Our ESOS Phase 2 blog aims to bring you the latest developments and essential information released by The Environment Agency, relevant for all ESOS obligated companies
ESOS round up...it's 2018 already! Prepare for Phase 2 now
Posted: 12 January 2018
FREE WEBINAR Friday 26 January at 10am - The qualification deadline date (31 December 2018) for Phase 2 of the Energy Savings Opportunities Scheme (ESOS) is less than a year away.
This webinar (Friday 26 Jan at 10am) aims to provide all the information you need to prepare for Phase 2, the benefits of ESOS and how Comply Direct can help.
The ESOS scheme requires obligated companies to undertake an energy assessment every four years. Therefore, whether you will be obligated for the first time in Phase 2 or if you are following on from Phase 1, this webinar will provide everything you need to know and why you need to start preparing early.
ESOS: Influence and impact to date
Posted: 8 January 2018
We are highlighting the key points from a recent ESOS evaluation report by The Department of Business, Energy and Industrial Strategy, focusing on the impact the scheme has had so far.
Firstly, it was reported that ESOS has already caused increased interest in organisational energy efficiency, including from those at board-level. This was an impressive 40% increase by compliant companies, including those who planned to be compliant. Since the start of 2015, one-third of investigated compliant companies had implemented or updated an action plan or strategy to achieve energy efficiency goals.
In terms of transport efficiency, this is another area that ESOS has had an early impact upon. Organisations who currently own or lease vehicles have already either introduced or have reported that they are planning fuel efficiency improvements during this period. It was reported that since 2015, the scheme influenced approximately 8% of compliant companies to introduce at least one of these fuel efficiency improvements.
Office-based organisations who are close to the scheme’s employee threshold, and those who are eligible due to high turnover, were reported to be the least likely to be showing any early impact from ESOS.
Choice of compliance route
Interestingly, the perception of ESOS was mainly that it was firstly a compliance activity, instead of as an energy saving opportunity. Therefore, this resulted in significant effects in terms of chosen routes to compliance. This included an inclination to commission external assessor services, instead of authorising an internal assessor for example. 83% of compliant organisations chose to commission external energy auditing services, according to analysis of the Environment Agency’s published notification data (from January 2017).
Uptake of energy efficiency measures
To summarise, since the beginning of ESOS compliance activity, it was reported that 79% of compliant organisations, including those who intended to comply, implemented energy efficiency improvements in the 18 months prior to mid-2016, and 33% of these organisations said that ESOS had considerably influenced their decision to introduce one of these improvements at the very minimum. Overall, this equates to 26% of compliant organisations having taken some action influenced by ESOS by mid-2016. This is shown in Figure 1 below.
Source: ESOS Evaluation survey, 2016, Base: 821 complied or intend to comply organisations
The Environment Agency are pursuing organisations for ESOS non-compliance
Posted: 14 December 2017
The December edition of the Environment Agency's Energy Savings Opportunity Scheme (ESOS) newsletter, focused on how they are actively tackling non-compliance and how organisations can avoid being caught out.
Firstly, the EA have carried out a considerable amount of work to tackle non-compliance and have already investigated 2,400 organisations. Out of this number, 240 organisations have chosen to participate and start the process to become compliant following receipt of an Enforcement notice. In addition, the Environment Agency also have another 190 Enforcement Notice cases in progress.
Some non-compliant organisations are already going through the civil penalty process, and the penalties imposed by the EA against these companies will be publicly available to see on .Gov.UK following completion of the process.
These figures will of course change as the EA's Enforcement work advances. However, this very much proves that many organisations are being negatively affected as a result of non-compliance, therefore, it isn't something you should ignore. It also highlights the importance of registering for Phase 1 and 2 as soon as possible, if you are obligated, to minimise any potential penalties and ensure your organisation is compliant moving forward.
Find out if your organisation is obligated under ESOS here
If you have received an enforcement notice, contact us to learn more about our free confidential compliance identification service. We can help you identify if you need to comply with Phase 1, and help you take steps to ensure compliance where required. If you are obligated and yet to comply, the more proactive you are the better.
