ESOS: Compliance concerns grow as first deadline day passes

With the first ESOS deadline passing on Saturday (5 December) and latest official figures showing just 20% compliance rates, industry experts have raised more questions about the potential effectiveness of the legislation.

Saturday, 5 December marks the official deadline for ESOS compliance, although companies who have not yet complied will be granted an extension to the 29 January, as long as they inform the Environment Agency (EA) of their plans.

According to the most recent figures available (released 27 November), 1,682 organisations out of 10,000 had confirmed their compliance, with another 543 organisations saying they intend to comply by 29 January.

The EA said it would not be updating its ESOS compliance figures this week because they are “changing significantly day-by-day”, but official figures will be released on Monday.

Awareness raising

The ESOS legislation affects firms with more than 250 employees or a turnover of more than €50m and a balance sheet exceeding €43m.

Companies that fail to complete their audits – which must be carried out by qualified assessors – face the potential of a basic fine of £50,000, plus £800 a day capped at a maximum of 80 days. The current compliance rates have therefore prompted concern among energy industry experts.

Wayne Mitchell, director of markets and innovation for npower Business Solutions, said: “Our independent research revealed earlier this year that 49% of British manufacturers weren’t even aware of ESOS.

“With the 5 December now upon us, many businesses are likely to find themselves in a race-against-the-clock to meet the extended deadline of 29th January.

“With just 250 recognised Lead Assessors in the UK and Christmas right around the corner, I wouldn’t be surprised if we see the EA handing out a raft of penalties early next year.

“Non-compliant businesses must act now and appoint a Lead Assessor if they’re going to avoid the hefty fine. However, the onus is also on the Government and industry to ensure that energy efficiency becomes second nature for British businesses in 2016, driven by opportunities for real cost savings rather than mere box ticking.”

Box ticking?

Concerns also remain about the general effectiveness of the scheme once the audits have been carried out. 

edie’s own survey of energy managers, published in April, found that just 30% of ESOS-affected businesses believe it would help them identify savings or format plans. A mere 12% said it would complement existing plans, while 9% said it would not inform plans at all.

Another recent survey by consultancy firm Utilitywise revealed that just one in five businesses said they will implement the recommended energy savings measures regardless, and 31% will only make changes to their energy usage if they can be guaranteed to see significant savings.

Nearly of half (49%) of businesses expected the cost of compliance to outweigh potential savings.

edie will be conducting a full interview with the Environment Agency on Monday after the latest ESOS compliance results have been tabulated.

Brad Allen

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