ESOS – The Energy Savings Opportunity Scheme

Paul Taylor
The Energy Savings Opportunity Scheme (ESOS) has arrived with the potential to lower your overheads and improve the efficiency of your business, as long as it is implemented with that end in mind.

What is ESOS?

ESOS has been developed by the UK Government in response to Article 8 of the EU Energy Efficiency Directive which requires all large (non-SME) enterprises within the UK to introduce a programme of regular energy audits. The scheme has been developed by the Department of Energy and Climate Change (DECC) which laid regulations in Parliament on 26th June 2014 to give legal effect to the scheme, which came into force on 17th July 2014.

Who does the new scheme apply to and what do they need to do?

The Scheme requires all large (non SME) enterprises (not including Public Bodies) to:

  1. Measure total energy consumption across buildings, transport and industrial activities;

  2. Conduct ESOS compliant energy audits to identify cost effective energy efficiency measures, producing recommendations with estimated costs; and

  3. The above must be signed off by a board Director.

(Large enterprises are undertakings with more than 250 employees in the UK or annual turnover of €50 million and a balance sheet exceeding €43m in the UK)

Is it mandatory? Who will administer it?

ESOS is mandatory, and like the Carbon Reduction Commitment Energy Efficiency Scheme, it is to be administered by the Environment Agency.

ESOS is mandatory, and like the Carbon Reduction Commitment Energy Efficiency Scheme, it is to be administered by the Environment Agency.

What happens if you ignore it?

The Environment Agency – the scheme administrator, will publish a list of participants that have complied with ESOS. It will also impose fines and name organisations which have failed to comply; publishing details of the failures and the fines which have been imposed.

When does it come into force?

ESOS will operate in four-yearly compliance phases and organisations must assess whether or not they are required to participate in ESOS at the qualification date of each phase. The qualification date for phase 1 is 31st December 2014. Compliance phase 1 runs from 6th December 2011 – 5th December 2015. The last day of the compliance phase is the compliance date. This is the date by which the participant must have completed its ESOS Assessment and notified its compliance to the ESOS administrator.

What does a company have to do?

Participant organisations must ensure that at least 90% of their total energy consumption is subject to an ESOS compliant audit. Activity to support your ESOS Assessment must be undertaken during the compliance phase so qualifying audits must be completed during this period along with the measurement of total energy consumption across buildings, transport and industrial activities for your reference period. The reference period is a consecutive 12 month period over which organisations should determine their total energy consumption. The reference period must overlap with the qualification date.

Qualifying audits: ESOS qualifying energy audits must be carried out or overseen/approved by registered lead assessors. This is to ensure that the audits meet the minimum standards defined by ESOS. The lead assessor must also review your ESOS Assessment as a whole, though it is your organisations’ legal responsibility to ensure that all your areas of significant energy consumption (representing at least 90% of total energy consumption) are audited.

What is covered in an assessment?

ESOS audits must cover all your areas of significant energy consumption:

  • Agreed audit methodology, scope and timetable;

  • Agreeing a sampling approach, where assets are very similar, for auditing and or site visits; and

  • Clear information on potential savings, identifying and quantifying cost effective energy savings opportunities – and where practicable, based on life cycle cost analyses rather than simple payback.

Does my organisation have to implement the opportunities that have been identified?

No. The implementation of recommendations is not mandatory, but to do the minimum to comply is missing the point, and does not provide value to participating organisations in any way. 

  • Invest in good quality ESOS energy audits that clearly identify and present valuable investment opportunities using life cycle cost analyses (LCCAs);

  • Implement these opportunities: organisations will lower their overhead costs, and increase staff productivity and retention through more efficient and comfortable working environments.

An organisation can also voluntarily make information about progress available to the Environment Agency to publish – making a clear demonstration of your organisation's commitment.

Why are Faithful+Gould the right consultant to support you?

We have followed the development of this scheme from the outset, taking part in the consultation and in events and meetings with DECC to help improve the outcome. Our clear understanding of ESOS is supported by our in depth knowledge of other schemes such as the Carbon Reduction Commitment Energy Efficiency Scheme, and our long history in producing high quality energy audits and energy management strategies for major clients.

Faithful+Gould will:

  • Help you understand whether you are 'in scope' for ESOS;

  • Assess the impact of ESOS on your organisation;

  • Design a compliance strategy;

  • Support you in the process of implementing ESOS compliance activities;

  • Support with life cycle cost analyses (LCCAs)

  • Work with you to prepare the evidence pack and sign off with a lead assessor;

  • Support the submission of your formal notification of compliance to the ESOS administrator – the Environment Agency; and

  • Most importantly, help you to actually benefit from ESOS through support in the implementation of the findings of your energy audit reports, building these into a strategically focussed cost and energy reduction programme; acting as project or programme manager / programme integrator.