To help ensure your organisation doesn't get caught out and won't miss the Phase 2 Compliance deadline (5 December 2019), the Environment Agency has given the following advice:
- Start your energy audits and identification of energy savings opportunities now
- If you expect to qualify for Phase 2 and know that an energy supply will be included in your significant energy consumption (SEC), carry out the audit work on this supply. However, you won't be able to carry out the assessment of your total energy consumption (TEC) as this has to include the qualification date of 31 December 2018
- The audit needs to have at least one year’s energy measurement, but this can be at any time between 6 December 2014 and 5 December 2019
- The audit can use data that has been collected at any time during this period provided that the audit itself is carried out no later than 24ths months after the data period and the data has not already been used for an audit in Phase 1
- Different energy streams can be audited at different times so the workload can be spread out better to suit your business needs
For more information please refer to Sections 2.1 and 5.4.1 of the government's main guidance document. Click here to access this (Complying with the Energy Savings Opportunity Scheme).
The qualification deadline for ESOS Phase 2 is 31 December 2018 (if you are over the threshold by this date then your organisation will be obligated).
Environment Agency tells ESOS obligated companies: Prepare for Phase 2
Posted: 22 June 2017
A newsletter published by the Environment Agency (June 2017) and addressed to all ESOS obligated companies has stressed the need for companies to prepare for Phase II of the Energy Saving Opportunities Scheme.
The scheme requires obligated companies* to undertake an energy assessment every four years. Phase I saw over 6,800 organisations submitting notification of compliance. Following this first phase, the Environment Agency (EA) has conducted in excess of 200 audits of compliance, with a further 180 scheduled for this financial year. The chart below highlights the outcome of the audits, with the vast majority of organisations being considered compliant with remedial actions.
The EA has also served over 300 enforcement notices, and has begun Civil Penalty proceedings against a number of organisations who are non-compliant. Although the qualification threshold for Phase 2 is 31 December 2018, if you know you are likely to exceed the thresholds, you can begin audits on your significant energy consumption now. The EA is encouraging ESOS obligated companies to start early to avoid the scramble which led to an extension of the deadline for compliance for phase 1.
So, why start early?
- There’s a limited number of quality lead assessors, as every organisation must appoint a lead assessor demand is likely to increase closer to the deadline.
- The earlier you identify potential savings, the earlier you can act to save money.
Comply Direct has helped companies in a range of sectors achieve compliance with ESOS, and successfully supported companies through the audit process. If you aren’t sure whether you should have complied with Phase I, or are likely to exceed the thresholds* for phase II. Then give our expert team a call to discuss the best route to achieving compliance.
Beyond compliance, ESOS can offer cost savings to companies. Vivid Imaginations used Comply Direct for their ESOS phase I compliance and achieved much more than just compliance:
“Comply Direct made compliance with ESOS hassle-free and straightforward, providing us with a report with real opportunities, outlining potential energy reductions and significant cost savings. The report was thorough, easy to navigate and easy to understand. Since our ESOS assessment, Vivid Imaginations have implemented improvements and successfully expanded the number of hybrid vehicles in our company car fleet, one of the recommendations of the report. It has been excellent that we have been able to turn a legislative requirement into real energy and cost savings. We would recommend Comply Direct for any companies needing to become compliant with the ESOS regulations.”
*Obligated companies: Companies which employ 250 or more people, and/or have an annual turnover in excess of €50 million (£38,937,777 phase 1*), and an annual balance sheet total in excess of €43 million (£33,486,489 phase 1*), and/or an overseas company with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK). Qualification threshold dates – phase 1 (31 December 2014), phase 2 (31 December 2018).
*Exchange rate from Euros to Sterling will be confirmed on the qualification date for a given phase (for phase 2: 31 Dec 2018). The figures quoted in sterling are estimates based on the exchange rate for phase 1 and are subject to change for phase 2.
NB: “Balance sheet total” means the aggregate of the amounts shown as assets in the company’s balance sheet (that is before deducting both current and long-term liabilities). Therefore, it is the gross figure not the net figure.