6 months to comply: Why businesses should be acting now on ESOS Phase 2

The December 5th deadline for complying with Phase 2 of ESOS – the Energy Savings Opportunity Scheme – is now 6 months away.

But are enough companies actively preparing for ESOS phase 2, or will it be a dash to the finish line?

We’ve asked our experts to give us 5 reasons why organisations should be taking ESOS seriously, and making the most of compliance.

1.     You will still need to comply with ESOS after Brexit

The Energy Savings Opportunity Scheme was introduced to meet the requirements of the EU Energy Efficiency Directive, so many businesses are asking whether ESOS will apply post-Brexit.

The short answer is: Yes. ESOS is underpinned by UK legislation so it’s here to stay for the time being.

Post Brexit, the EU laws we abide by will be transposed into UK domestic law. That means that ESOS will remain unchanged for the foreseeable future, and organisations are still required to comply with phase 2 by the Dec 5th 2019 deadline.

2.     Last minute action could affect cost and quality

During Phase 1 of ESOS, around 2,800 organisations notified the Environment Agency that they would be late in reporting ESOS compliance. ESOS Phase 2 may see similar bottlenecks.

Our expert said: ‘I’d anticipate limitations on availability of Lead Assessors and maybe a last minute rush of orders for compliance work.  Many companies are just not committing yet due to uncertainty surrounding government policy and Brexit. But the truth is – ESOS phase 2 is not going away, and tackling compliance late in the day will likely lead to increased compliance fees and poor quality audits due to late commitment and availability of ESOS Lead Assessors.’

3.     The penalties for non-compliance are real

The Environment Agency isn’t afraid to name and shame companies that failed to comply with ESOS phase 1. Since enforcement began, the amount of fines issued total £244,320.

26 firms have been fined since enforcement began, including Ebay (UK) Ltd, and Gumtree.

4.     You already have the energy data you need

Your ESOS energy audits need to have at least one year’s energy measurement, but this can be from any time between 6 December 2014 and 5 December 2019. You can use data that has been collected at any time during this period provided that the audit itself is carried out no later than 24 months after the data period and the data has not already been used for an audit in Phase 1.

You can also now determine your qualification status and calculate your Total Energy Consumption (TEC) – this is based on your selected reference period which must include the qualification date of 31 December 2018 and end before the compliance date of 5 December 2019.

5.     ESOS offers genuine commercial opportunities

Your ESOS energy audit must include recommendations for cost-effective energy efficiency improvements. These could include, as an example, investments in more energy efficient equipment, installing smart meters, or replacing business travel with video conferencing.

This is an opportunity to present a strong business case to your organisation to get the go ahead on energy reduction projects, which will reduce your carbon footprint and improve your bottom line. Read our guide on ‘investment grade audits’ and how to get started.

Questions about ESOS? Read our answers to the top ten questions on ESOS, or get in touch if you need advice.