ESOS Phase 2

ESOS Phase 2 – What you need to know

The government’s Energy Savings Opportunity Scheme (ESOS) has now moved into its second phase, which requires compliance by 5 December 2019.

Plenty of time, then…

Perhaps not.  If the business world has learned anything from ESOS phase one, it’s that they shouldn’t leave it until late in the day to ensure compliance.

There was a UK-wide scramble for guidance and assessment for the deadline, pushing prices higher and resulting in missed deadlines.

Does ESOS phase two apply to me?

All large UK companies must comply by the deadline.  This is defined as:

  • Employing 250 or more people
  • An annual turnover in excess of 50 million euro and an annual balance sheet total in excess of 43 million euro

What is required for compliance?

Compliance for the above mentioned companies is pretty simple, but it can’t be done without the involvement of a suitably qualified and accredited energy management expert. If this capability is not available within the company, an accredited ESOS Lead Assessor must be appointed to assist with and oversee the gathering of appropriate information to give businesses an overall picture of their energy usage and how it can be improved.

To be compliant, a business must:

  • Measure their total energy usage for buildings and transport
  • Conduct a comprehensive energy audit to identify key energy users and cost-effective energy efficiency opportunities
  • Report compliance to the Environment Agency (England), NRW (Wales), NIEA (Northern Ireland) or SEPA (Scotland)

It’s hoped that the efficiencies discovered and recommended during the audits, together with the findings of the usage report, will be considerable enough to spur firms into energy-saving action.

Clearly, ESOS’ purpose is to lead businesses to water, but it’s up to them to drink it.

There are three other ways of achieving automatic compliance, which encompass the above points:

  • Possess, and provide evidence of, an up-to-date and valid Display Energy Certificate (DEC) for all buildings
  • Possess, and provide evidence of, the ISO 50001 Energy Management Systems standard
  • Previously completed energy reports can be used in compliance reporting, providing they are to an appropriate standard and still valid

What if a business is found non-compliant?

While compliance seems very achievable, the tailbacks caused at the end of phase one resulted in around 3,000 businesses admitting non-compliance.  The most frequent reason being unavailability of practitioners to complete their work before the deadline.

This position can lead to businesses being fined a combined total of £60,000 with an additional combined £1,000 for each further day non-compliant up to 80 days.  A false statement to the agencies can incur a further fine of up to £50,000.

So, in short, ESOS non-compliance is not an option.

What’s the big deal?

The benefits are quite clear of the scheme – it will give a business a complete picture of its assets’ cost to the business and environment.  It will also be a good indicator of where it could save energy and money, with The Carbon Trust claiming it identified an average of £360,000 per annum of possible efficiency savings for the 200 plus businesses it guided through compliance.  Pretty worthwhile, then, despite being a bit of a pain to carry out!

If you want help or guidance with regards to ESOS, simply get in touch.  We can advise on the most cost-effective route and help you achieve compliance in the most suitable timescale from start to finish. We are able to project manage any of the recommendations you decide to employ, all with our trademark customer-centric service.

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Paul JohnsonGroup Financial Director

Paul Johnson is very much a home-grown talent.

He joined Great Annual Savings Group in its infancy, fresh from a youth career as a professional footballer with Hartlepool United.  He quickly established a reputation within the business and aced all required accountancy qualifications in the space of four years to become the Group’s Management Accountant.

Several successful projects later, Paul was promoted to Head of Finance.  When the former FD left GAS, he took on the mantle of the business’ most senior finance professional; boasting a string of incredible achievements all under the age of 30.

Quote:

“I have witnessed phenomenal growth at the Group over the many years I’ve worked here and I’m looking forward to guiding the Group into an exciting new chapter.”

Interesting fact:

Paul made his professional debut for Hartlepool United against Bournemouth in the Football League.  Some say Danny Ings still resides in his pocket to this day.