Act now to avoid big ESOS 3 fines and cut costs

The Energy Savings Opportunity Scheme (ESOS) requires large UK organisations to carry out comprehensive energy audits and report back to the Environment Agency.

The scheme has been designed to increase industry’s awareness of energy consumption to make it easier for businesses to take action to lower their energy bills and reduce the rate of carbon emissions across the UK.

The government has recently toughened sanctions for non-compliance and the qualification date for phase 3 (ESOS 3) of the scheme is getting close (31 December 2022) so it’s crucial that businesses are preparing now.

Who is eligible?

ESOS applies to large organisations including not-for-profit bodies and other non-public-sector organisations for which one or more of the following criteria apply:

• Employ 250 or more people
• Has an annual turnover in excess of €50M ( £38,937,777) and a balance sheet total in excess of €43M (£33,486,489)
• It is part of a group of UK organisations which includes at least one eligible organisation.

Big financial penalties

The government has confirmed an increase in the penalty for non-compliance. Failure to undertake an energy audit will result in an initial penalty of up to £50k and an additional £500 per day until the company complies with legislation. For entrants in their first year, this initial penalty will be £5k.

Enforcement notices were issued with the intent to “bring people into compliance” but this has been removed and replaced with:

“Undertaking an energy audit is a key requirement of ESOS. This breach impacts on the integrity of the ESOS, and we will therefore normally issue a penalty for failure to undertake an energy audit.”

Key reasons to audit for ESOS now:

• Ensure compliance
• Quality Lead Assessors in short supply
• Avoid big fines
• Gain competitive advantage with energy savings
• Cut overheads.

What you need to do

• Carry out ESOS energy audits for the utility supplies that will be included in the Significant Energy Consumption.
• The audits need to have at least one year’s energy measurement.
• The audit can use data that has been collected at any time qualifying period provided that the audit itself is carried out no later than 24 months after the data period and the data has not already been used for an audit previous phases.
• Different energy streams can be audited at different times so the workload can be spread better to suit business needs.

How we can help

We can help companies to complete an ESOS assessment, as part of our Savings Opportunities Report Tool (SORT). The audit will involve looking at how the business uses energy, including how energy is consumed in buildings, transport and industrial operations based on an analysis of energy data and site survey.

With this completed, organisations can then notify the Environment Agency by the deadline that they have complied with their ESOS obligations.

The government advises that participants could save 13.5 times the cost of any assessment by following the energy-saving recommendations in the assessment. We are a Carbon Trust Accredited Supplier and have successfully completed hundreds of energy and water saving projects across the country, saving our customers millions of pounds.

The Department for Business, Energy and Industrial Strategy (BEIS) consulted on proposals to strengthen and improve ESOS .The government intends to implement some of the changes in advance of the current Phase 3 compliance deadline, and others, such as adding a net zero audit element, in Phase 4.

Stay ahead of ESOS changes – call our expert team to arrange an audit or for more advice on 0333 123 5464.