ESOS: Your top ten questions answered

Phase 2 of the Energy Savings Opportunity Scheme is here – and with around ten months to go until the December 5th 2019 deadline, we’ve compiled ten of the most popular questions that we receive at the Hub.

1. Does my company qualify for ESOS phase 2?

ESOS applies to large UK undertakings and their corporate groups. It mainly affects businesses but can also apply to not-for-profit organisations and any other non-public sector undertakings that are large enough to meet the qualification criteria, which are:

  • Any UK company that either employs 250 or more people or has an annual turnover in excess of €50million (£38,937,777) and an annual balance sheet total in excess of €43million (£33,486,489).
  • An overseas company with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK).

2. How will ESOS be affected when we leave the EU?

ESOS was established by UK government to implement the EU Energy Efficiency Directive, so many people are asking whether the scheme will be around when we leave the EU.

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.

The government has said it is committed to maintaining the standards of carbon reporting already established under overarching EU environmental laws and the UK Climate Change Act, even after Brexit.

3. Do I need to appoint a lead assessor for my ESOS audits, or can I do everything in house?

You will need to appoint a qualified lead assessor to check that your assessment meets ESOS requirements (unless 100% of your energy use is covered by ISO 50001 certification).

Your lead assessor can either:

  • carry out your ESOS assessment and audits themselves
  • check that the assessment and audits done by people who aren’t lead assessors meet the requirements.

4. How do I know if a lead assessor is qualified and capable of delivering my ESOS reports?

Your lead assessor MUST be a member of an approved ESOS lead assessor register. You can find the list of approved registers on the website.

As for capability, it’s important to ask your lead assessor the right questions. What was their track record for ESOS phase 1? How many of their customers met the deadline and achieved compliance? What experience do they have in your sector? Can they help you recoup costs by implementing energy saving opportunities?

For more advice on choosing a lead assessor, read our guide.

5. Should I consider ISO 50001 as a route to ESOS compliance?

The ISO 50001 standard supports organisations to become more energy efficient through the development of an energy management system.

Not only does it provide a robust framework for energy management, it also helps you to comply with ESOS: If you are fully covered by ISO 50001, you don’t need to carry out an ESOS assessment.

The time and costs involved in achieving the standard will factor in your decision. Read our guide to ISO 50001 and ESOS to help you decide.

6. Will some firms need to report under both ESOS and SECR (the new Streamlined Energy and Carbon Reporting Scheme)?

Yes! BEIS’s impact assessment suggests around 25% of companies affected by the reporting regimes will end up falling under both.

To explain further; ESOS and SECR both require the measurement of energy consumption; once every four years under ESOS, and annually for the SECR framework.

With some smart planning you can transition easily from ESOS data reporting to SECR data reporting when it starts in April 2019. Contact us for advice on streamlining your reporting.

7. What transport consumption data do I need to report through ESOS?

You only need to include data on transport that your company operates, e.g:

  • Fuel used in company cars on business use
  • Fuel used in fleet vehicles which you operate on business use
  • Fuel used in personal/hire cars on business use
  • Fuel used in private jets, fleet aircraft, trains, ships, or drilling platforms which YOU operate.

If your employees take trains, flights or taxis for business use, that are not operated by the company, then you don’t need to report on these. You also don’t need to report on fuel used by subcontractors in transporting goods.

For advice on how to start gathering transport data, read our guide.

8. Are landlords responsible for the energy consumption of tenanted properties under ESOS?

Where the landlord supplies energy to a tenant, the tenant is responsible for the energy it consumes. I.e. this energy should form part of the tenant’s total energy consumption.

This is easily determined if the energy is measured, e.g. by a sub meter.

However, where a landlord provides energy to shared parts of a building, the landlord must include that in calculating its total energy consumption.

9. What reference period should I use when calculating Total Energy Consumption?

You must calculate your Total Energy Consumption over a reference period of 12 consecutive months. The reference period must include the qualification date and end before the compliance date.

So – for ESOS phase 2 – the period must include the qualification date of 31st December 2018, and end before the compliance date of 5th December 2019.

Your Significant Energy Consumption on the other hand, can be calculated using a year’s data from any time between 6 December 2014 and 5th December 2019. Different energy streams can be audited at different times, so the workload can be better spread to suit your business needs.

10. How do I identify energy saving 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. Read our guide on ‘investment grade audits’ and how to get started.

Do you have a question we’ve not answered? Contact us for advice.