If your business has expanded, taken on more staff or your turnover has increased, you may now meet the criteria to participate in the Energy Saving Opportunities Scheme (ESOS).
This might sound like yet another time-consuming mandatory requirement. But it can also be good news, as ESOS can help your business to better understand your energy use, become more efficient – and also start mapping a path towards net zero (of which more below).
You are required to conduct an ESOS audit if your organisation:
- Employs 250 or more people, or
- Has an annual turnover in excess of £44 million, and an annual balance sheet total in excess of £38 million
If this was the case at the Phase 3 ‘qualification’ date of 31 December 2022, then you will need to conduct and submit an energy audit with 12-months of data by 5 June 2024.
Six-month extension to December deadline
This is an extension from the original deadline of 5 December 2023 because new submission requirements have been introduced by the new Department for Energy Security and Net Zero (DESNZ) and are still being finalised.
If your business has only started to meet the qualification criteria since 1 January 2023 – or does so in the period leading up to 31 December 2026 – then you will need to participate in ESOS Phase 4. This will require an audit to be conducted in 2026/27 and submitted around 5 December 2027.
Of course, if your business has downsized, it may be that you previously qualified and no longer do so. But if this is the case, you’ll still need to notify the Environment Agency.
Failure to comply or provide the necessary notifications can result in a £5000 fine, plus a daily penalty of up to £500 for each working day you continue to fail to comply.
Better supporting energy-saving action
ESOS has previously been criticised for being a box-ticking exercise. This is because there hasn’t been any obligation on participating organisations to act on the audit findings.
But new measures have been introduced for Phase 3 to put greater emphasis on actually applying the information ESOS identifies to make savings.
These include:
- Covering at least 95% of your total energy consumption. Previously it was 90%, which meant that organisations didn’t need to have such an inclusive or granular view of where and how they were using energy
- Including energy intensity ratios in reporting. For example, kWh/m2 for buildings, kWh/unit output for industry and kWh/miles travelled for transport. This helps to provide a more meaningful benchmark to measure future savings against
- Providing more information on next steps for implementing recommendations
- Setting a target or action plan after the audit has been submitted, and to then report against progress with the Phase 4 submission
Future net zero focus
Phase 4 plans to introduce yet more measures to make ESOS more applicable to working towards net zero targets. And to ensure the focus doesn’t wane in the four-year interim, some form of annual or bi-annual reporting may be introduced.
There are also plans for greater alignment with the annual Streamlined Energy and Carbon Reporting (SECR) obligation, which could make ESOS applicable to more organisations.
But DESNZ has yet to confirm much of this, so we will update you once we know for sure.
Automating data gathering
In the meantime, if you don’t already have an energy-management programme in place that automates gathering Half-Hourly consumption data from across your entire estate, then now is an ideal time to look into this.
Not only will this give you sight of how and where you use energy – so you are better equipped to spot wastage and make savings – but it will also save you time struggling to gather all the necessary information manually from past bills.
Contact your Client Lead or Account Manager for more information on how we, or our sister business E.ON Control Solutions (ECS), can help.
ECS can also support with conducting your ESOS audit and advising on how best to implement the findings to maximise energy savings. You can contact the team there by emailing national.sales@eon-controls.com
But even with the June extension, time is running out. So if you think you may qualify for ESOS Phase 3, act now.
