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Focus on energy management as ESOS deadline passes

4th Feb 2016

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+44 (0) 1869 255758

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+1 (800) 450 2403

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In the UK, the Energy Savings Opportunity Scheme (ESOS) Regulations 2014 implement many requirements of the Directive. These require large companies to carry out ESOS assessments every four years. These must be carried out or reviewed by a lead assessor, who must be a member of an approved professional body register.  Notification of ESOS compliance must be submitted to the Environment Agency, who administer the scheme, which includes details of the company and how it has complied.

ESOS assessments are audits of 12 months’ verifiable energy consumption data broken down into the different ways in which energy is used. Variations in energy use are analysed to identify inefficiencies and opportunities for energy savings. An evidence pack must be produced to explain how the approach undertaken reflects the energy consumption patterns and saving opportunities of a company’s assets and activities. ESOS guidance provides further information.

Organisations fully covered by ISO 50001 (Energy Management System) are not required to carry out ESOS assessments but must notify the Environment Agency of ESOS compliance. ISO 50001 aims to help organizations save money, conserve resources and tackle climate change. It requires the development of a policy for more efficient use of energy, setting of targets and objectives to meet the policy, using data to better understand and make decisions about energy use, measuring the results, reviewing the effectiveness of the policy and continually improving energy management.

The revised deadline for the first ESOS compliance period passed on 29 January 2016. However, the Environment Agency has confirmed that less than 60% of obligated businesses had complied by that date. There is an extended deadline of 30 June 2016 for organisations committing to achieving compliance through ISO 50001 certification. Companies can expect that enforcement activities will increase after that date and risk an initial financial penalty of up to £5,000 and a daily penalty of up to £500 for each working day they remain in breach.

The UK Department of Energy and Climate Change have released guidance on how to implement energy saving opportunities identified by ESOS audits. Although, there is no regulatory requirement for participants to implement the energy saving opportunities identified, it is prudent for companies to manage energy efficiently to reduce costs and future compliance risks. This requires a robust system for monitoring energy use and providing the documentation required for current and future compliance with energy efficiency regulations.

Government is currently analysing feedback on a consultation on Reforming the business energy efficiency tax landscape which may impact on regulations, including ESOS, the CRC Energy Efficiency Scheme and Climate Change Agreements. Companies affected by these should follow legislative developments and review their current systems against ISO 50001. 

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