ESOS Phase 2 dates are nearing. Here’s what you need to know.
What are the ESOS Phase 2 dates?
- ESOS Phase 2 Date 1: 31 December 2018 – Qualifying
- ESOS Phase 2 Date 2: 5 December 2019 – Reporting
- ESOS Phase 2 Date 3: Any 12-month period containing the 31st December 2018 is the data collection period.
31 December 2018 is the ‘deciding’ date about whether or not your organisation qualifies for ESOS reporting.
All ESOS reporting must be completed, signed off and filed with the Environment Agency by 5 December 2019.
What is ESOS?
ESOS stands for the Energy Savings Opportunity Scheme. It was established by the UK government to implement Article 8 (4 to 6) of the EU Energy Efficiency Directive (2012/27/EU).
It is mandatory for organisations in the UK that meet certain criteria to undergo an ESOS energy assessment, administered by the Environment Agency. These organisations must carry out an ESOS assessment every four years to identify cost-effective energy saving measures.
The scheme was introduced to large companies with the requirement for them to reduce their carbon emissions and save on their energy. These companies would undertake an energy audit that would then be overseen by an approved ESOS Lead assessor every four years.
What’s included in an ESOS audit?
- the energy used
- industrial processes
Which organisations are affected by ESOS?
Organisations that meet the ESOS definition of a large undertaking:
- Employ 250 or more people
- Annual turnover in excess of 50 million euro
- Annual balance sheet total in excess of 43 million euro
- Overseas companies with a UK-registered establishment with 250 or more UK employees (paying income tax in the UK)
Over 10,000 companies in the UK will need to comply.
If your business does have to comply, we can arrange a team of Energy Auditors to come and assess your business and provide guidance in the way forward. You can read more on ESOS compliance.
What was ESOS Phase 1?
Phase 1 of ESOS. It applied to companies that were assessed before 31 December 2014 as ‘large companies’; having more than 250 employees and/or a turnover exceeding 50M Euros in their last published accounts.
The process required businesses to:
- Calculate total energy consumption
- Identify areas of significant energy consumption
- Appoint a lead assessor (internal or external) who is registered with an approved organisation
- Identify energy-saving opportunities
- Notify the Environment Agency
- Keep records
ESOS 1 required energy audit submissions by December 2015. Less than two-thirds of companies actually complied with the requirement at the time.
What is ESOS Phase 2?
ESOS 2 also applies to large businesses. It is the second submission in an ongoing 4-year cycle. Many businesses will have already conducted an energy audit and produced a plan to make energy efficiency savings.
The procedure now needs to be repeated for ESOS 2, and it will all need to be documented and signed-off in accordance with the regulations. If your company does not have the resources or expertise to do this then BAS Energy can provide an effective energy efficiency resource and guide you through this process.
Although we are leaving the EU, ESOS has been adapted into the UK Energy regulations. Therefore, UK businesses will still need to comply with ESOS Phase 2, whose completion deadline is 5 December 2019. Businesses will be assessed as at 31 December 2018 to determine whether they qualify.
What happens if ESOS Phase 2 dates are not met?
If your qualifying organisation fails to meet ESOS Phase 2 dates, you may face punitive action:
- A fine of up to £50,000
- and/or a fine of £500 per day of non-compliance (for a maximum of 80 days).
The Environment Agency has taken punitive action against 15 companies so far, including companies like Gumtree and eBay, with fines ranging from £1,560 to £45,00.
Top tips to meet ESOS Phase 2 dates
- Don’t wait until the last minute
- Process the ESOS data monthly
The benefits of ESOS reporting
Although ESOS reporting does add some additional energy administration, it can also unearth valuable opportunities for energy efficiency.
Executing the energy efficiency program uses scarce resources but will provide lasting benefits:
- Reduced energy costs
- Improved financial performance as a result
- Demonstrate corporate social responsibility
- Opportunities to do business with ‘eco-friendly’ companies
There is a framework for ESOS Phase 2 compliance. It is best to commit to an energy efficiency plan now to maximise the energy cost savings benefits, and also to limit the impact on resources.
An alternative approach is to achieve ISO15001 which gives you an ongoing corporate energy management system and also a clear recognition that your organization is striving to improve energy efficiency.
Using the services of an expert utilities team can help you with both the reporting and with recommendations for improving your organisation’s energy efficiency.
Expert ESOS management
At Smarter Business, we offer a range of solutions aimed at guiding businesses through ESOS compliance and beyond. We help businesses drive efficiencies, reduce consumption and realise cost savings from their ESOS obligations.