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Consultation Release: Strengthening the Energy Savings Opportunity Scheme (ESOS)

26th July 2021

Susanna Jackson

On 6th July 2021 the UK government published a consultation on proposed changes to strengthen the current ESOS scheme as we move into phase 3.

You can view the full consultation details on the government website HERE.

The aims of the changes and improvements are:

  • To increase the number of ESOS participants taking action by improving audit quality
  • To increase carbon and cost savings by increasing the scope and number of recommendations taken up
  • To ensure recommendations are consistent with UK’s net zero commitments

The changes within the consultation are being considered for implementation for ESOS phase 3 (compliance deadline of December 2023). However, some of the proposed changes may take longer to implement, therefore are considered for a later implementation in phase 4 of the scheme (compliance deadline of December 2027). The consultation closes on 28th September 2021.

The consultation is set out into four chapters which form the central consultation proposal for introduction in phase 3, with two additional chapters which suggest options for changes in a later phase of the scheme. The chapters and summary of proposals are outlined below:

Chapter 1: Setting stronger standards for ESOS

  • Set firmer and stronger minimum standards for content and quality of ESOS reports
  • Reduce the de minimis of total energy consumption to 5%
  • Introduce minimum threshold for number of sites sampled and percentage of energy consumption sampled
  • Analysis of half hourly data included in reports as standard where available
  • Require audits follow existing standards such as ISO 50002 or EN 16247
  • Provide comparison between ESOS phases based on an energy intensity metric
  • Introduce similar scoring system to energy management matrix in reports
  • Remove Display Energy Certificates and Green Deal Assessments as routes to compliance

Chapter 2: Further changes to improve ESOS report quality

  • Review process through which ESOS lead assessors are certified by professional bodies – potential to remove assessors from professional bodies register if multiple failures
  • Require lead assessor registers to provide information on level of specialist experience of lead assessors and participants to justify their choice of assessor
  • Reputational incentive to be an early compiler e.g. badges of good practice
  • Change qualification date to allow longer between qualification and compliance date, or stagger phases for different industry sectors
  • Provide a recommendations template for higher quality and more consistent presentation
  • Provide better guidance on implementing and financing recommendations
  • Require reports shared with all subsidiaries in company group

Chapter 3: ESOS and Net Zero

  • Include overall assessment of carbon emissions and other GHGs resulting from energy use which organisation will need to address to be net zero by 2050
  • Include net zero benchmarks and trajectories to see how current energy intensity compares
  • Should consider business impact of electricity use on carbon emissions and identify potential for investment in renewable electricity
  • Develop a methodology to give businesses option to go further with disclosures

Chapter 4: Reporting and Disclosure

  • Require public disclosure of high level ESOS information on central website
  • Require additional data to be reported via the EA’s central portal when making the notification
  • Require setting a target or action plan and reporting against progress annually
  • Change ESOS thresholds to match SECR thresholds

Chapter 5: Widening participation in ESOS

  • 3 options to extend ESOS scheme to include Medium Enterprises (ME’s)
  • Extend to all ME’s
  • Extend to ME’s with high energy consumption, using an energy consumption threshold
  • Extend to all industrial ME’s
  • This would relate to a later phase of the scheme once improvements in the first four chapters have been made to the scheme

Chapter 6: Stimulating action based on ESOS reports

  • This would also be introduced in a later phase of the scheme
  • Mandate action to carry out all ESOS recommendations with estimated 3-year payback or carry out alternative actions with same level of savings
  • Require participants make ongoing improvements in energy performance via energy intensity metric measurement
  • Require participants to take particular actions to improve energy management processes/data

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FREE WEBINAR: Energy Savings Opportunity Scheme (ESOS) Consultation - Overview & Phase 3 Explained

On the 6 July 2021, subsequent to the start of ESOS phase 3, the government released a consultation seeking views on proposed measures to strengthen the Energy Savings Opportunity Scheme, aimed to improve the uptake of energy efficiency measures, and increase the benefits for participating businesses. The outcome of this consultation is expected to see an extension of the scope of the scheme, to include medium sized businesses and ensure recommendations are consistent with UK’s net zero commitments.

During this webinar, we will be providing a summary of the consultation and an overview of the government's proposals, including how the consultation is likely to affect obligated businesses. We will also outline the key dates and thresholds for ESOS phase 3 and how Comply Direct can support your business in ensuring compliance with the regulation.

Register your FREE place here 

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If you would like to speak with a member of our team about ESOS or would like any further information, please do not hesitate to get in touch with our energy experts.