Update on ESOS Deadline & Financial Implications

Whilst new research commissioned by the Department of Energy and Climate Change has found that there has been a significant increase in awareness about the Energy Savings Opportunity Scheme (ESOS) many companies still don’t know what they need to do to comply. An IFF Research survey found that 89% of businesses had heard of ESOS by June this year compared to 56% it reported in November 2014 but as the deadline looms the penalties for non-compliance are still not fully understood.

With just over half of businesses having taken steps to comply with the requirements, there are many that are leaving it very late – there is a window of just over three months for remaining organisations to meet their obligations. Anecdotally at a recent ESOS event, Lead Assessors are seeing a marked upturn in both proposal requests and instructions. In fact many assessors are now turning away work as their resources are stretched to their limit.

Companies that don’t comply with the 5th December deadline could (from the 29th of January) face up to £100,000 fines – £50,000 for not undertaking the ESOS assessment and around £50,000 additional fines for not using an accredited ESOS assessor, maintaining records and daily fines until these are complied with. Criminal proceedings could also be taken for non-compliance.

Complying with the ESOS regulations is designed to achieve far more than just reporting energy consumption. One of the main things to appreciate about ESOS is that while compliance with the Regulations will avoid fines being applied to the business, there is an enormous opportunity for businesses to use the information generated for compliance to drive energy efficiency within their organisation. In fact the costs for compliance are likely to be quickly recouped should the organisation realise the opportunities presented to the board level executive.

ESOS compliance must be managed by an approved Lead Assessor and, at the time of writing, there is an ongoing shortage of suitably qualified people. The EA estimate that the number of qualified assessors is currently between 800 and 900, versus an estimated 10,000 organisations captured by the scheme. Among those assessors though, there will be a reasonable number who will not be marketing their services as a Lead Assessor to external organisations and will focus solely on their company’s compliance. This poses a significant threat to those businesses leaving it late to comply and having to take a chance on finding both a competent assessor and one who has capacity to do the work.

For more information contact Iain Fraser/020 3544 3998.