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Monday, 14 October

ESOS 2 December Deadline - What To Do & When To Do It

Amaad Ahmed Energy Efficiency Manager at Encope

The Energy Saving Opportunity Scheme is likely to carry on after Brexit and may have to be included in a company's annual reports - Amaad Ahmed explains.

The Energy Saving Opportunity Scheme (ESOS) is a quadrennial energy assessment scheme and is the UK’s implementation of Article 8 (4 to 6) of the EU Energy Efficiency Directive (2012/27/EU). This directive sets out obligations for its members to help Europe achieve its target of 20% energy reduction by 2020.

Following Brexit, it is envisaged that ESOS will be maintained within the UK. The Department for Business, Energy & Industrial Strategy has undertaken a consultation on 'Streamlined Energy & Carbon Reporting' in which no change is proposed to ESOS. Although, there is the potential to use ESOS outputs in the new streamlined reporting approach.

This means that ESOS outputs (opportunities) may have to be included in a company's annual reports, which shareholders can request and are filed with and made available by Companies House.

An organisation will need to undertake an ESOS assessment in Phase 2 if it meets the following criteria on the qualification date of 31st December 2018:

  • Classed as a large undertaking.

  • Has greater than 250 employees.

  • Has a turnover greater than £50m and a balance sheet greater than £43m

ESOS is currently in its second phase (compliance period 2). The deadline for compliance for phase 2 is the 5 December 2019.

My recommended path to ensure compliance is depicted below:

Image

The 1st of January 2018 marks the start of the data reference period for Phase 2. This is the earliest date from which 12 consecutive months of energy consumption data can be collated to ensure that the qualification date of 31/12/2018 is captured. This data equates to an organisation’s total energy consumption for the respective compliance period. The total energy consumption includes all input energy use, e.g. buildings, industrial processes and transport.

If not covered by an alternative route to compliance (ISO 50001, DECs or Green Deal Assessment), ESOS compliant energy audits must be carried out to cover areas of significant energy use. It is recommended that the energy audits are undertaken as early as possible and during the reference period, as this would allow any savings identified to be realised sooner and ensure the availability of an ESOS lead Assessor.

Feedback from Phase 1 has suggested that the unavailability of Lead Assessors leading up to the deadline had driven up the cost of compliance.

 

Compliance notification
Once the qualification date has passed, an evidence pack can be collated which includes all the required audits and total energy consumption. The Environment Agency can then be notified of compliance well ahead of the December 2019 deadline. 

 

Benefits
ESOS should not be seen as a bureaucratic compliance exercise and if implemented correctly, in addition to compliance the following benefits can be achieved:

  • Provides a good starting point for organisations who haven’t previously explored energy saving opportunities.

  • Encourages good data collection and monitoring, as ESOS requires 12 months of data to be collected for all energy supplies across the reference period.

It is recommended for Phase 2 that the opportunities identified within ESOS assessments form part of a working document which enables the subsequent tracking of the implementation these opportunities.

 

Opportunities
If the assessment is undertaken correctly then the opportunities identified should fall within an organisations financial criterion (i.e. be commercially viable), be reasonable and applicable to the organisation. The implementation of the opportunities can be undertaken in a staged manner, with the no-cost and low-cost opportunities being undertaken first. Successful implementation of these with demonstrated energy savings can help to secure more capital for larger projects. If implemented correctly this can form the basis of a continuous energy performance improvement system or 'ISO 50001 lite' which can then be evolved to fully certified ISO 50001 energy management system ahead of Phase 3 (2023). The implementation of which will also ensure compliance with ESOS.

Amaad Ahmed is an Energy Efficiency Manager at Encope encope.co.uk

 

Article written by Amaad Ahmed

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