ESOS, launched on 26th June 2014 by the Department for Energy and Climate Change (DECC) is in response to the upcoming implementation of Article 8 of the EU Energy Efficiency Directive.

So what is ESOS? It stands for energy saving opportunity scheme. It requires all large businesses in the UK to undertake mandatory energy usage assessments. This must take place at least once every four years.

The ESOS regulations apply to any large company, organisation or corporate group that either employs over 250 people, or has a turnover in excess of £43.5 million. Approximately 7,300 businesses across the UK are expected to be affected by ESOS. Companies with complete ISO 50001 accreditation do not need to carry out an ESOS assessment, the Environment Agency simply needs to be notified of ESOS compliance. The public sector will not be affected, just private, and third-sector organisations.

Organisations must be qualified for ESOS by 31st December 2014, with the first ESOS assessment being carried out before 5th December 2015.

Failure to comply with ESOS will result in fines of up to £50,000 and possible charges of an additional £500 per day for up to 80 days. Non-complying companies will also be named and shamed.

To comply with ESOS, businesses will need to:

  • Complete an initial estimate of their total energy consumption. This to cover energy used in buildings, transport, and industrial processes.
  • Identify areas of areas of significant energy consumption, comprising at least 90% of their total energy consumption.
  • Appoint a “Lead Assessor” to conduct and/or oversee a detailed energy audit of those areas in which to establish where energy savings can be made.
  • The ESOS assessment must be reviewed and signed off by the Lead Assessor and a board level director. This aims to ensure that board members are fully aware of the identified energy saving opportunities.
  • The Environmental Agency needs to be notified that the company has complied with the scheme. This is the ESOS participant’s responsibility, not the Lead Assessors.

The energy audit is the examination of how energy is used in the organisation. It should include

  • Measurement of energy consumption of an organisation’s assets and activities by a review of the energy data. This data from measured energy use, which includes electricity, combustible fuels, heat, and so on.
  • Identifying any variations in energy consumption and the main reasons for these variations.
  • Identification of cost effective energy saving opportunities.
  • The audit must include site visits to ensure that the recommendations are practical and specific to the organisation.

Lead Assessors must be members of an approved register. Operators of such registers must apply to the Environmental Agency to gain certification for their members under PAS 51215. Lead Assessors can therefore either be in-house experts, or external consultants, provided that he/she is a member of an approved register. Its goes without saying that the Lead Assessor must have the correct level of expertise and knowledge to carry out the energy efficiency assessment. PAS51215 describes this in detail.

Although at present there is no legal requirement to implement recommendations made by the audit, businesses will also be encouraged to look at, and invest in, energy saving opportunities as part of the assessments to help meet the government’s target of reducing UK greenhouse gas emissions by 80% by 2050.

ESOS may be viewed as yet another level of time-intensive and costly enviro-compliance on top of the existing Carbon Reduction Commitment, Mandatory Carbon Reporting and Climate Change Levy. It does however allow a fresh look at an organisations energy usage, with potential savings projects being reported at board level.