The Energy Savings Opportunity Scheme (ESOS)is a mandatory energy assessment scheme for organisations in the United Kingdom that are regarded as a ‘large undertaking’.
The scheme was established by the Department of Energy and Climate Change (DECC) in response to the requirement for all Member States of the European Union to implement Article 8 of the Energy Efficiency Directive.
What’s involved in ESOS?
In simple terms, an ESOS assessment requires participants to do three things:
1. Measure their total energy consumption
Qualifying businesses are required to calculate their total energy consumption, including all the energy used in buildings, industrial processes and transport.
2. Conduct energy audits to identify cost-effective energy efficiency recommendations
After the total energy consumption is calculated, businesses must identify assets and activities that amount to at least 90% of the total energy consumption, and include recommendations for cost-effective energy efficiency improvements.
A lead assessor will need to be appointed to check that the assessment meets ESOS requirements. The lead assessor must be a member of an approved ESOS lead assessor register.
The assessment must then be signed off by senior management
3. Report compliance to the scheme administrator
The first compliance phase ends in 2015, where organisations are then required to notify the Scheme Administrator (Environment Agency) by 5 December 2015 that they have complied with their ESOS obligations. The next phase of compliance then begins with reporting completed by 5 December 2019.
Who does ESOS apply to?
ESOS applies to large UK undertakings and their corporate groups. It mainly affects businesses, but can also apply to not-for-profit bodies and any other non-public sector undertakings that are large enough to meet the qualification criteria.
A large undertaking is an organisation that carries out a trade or business which either:
- employs at least 250 people;
- employs less than 250 people but has an annual turnover in excess of 50 million euros (£38,937,777), and an annual balance sheet total in excess of 43 million euros (£33,486,489);
- is overseas company with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK).
If you have an ISO50001 Energy Management System (certified by an approved certification body) covering all your energy use this is sufficient to constitute an ESOS assessment. However, you will still need to notify the Scheme Administrator of your compliance.
Does my business qualify?
Your organisation qualifies if, on 31 December 2014, it meets the ESOS definition of a large undertaking.
Corporate groups qualify if at least one UK group member meets the ESOS definition of a large undertaking.
Organisations that qualify for ESOS must carry out ESOS assessments every four years. These assessmentsare audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.
What are the penalties for non-compliance?
As the regulator for businesses registered in Scotland, we have the power to issue civil sanctions, including financial penalties, if an organisation does not meet the scheme’s obligations.
If you have any questions or require any further information or advice on any aspect of ESOS, please contact us.