOS. Many of these
will already be carrying out regular energy audits across the key areas of
their business, recognising that improving energy efficiency makes financial
sense even in sectors that are not energy-intensive. For these companies, the burden of compliance
should not be too great. The remainder
have until early December next year to do what is necessary. A good first step is to determine the
boundary of the ESOS participant organisation by examining its corporate
structure and then gather energy data for a 12 month period, remembering that
the rules are different from those applying to the CRC scheme. A tool such as Sustainability Sure is invaluable for such a task, and it will
facilitate sharing the data with the ESOS assessor when the time comes
too.
Find out more about Sustainability Sure by
contacting
+44 (0)844 245 9958 or email sustainabilitysure@landmark.co.uk.
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