Time running out for businesses to be ESOS Phase Two compliant

With the compliance deadline now less than four months away, it’s crucial that companies act immediately – not only to get measures in place to make savings on their energy bills but to help to cut the UK’s carbon emissions.

Failure to comply with Phase Two of ESOS by December 5, 2019 could also result in significant fines.

Colin Jones, managing director at Inteb Managed Services, whose team of energy managers, surveyors, utility and environmental specialists serve commercial clients in both public and private sectors from their national headquarters at Egerton House, Birkenhead, explained: “ESOS has been designed to encourage larger businesses to be more energy efficient and its aims are two-fold – to reduce their energy bills and, equally important, reduce the nation’s carbon emissions.

“To meet the second phase of this government initiative – Phase One was completed in 2015 – companies need to get all their documentation in place. And with only a matter of months to get this done, time is running out.

“Leaving it any later could create serious problems as the original first phase proved when almost half of the businesses fitting the ESOS criteria missed the deadline for compliance by many months and were fined as a result, many quite substantially.”

ESOS, which is mandatory and administered by the Environment Agency, requires businesses to carry out an audit of their energy-consuming activities and identify cost-effective energy-saving measures once every four years.

Companies need to comply with ESOS if they have:

  • More than 250 employees
  • An annual turnover of more than €50m
  • An annual balance sheet of more than €43m

Before the deadline date of December 5, companies need to comply through an approved route such as:

  • Measuring their total energy consumption - energy used, transport fuel and industrial process 
  • Conducting audits to identify cost-saving energy efficiency opportunities for 90 per cent of the total energy
  • Reporting compliance to their national scheme administrator – the Environment Agency in England, SEPA in Scotland, NIEA in Northern Ireland and NRW in Wales

Alternatively, organisations can comply automatically when 100 per cent of the organisation’s energy use is certified to ISO 50001.

The first compulsory audit of ESOS Phase One in 2015 saw many companies struggle to work out how to be compliant; 2,800 organisations were late in providing compliant audits and many were fined.

Despite the problems, the benefits of implementing ESOS recommendations made dramatic cuts in energy consumption and carbon production, resulting in significant financial and environmental rewards for businesses. Around a third of businesses implemented at least one ESOS recommendation following the 2015 audit; however, many failed to do so.

Analysts have forecast that businesses may be paying 50 per cent more for power in 2020 than they were in 2016, with non-commodity costs - which make up around half of business bills - and the sharp rise in wholesale markets driving up prices. Added to this is the possible impact of Brexit on sterling along with the increase in the Climate Change Levy.

Colin added: “As well as dealing with these vital issues of saving energy to cut costs and reduce our carbon emissions, ESOS Phase Two is a chance to learn from some of the mistakes of Phase One non-compliance. It’s also an opportunity to take advantage of the opportunities the scheme provides and help organisations reach their financial and environmental targets.

“Many companies were late providing audits in 2015 because of delays in starting the process or being unclear about how to be compliant. However, for compliance with Phase Two – and avoid the pitfalls of the previous process - there is still some time to collate the necessary data before the December deadline.”

Inteb Managed Services and its team of energy managers, surveyors, utility and environmental specialists, who serve a wide range of commercial clients in both public and private sectors, can help large organisations meet ESOS Phase Two requirements by getting in touch with Tom Kelly 0151-601 3476 or by emailing info@intebms.com

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