The low down on ESOS


If your customers are of a considerable size, they’ll probably have to comply with the Government’s new Energy Savings Opportunity Scheme (ESOS). This was set up in order to put into practice parts of the EU Energy Efficiency Directive, and it’s administered by the Environment Agency. In effect, ESOS puts the EU Directive into national law.

If your customer meets the ESOS’s qualification criteria, we’re here to help. Likewise, if you want to know whether your customer is subject to ESOS get in touch to find out what we can do.

In the meantime, we’ve created this basic guide to help you get up to speed: what you should know, and what would be advisable to do.

Please note that this guide only gives you a general overview on ESOS. The information given is not comprehensive and isn’t legal or professional advice. For further information and details on ESOS please check the government site.

What is it?

ESOS is a mandatory energy assessment scheme for qualifying organisations in the UK. It requires any sizeable business to have an ESOS assessment every four years.  These assessments are audits of the energy used by your buildings, your industrial processes and your transport. They help identify cost-effective energy saving measures for your business.

Why is it happening?

The Department of Energy and Climate Change (DECC) created ESOS to help the UK fulfil its EU obligations under the Energy Efficiency Directive. It ‘s expected that the scheme could lead to £1.6 billion of benefits to the UK, with the businesses themselves seeing most of the benefits as a result of their own energy-saving efforts. As well as the potential increases to your profitability through reduced energy costs and improved efficiency, the UK as a whole could see real improvements to its energy security and its impact on the environment.

 Who will be affected?

Customers qualify if they meet the ESOS definition of a large undertaking on 31 December 2014, the so-called qualification date for ESOS. The following types of organisation could also come under the scheme if they meet the criteria:

• Non-profit organisations

• Non-public sector undertakings

• Corporate groups

An organisation qualifies as a large undertaking if it carries out a trade or business which either has:

• 250 employees or more;

• or has less than 250 employees but an annual turnover in excess of €50 million (approximately £41.5 million) and has an annual balance sheet in excess of €43 million (approximately £35 million).

To find out if your employee numbers, your annual turnover and balance sheet qualify you for ESOS, simply check your accounts for the financial year ending on the qualification date of 31 December 2014 or in the 12 months immediately after the qualification date of 31 December 2014. If you meet these qualification criteria, it’s most likely that you’ll be under the scope of the new legislation. And as compliance is mandatory, it’s worth getting to grips with what’s involved as soon as possible.

What will customers have to do?

At a basic level, ESOS requires businesses to do the following five things if they qualify

1. Calculate total energy consumption, including your buildings, your transport and industrial processes.

2. Identify energy efficiency and energy management opportunities by carrying out an audit to identify areas of significant energy consumption.

Significant consumption means energy used by assets held or activities carried out by your business that adds up to at least 90% of your total energy usage. You then need to check whether ISO 50001, DECs (‘Display Energy Certificates’) or GDAs (‘Green Deal Assessments’) cover any of your areas of significant energy consumption.

And check whether ESOS-compliant energy audits have been or need to be carried out for the relevant areas of significant energy consumption. The purpose of an ESOS-compliant assessment is to highlight ways to increase your energy efficiency and try to reduce your energy consumption.

3. Appoint a lead assessor to carry out, oversee or review your ESOS audits and assessments and evaluate opportunities. A lead assessor can be an employee or a contractor, but they have to be members of an approved professional body register (BSI PAS51215).

4. Store the date and submit notification of your ESOS compliance to the Environment Agency. While you’re required to report the findings of your audits to the relevant authorities, putting your energy-saving recommendations into action is voluntary. Of course, if you want to see the financial and environmental benefits of your business making energy savings, you’ll want to act on the results of your assessments. Make sure you keep records of how you complied with ESOS in an evidence pack – a specific format has not been set, so you’ll need to decide what format is right for your business.

5. Carry out further annual disclosures

 When does it all start?

ESOS came into force earlier this year and customers have probably already found out whether their business qualifies for ESOS on the qualification date of 31 December 2014. However, they have until 5 December 2015, to carry out the mandatory audits and report your compliance to the Environment Agency.

To some business owners, it all might just seem like another set of rules to follow and paperwork to process. But, as the name suggests, ESOS is intended to provide an ‘opportunity’ to make real improvements to your profitability, your competitiveness – and the energy future of the UK as a whole.


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