Government established the Energy Savings Opportunity Scheme (ESOS) to implement Article 8 (4-6) of the EU Energy Efficiency Directive (2012/27/EU).
The ESOS Regulations 2014 give effect to the scheme.
ESOS is an energy assessment scheme that is mandatory for organisations in the UK that meet the qualification criteria. The Environment Agency is the UK scheme administrator.
Organisations that qualify for ESOS must carry out ESOS assessments every 4 years. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures.
Organisations must then notify the Environment Agency by a set deadline that they have complied with their ESOS obligations.
Below is a summary of who is affected by the scheme and how to comply. For further details, see the full ESOS guidance.
By 5 December 2015 qualifying organisations must carry out their ESOS assessment and notify the Environment Agency.
Participants must then carry out an ESOS assessment in each 4-year compliance period, ending on 5 December 2019, 2023 and so on.
By the end of 2014, the Environment Agency will provide information about the online notification system and when this will be available.
Organisations do not need to pre-register or inform the Environment Agency that they qualify. The first date qualifying organisations must contact the Environment Agency by is 5 December 2015, when they make their notification confirming compliance.
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.
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.
A large undertaking is an organisation that carries out a trade or business which:
To assess if you qualify, you need to take your employee numbers, turnover and balance sheet totals from the accounts:
A person is ‘employed’ by an undertaking if they are:
An ‘employee’ is a person employed under contracts of service. Their contracted hours and status (full time/part time) are irrelevant to their classification as an employee.
The number of employees means the average number of persons employed by the undertaking in the year.
To work out your average number of employees, you need to:
If you qualify for ESOS and your organisation is fully covered by ISO 50001 you don’t need to carry out an ESOS assessment. You just need to notify the Environment Agency that this is the case and you are compliant with ESOS.
If you qualify for ESOS, but your organisation is not fully covered by ISO 50001 you will need to carry out an ESOS assessment. The assessment will help you work out what your organisation needs to do to comply with the ESOS regulations.
The assessment will take into account energy partly covered by ISO 50001, Display Energy Certificates (DECs) or Green Deal assessments (GDAs).
For your assessment, you will need to:
This is the energy used by assets held or activities carried out by your organisation or group. This includes the energy consumed by buildings, industrial processes and transport. For details on how to calculate your total energy consumption, read the fullESOS guidance.
This means the energy used by assets held, or activities carried out, by your organisation that account for at least 90% of your total energy consumption. You then need to:
find out whether ISO 50001, DECs or GDAs cover any of your areas of significant energy consumption
identify whether ESOS compliant energy audits have been, or need to be, carried out for the areas of significant energy consumption not covered by ISO 50001, DECs or GDAs
As long as 90% of your total energy consumption is covered, you can use a mix of approaches with some of your energy consumption covered by ISO 50001 - some by DECS or GDAs and some by ESOS energy audits.
You need to appoint a lead assessor to carry out, oversee or review your energy audits and overall ESOS assessment.
Lead assessors can be employees or external contractors as long as they are members of an approved professional body register.
If you want to become a lead assessor then you have to be (or become) a member of an approved professional body register. Individuals can’t apply directly to the Environment Agency to be approved.
Professional bodies can submit registers of their members for approval to act as ESOS lead assessors. The Environment Agency is implementing an application and approval process. Contact details for approved registers will be published on this webpage (we expect the first bodies to be approved late summer 2014).
You need to notify the Environment Agency that you have undertaken an ESOS assessment and are compliant with your obligations under the scheme.
You must do this by the compliance date of 5 December 2015, and if applicable, every 4 years afterwards.
Keep records of how you have complied with ESOS in an evidence pack. There is no set format for this.
An ESOS compliant energy audit needs to meet these criteria:
The data must:
This must be done using energy consumption profiling. Energy consumption profiling involves breaking down the different ways in which energy is used by a participant’s activities and assets and analysing any variations in that energy use to identify inefficiencies.
Energy saving opportunities should be reasonably practicable and cost effective to implement. Recommendations should include the estimated costs and benefits of implementation.
You should assess cost effectiveness by comparing the reduction in units of energy or energy spend with the cost of implementing the measure.
Calculating the cost of implementing a measure should be based on an analysis of whether the investment will be economical over its entire life. This would include taking into account the cost of purchase, installation, maintenance and depreciation.
There is no regulatory requirement for participants to implement the energy saving opportunities identified.
Organisations are expected to carry out site visits as part of the ESOS audits, but there is no requirement to visit every site.
Organisations with multiple sites or assets that are identical or very similar, can take a proportionate approach and apply the energy saving opportunities identified to their wider portfolio.
The lead assessor and participant organisation must agree a suitable auditing approach to reflect the energy consumption patterns of their assets and activities.
Where less than 12 months’ data has been used for your audit(s), justification for this must be provided in your ESOS notification and recorded in your ESOS evidence pack.
Where your audit(s) are not based on energy consumption profiles, you must document the following in your evidence pack:
This information must also be referenced in your notification.
In all instances you need to keep evidence of how you’ve complied with your ESOS obligations in the ESOS evidence pack. This can be in any format that you choose.
Your environmental regulator is responsible for compliance and enforcement activities. Your registered office or principal place of activity (in the absence of a registered office) determines your regulator:
The regulator may issue civil sanctions including financial penalties if an organisation does not meet the scheme’s obligations, for instance by failing to do the required audits or notify compliance.
Professional bodies will be able to hold a register of suitably qualified energy professionals approved to act as lead assessors for ESOS. The Environment Agency has developed an application process for approvals.
Under the ESOS Regulations 2014 a ‘professional body’ means:
The Environment Agency welcomes applications from organisations that meet either of these definitions. You must be able to demonstrate that your professional membership register consists of members that meet the competence requirements established by PAS 51215:2014.
The primary requirement is that the Environment Agency is confident:
The first step in the application process is to submit your Expression of Interest (EOI) form.
If you want to apply for approval of more than one register, you need to submit a separate form for each one.
Further details on the ESOS scheme, your obligations and how to comply with them are set out in the ESOS guidance.
If you need more information email email@example.com as the UK scheme administrator, regardless of whether your business is in England, Scotland, Wales or Northern Ireland. For all offshore related queries email firstname.lastname@example.org.
The Environment Agency aims to respond within 10 working days. Send your queries well in advance of each compliance deadline to ensure you get a response and have time to fulfill your obligations prior to submitting your notification of compliance.