ESOS, (Energy Savings Opportunities Scheme)

Paul Downing

The Energy Saving Opportunity Scheme (ESOS) was launched for consultation by the DECC in  July 2013, which proposed that all businesses with more than 250 employees were obliged to commission an approved’ assessor to carry out an audit of energy use, including transport, every four years. The consultation closed on 3 October 2013 and we are currently waiting for feedback from DECC.

Over the next few years, the government looks set to introduce ESOS. The Scheme is a compulsory programme of regular energy audits for ‘large enterprises’  i.e. PLC’s that are to be undertaken by 5 December 2015. Following the audit, companies will then have to review their position on energy consumption and implement improvement programmes to reduce wherever possible. The requirement originates from the EU Energy Efficiency Directive that came into force on 14 November 2012. 

Implementation of the Directive

The government thinks that the United Kingdom has already made considerable advances in energy efficiency through a number of initiatives, such as the Green Deal. The government also recognises that ESOS will have many similarities with a number of existing UK policies, such as the Carbon Reduction Commitment (CRC), climate change agreements and mandatory greenhouse gas reporting.

The government is also proposing that enterprises be allowed to make full use of any data from other schemes as part of their ESOS assessments. Further interaction of ESOS with existing UK regulations/best practice include:

  • excluding from an ESOS assessment any energy use that is not paid for directly by the relevant company;
  • allowing buildings that have valid display energy certificates or that have undertaken Green Deal assessments within the past four years to be deemed to have satisfied ESOS requirements for that building;
  • allowing use of the data collected in a climate change agreement to assist in respect of ESOS obligations;
  • deeming a transport fleet to be compliant with ESOS transport requirements if it has been subject to a Green Fleet review within the past four years;
  • allowing enterprises that are certified to ISO50001 or ISO14001 (assuming this meets minimum standards of the directive) to be deemed ESOS compliant;
  • allowing audits in 2015, at the discretion of the ESOS administrator, to be based on other initiatives, such as the Carbon Trust Standard.
  • allowing flexibility around the period of time for which energy data is required.

Requirements of ESOS

The key requirement under ESOS can be found in Article 8 of the energy directive. Member states must introduce independent and cost-effective energy audits for all ‘large enterprises’, this will extend beyond companies and include partnerships and unincorporated associations, among others. The Public Sector is not required to participate.

According to DECC, the audits would cost in the region of £16,500 on average in the first instance and £11,000 for each subsequent audit, which will substantially improve the business case for a dedicated energy manager.

Although each audit will result in a set of energy saving recommendations the business is not obliged to implement them. DECC estimates that ESOS could save each business an average of £58,400 per year with just £16,500 of investment.

The scheme may overlap existing energy efficiency legislation, and place yet more pressure on squeezed businesses . Of the 7,300 businesses expected to fall into ESOS, up to 6,000 are set to be already in the CRC Carbon Reduction Scheme.

 

For more information on ISO 50001 or ESOS, please do not hesitate to contact us direct.

 

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