The Energy Savings Opportunity Scheme, or ESOS as it is affectionately known, is big news for big businesses in the UK. On the one hand, it’s a chance for businesses to refine and evaluate their operational and cost efficiencies, and to become more profitable as a result. On the other hand, it’s another piece of legislation, among all the other legislations you need to sort out, that could see your business left out in the cold if you’re not ready to become compliant.
Around 7,000 large businesses in the UK are currently affected by the ESOS scheme, and by mid-2015 only 85 had notified the Environment Agency about their compliance (1). This suggests that many businesses would have had a bit of a panic on their hands to meet the original December deadline, and probably a good number have already requested an extension.
Whether you’re a big business owner or are just curious about what the ESOS is going to do for the UK, here’s what you need to know about the scheme and what compliance really entails:
What is ESOS?
ESOS has been stimulated by a piece of EU legislation, specifically the European Union’s Energy Efficiency Directive which came into effect in December 2012. It is monitored and administered by the Environment Agency, and was put together by them along with DECC and the Carbon Trust (2).
ESOS aims to reduce the amount of energy used by larger businesses, and initial estimations by the Carbon Trust and DECC show that with just a 6 per cent reduction from the UK’s largest businesses, the nation could save enough power to take care of 160,000 homes; around 3TWh each year (2).
Who is affected?
ESOS is designed to encourage bigger businesses to become more efficient, both in terms of energy directly and in their operations in general. Companies which are affected will usually employ more than 250 people, or will have a turnover of more than £38 million / €50 million (3). For international corporations, if the UK arm of the business exceeds either of these thresholds, you’re within the remit of ESOS (3).
Government bodies are not included, but charities are. SME’s are not mandatorily included, but can undertake the assessments and avail of the recommendations in order to improve and increase efficiencies within their business. Businesses who are covered by ISO 50001 will not need to carry out a full ESOS assessment (4).
What does it mean?
Simply put, ESOS is a scheme which encourages businesses to assess their energy usage, and to make relevant efficiency improvements as a result. This is delivered by way of a mandatory annual audit. As a minimum, the assessment must provide:
- A complete review of energy use within the business, and the intensity of energy use for the company
- An identification of effective energy saving opportunities, quantified by cost savings also
Assessments can only be conducted by ESOS approved assessors, which usually means you will need to employ a consultant or see what help you can get from your energy supplier.
Help from energy suppliers
Most of the ‘big six’ energy suppliers are offering some form of help to businesses looking to comply with ESOS. npower, for instance, are offering assistance to their electricity and gas customers (7), by way of:
- Extracting electricity and gas supply data for audit purposes
- Offering advice on other fuels such as transport
- Proving support for the audit and identification of energy efficiency opportunities
- Ensuring all the necessary requirements are fulfilled
- Assistance with implementing post audit recommendations
Undoubtedly npower are not the only major fuel supplier willing to offer this important and significant assistance with ESOS. If you are a larger business and are looking for an easy route to compliance, you would do well to speak to your fuel supplier first and see what expert advice and support is available from them.