In the first of edie’s new ‘explained’ series, we’ve brought together everything you need to know in order for your business to make the most of the upcoming Scheme.

What is ESOS?

The Energy Savings Opportunity Scheme is a Government policy which calls for mandatory energy audits in the UK. It 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.

How does it affect your business?

Qualifying businesses must carry out an audit of 90% of total energy usage for a one-year period. The company must also identify efficiency opportunities; evaluate these through lifecycle costs, store the data and inform their regulator (such as the Environment Agency or Natural Resource Wales).

The Government says that the average cost to each business will be around £6,600 for the cost of an audit per four-year cycle, but a recent report estimates that businesses could save around £35,400 from their initial audit.

The Carbon Trust estimates that as many as 7,300 enterprises in the UK will be affected by ESOS. This covers more than 200,000 buildings and 10,000 industrial plants and accounts for 35% of total UK consumption.

Why does it exist?

ESOS is the Government’s response to the European Union’s Energy Efficiency Directive which came into effect in December 2012.

DECC and Carbon Trust estimate that, with a conservative 6% average energy saving, the UK could save 3TWh per year – enough to power 160,000 homes. This will contribute to meeting the EU’s 20% energy reduction target by 2020. Aside from a healthier bottom line, the policy will also help to preserve finite resources.

Are there any exemptions and what about smaller businesses?

Organisations subject to the Public Contracts Regulations (2006) are currently exempt, although some trusts, public bodies and not-for-profit organisations may be included. Overseas energy use is also excluded from ESOS but undertakings within the EU will have to comply with local regulations.

Small businesses not classified as ‘large undertakings’ are not currently affected by ESOS, however, as above, they might be if they are part of a larger corporate group.

How should the audit be carried out?

First, the business must appoint a lead assessor to carry out and review the energy audit and overall ESOS assessment. The audit must be conducted by a qualified assessor approved by a professional body. The assessment will take into account energy partly covered by ISO 50001, Display Energy Certificates or Green Deal assessments.

Lead assessors can be appointed in-house – provided they are suitable qualified. If outside help is required, the Energy Institute was recently certified to provide lead assessors. The full list can be found here.

If you are fully covered by ISO 50001 then you won’t need to carry out a full assessment, you just need to notify the Environment Agency that this is the case. You will still need to carry out an ESOS assessment if you are only partially covered.

Who are the approved lead assessors?

Association of Energy Engineers
Association of Energy Engineers
Elmhurst Energy Systems
Energy Institute (EI)
Institution of Chemical Engineers
Stroma Certification Ltd
The Chartered Institution of Building Services Engineers (CIBSE)
The Energy Managers Association
The Institute of Environmental Management and Assessment
The Institute of Environmental Management and Assessment

When is the deadline? 

In order to comply with ESOS, businesses must produce their first environmental audit report and notify the Environment Agency by 5 December, 2015.

Participants must then carry out an ESOS assessment in each subsequent four-year compliance period, ending on 5 December 2019, 2023 and so on.

Where can I find out more?

Edie’s National Energy Management Forum will also have a specific ESOS focus this year. Experts from a range of industries will share their journey towards ESOS compliance in 2015.

Find out more and register to attend the Forum here.

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