What is ESOS?

What is ESOS? We've put together a comprehensive FAQ - find it below.

1. What is ESOS?

The Energy Savings Opportunity Scheme (ESOS) is UK legislation (based on article 8 of the EU Energy Directive) that makes energy audits mandatory for large organisations. The aim is to reduce EU energy consumption by 20 per cent by 2020. Estimates indicate approximately £1.7bn of net benefits to the UK.

2. Who does it affect?

ESOS assessments apply to all ‘Large Enterprises' - organisations with over 250 employees OR a turnover exceeding £38,937,777 AND balance sheet assets greater than circa £33,486,489. Up to 10,000 UK businesses will be affected and tight deadlines are causing concern. There are additional considerations for incorporated groups and overseas parent companies etc.

3. Are there any organisations that ESOS doesn’t apply to?

Public bodies subject to the public contracts regulations 2006 are not affected.

4. How do I comply?

First an organisation needs to measure its complete energy usage, then understand the best method of compliance as Energy Savings Opportunity Scheme audits, ISO 50001 certification, Green Deal Assessments or Display Energy Certificates can all play a part in compliance. One of our first steps would be to identify which is the right option for you.

5. Why should I comply?

The ESOS assessment is a mandatory requirement for all affected businesses; if you don’t comply the Environment Agency (EA) can enforce financial penalties of up to £90,000. Many organisations are seeing ESOS as a catalyst to kick start energy efficiency across their operations as it will identify opportunities for real saving. Alternatively by at least implementing some opportunities the cost of compliance can be covered. It is likely that many organisations will not have budgeted for ESOS.

6. How soon do I need to act?

Straight away! Entrants must undertake audits and provide your notification of compliance (or equivalent) covering 90% or more of their organisational energy by 5 December 2015 and then ongoing for each four yearly phase.

7. What’s the rush?

ESOS affects nearly 10,000 UK businesses and there’s a limited number of qualified professionals to carry out audits and assist with compliance. Acting now means you avoid the risk of overpaying for audits later in the year if other companies hike their prices closer to the compliance deadline. If you set your reference period sooner you will have more time to complete compliance.

8. What happens if I don’t comply?

The EA have the authority to apply civil penalties against those mandated companies not participating in ESOS, or found to be non-compliant with its requirements. Failure to comply with ESOS will result in fines of up to £50,000 and possible charges of an additional £500 per day for up to 80 days, totalling £90,000. Non-complying companies will also be named and shamed. As a result it’s far cheaper to comply.

9. What types of energy are covered by ESOS audits?

Energy used in buildings, transport and industrial processes.

10. How long is the audit valid?

There is no validity to an audit, but compliance must be achieved in each four year phase.

11. Can I conduct the audits myself, or do I need certain qualifications?

ESOS audits must be signed-off by a Lead Assessor, who must be listed on an Environment Agency approved register of energy professionals. An in-house member of your team could carry out the audit provided they have the right qualifications. Alternatively, using an external consultant can really add value to your compliance as they will be well aware of the requirements of the scheme. A team member will have to invest time, potentially months, to understand ESOS fully, which is time that can be better spent on their usual day-to-day responsibilities.

12. Do I have to act on recommendations that come from the audit?

Only if you want to reap the real benefits of compliance. If you take advantage of the opportunities ESOS identifies it's likely you can cover the cost of compliance and make further savings in the future. However, implementing the recommendations is not mandatory.