With less than six months to go until the 5th December deadline, now is the time for qualifying organisations to prepare for ESOS, the Energy Savings Opportunity Scheme. Mick Grist, divisional managing director at Bureau Veritas, global leaders in testing, inspection and certification, looks at the scheme in more detail – and what it means for your organisation.
The Energy Savings Opportunity Scheme (ESOS) is a mandatory scheme which requires all companies with more than 250 employees or a turnover of more than €50m to produce detailed reports on their energy use and efficiency every four years. Organisations will be required to review total energy use across the business, from building energy and industrial processes, to transport and utilities.
Administrated by the Environment Agency, it was established by the Government in 2014 to implement Article 8 (4-6) of the EU Energy Efficiency Directive (2012/27/EU), which orders all member states to set up an energy audit scheme of this kind for “enterprises that are not SMEs”. The scheme requires qualifying companies to calculate the amount of energy used per employee, and identify potential measures that could save energy. Implementation of such measures could help to deliver net savings of £1.9bn for British businesses between 2015 and 2030, according to the Carbon Trust.
Who qualifies?
ESOS applies only to the largest organisations in the UK, but more than 9,000 companies are expected to qualify.
The schemes applies to any company which is classified as a ‘large undertaking’; with more than 250 employees or a turnover in excess of €50m and a balance sheet over €43m. To quality, the business must meet these criteria on 31st December 2014.
Public sector organisations or those already certified to the ISO 50001 Energy Management System do not need to complete an audit. However, if a company is part of a corporate group with another UK-based company which does meet the ESOS guidelines, then it must complete the necessary reporting.
What is required?
By 5th December 2015 qualifying organisations must either conduct an ESOS assessment, be certified ISO 50001 or display a DEC – Display Energy Certificate. The reporting cycle then repeats every four years, with a new deadline in 2019, 2023 and so on.
The Government has produced a detailed guide to ESOS, covering which organisations qualify, what they need to do to comply and how they should notify the Environment Agency that they are compliant. Crucially, it also includes the penalties for non-compliance – which could result in a fixed penalty of up to £5,000.
However, understanding the scheme is just one part of the ESOS journey. Research from one leading sustainability information resource shows that 82% of firms affected by ESOS are aware of the scheme, but only 39% have started to process of appointing a lead assessor to carry out their ESOS assessment at time of writing. Organisations must undertake a rigorous and time-consuming audit process, which is why enlisting the support of a third-party, independent compliance partner like Bureau Veritas is the preferred option for many.
Your compliance partner will be able to offer a range of services including ESOS gap analysis, ESOS audit and DEC (Display Energy Certificate) compliance. Once ESOS compliant, it makes business sense to look towards ISO 50001:2001 Energy Management Systems. Working closely with your independent partner to achieve (and maintain) ISO50001 certification will ensure you no longer need to meet the requirements of ESOS by next deadline in 2019.
The important thing is not to leave it until the last minute. By getting ahead of the game, organisations can be safe in the knowledge that they are compliant – but can also start to plan cost-saving energy reduction measures too.
What are the benefits?
ESOS is a mandatory scheme but it should not be seen as an inconvenience, particularly with the potential savings on offer.
A comprehensive ESOS audit will deliver cost-effective opportunities to reduce energy consumption for any organisation, which can save money in the long term through reduced energy bills. More than this, it would enable companies to truly demonstrate their commitment to energy saving and the environment to stakeholders.
In fact, potential savings identified from an ESOS assessment can be as high as 13.5 times the cost of the audit, according to the Department of Energy and Climate Change. The question for many companies is ‘can you afford not to take energy management seriously?’
