The Energy Saving Opportunity Scheme (ESOS)
What is the Energy Saving Opportunity Scheme?
The Energy Saving Opportunity Scheme (ESOS) is UK legislation (based on article 8 of the EU Energy Directive) which mandates nearly 10,000 organisations in the UK to audit their estates to establish opportunities for savings in energy.
If your business employs more than 250 employees, OR has a turnover and balance sheet exceeding €50 million and €43 million respectively, then you should have undertaken an ESOS audit by the 5th December 2015. If organisations are yet to comply with ESOS legislation they are at risk of receiving a hefty fine of £50,000 from enforcers.
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An ESOS audit involves an assessment of the energy used by a company’s buildings, industrialprocesses and transport to identify cost-effective energy saving measures. It also looks to see if an organisation is establishing ways to measure and manage energy and plan and identify opportunities for energy saving.
The government’s aim of the scheme is to cut carbon emissions and reduce energy consumption by requiring large businesses to identify energy reduction measures. If audits led to an average 0.7% energy saving per enterprise then the potential net benefit of this policy for the UK is estimated at 1.9bn Net present Value between 2015 and 2030 through the implementation of energy efficient measures.
Who must comply?
The scheme will apply to organisations operating in the UK that have:
- 250 or more employees or;
- Fewer than 250 employees, but an annual turnover and balance sheet exceeding €50m and €43m, respectively.
Under the terms of the scheme, eligible organisations are referred to as ‘undertakings’. In addition, within a corporate group, it only takes one organisation to qualify for ESOS for the entire group to fall within the scheme, regardless of their size.
Why Comply with ESOS?
Penalties & Enforcements:
Under ESOS, compliance bodies in England, Northern Ireland, Scotland & Wales will have the authority to apply civil penalties to non-compliance participants.
For failure to undertake an ESOS Assessment there will be a discretionary penalty allowing the compliance body to require the participant to take a number of steps toward compliance and a fixed monetary penalty. Failure to comply with any aspect of an ESOS Assessment (not using sufficient data, not using a Lead Assessor etc.) would be considered failure to comply. Where non-compliance is explained under “comply or explain‟ provisions then the compliance body will consider whether the justification given is reasonable before determining whether to impose a penalty. The penalty is:
- A requirement to conduct an ESOS Assessment by a date specified by the compliance body; and/or
- A penalty of up to £50,000; and/or an additional £500 per day penalty for each day starting on the day after the compliance date that the organisation remains non-compliant, subject to a maximum of 80 days; and/or
- Publication of details of non-compliance
By complying with ESOS, it will allow businesses to start saving energy, by implementing the energy efficiency measures, also reducing costs.
- Energy audits are a valuable tool in understanding and improving the energy performance of an organisation. Undertaking energy audits allows them to:
- Measure and understand the energy consumption of an organisations assets and activities. Building an energy consumption profile showing where and how the organisation consumes energy. This data can also be used to identify any variations in energy use, both between areas and over time;
- Identify patterns, build explanations for these and identify any opportunities to reduce the overall energy use through increased levels of efficiency.
- Use 12 months of energy consumption data, from within a specific period;
- Begin no earlier than 12 months before the commence ment of the compliance period (than 6 December 2010);
- Begin no earlier than 24 months before the commencement of the first ESOS Energy Audit that the participant undertakes in the compliance period (e.g. for an eSOS Energy Audit undertaken on say 1 April 2015, data must begin no ealier than 1 April 2013);
- Use data not used to support ESOS compliance in a previous compliance period;
- Produce cost-effective recommendations for the area being audited or confirm that there is no scope for cost-effective energy efficiency improvement;
- Be overseen, conducted or reviewed by an ESOS Lead Assessor.
ESOS Participants Must:
- Make an initial estimate of their total energy consumption (covering energy used in buildings, transport and industrial processes);
- Identify areas of significant energy consumption (which equate to at least 90% of their total consumption), and carry out a more detailed audit of those areas to establish where energy savings could be mades, and
- Submit a formal notification to the scheme administrator, the Environment Agency (EA)
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