Hundreds of enforcement notifications on ESOS compliance were sent out before the summer break and it is likely many more will follow. The qualification date of 31st December 2018 for Phase 2 is fast approaching. Companies meeting the eligibility criteria on this date will need to ensure they have put in place systems to measure their energy use for a period of 12 months, inclusive of this qualification date.
Eligible companies are defined as a large undertaking under the following criteria:
- employ 250 or more people; or
- have an annual turnover in excess of 50 million euro (£38,937,777), and an annual balance sheet total in excess of 43 million euro (£33,486,489).
A more detailed description of the qualification criteria can be found here.
There are just over 12 months until the final report for this phase must be submitted, the deadline is 5th December 2019. Only 15% of qualifying UK organisations were compliant ahead of the Phase 1 deadline in 2015. The majority had to undertake remedial actions or did not engage with the scheme at all, facing a severe financial penalty.
Even if a company completed an assessment during Phase 1, a new assessment for Phase 2, with a new round of monitoring, auditing and identification of energy saving measures must be completed if the business still qualifies.
Developing a Monitoring Strategy
Qualifying companies should, where possible, plan ahead and put in place strategies for monitoring energy use across their portfolio. However, it is not too late to start, Greengage have extensive experience in monitoring and auditing energy uses, as well as submitting final assessments on behalf of clients. One of our existing clients recently won a Green Apple Award for innovative work in monitoring construction related energy use. This monitoring work was a recommendation from our early ESOS work. Click here to find out more.
Holistic approach to gain value beyond compliance
Embedding energy efficiency obligations into larger sustainability or compliance strategies can have real financial and operational benefits. The International Energy Agency (IEA) found that improved energy efficiency can deliver
“multiple benefits across the industry value chain, leading to enhanced competitiveness, more cost-efficient production, and reduced operation and maintenance (O&M) costs. It can also lower the costs of environmental compliance and improve the working environment for employees.”
Organisations who fully engage in the ESOS process go beyond compliance and add value in performance from detailed and bespoke energy efficiency recommendations, such as energy monitoring, BMS/control system optimisation and staff engagement.
TOP TIPS FOR COMPLIANCE
- Understand the ESOS Phase 2 requirements – participants should review the expectations of ESOS Phase 2 and how it will impact your business and facilities, including the various requirements and timelines.
- Energy audits on highest consuming assets – participants should consider early on in the process how to collect and use data for other reporting schemes (e.g. SECR), programs or initiatives to avoid wasted time and resources.
- Start saving early – participants starting now will be able to prepare strategies, resources and budgets to act on the energy efficiency recommendations uncovered by the ESOS audits, and ultimately drive change across their entire company.
The Energy and Carbon Management team here at Greengage can help you with each of the above tips. Just contact Tom.firstname.lastname@example.org to start the process.
SECR Requirements Align with ESOS
Further energy related legislation is on the horizon with the new Streamlined Energy and Carbon Reporting (SECR) regulations due in Q2 of 2019. SECR will replace the Carbon Reduction Commitment (CRC) with a simpler reporting framework that builds on the existing mandatory reporting of greenhouse gas emissions by UK quoted companies and ESOS.
The new SECR reporting framework will apply to all quoted companies and apply to large UK incorporated unquoted companies; and will have similar qualification criteria to ESOS (at least 250 employees, or annual turnover greater than £36m, and an annual balance sheet total greater than £18m).
SECR is currently awaiting parliamentary approval and it is expected to come into effect in April 2019.