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ESOS Phase 2 has arrived!

11th April 2018

Start planning for maximum value by going through the compliance process

It is official – the compliance period for Phase 2 of the UK government’s Energy Savings Opportunity Scheme (ESOS) is underway and qualifying organisations are now able to begin the compliance process. Although there are some exemptions for public bodies, the regulations require all other large UK organisations to take three important steps before the compliance date of 5 December 2019:

-  Measure total annual energy consumption;
-  Conduct audits to identify cost-effective energy efficiency opportunities; and
-  Report compliance to the national scheme administrator – the Environment Agency in England, SEPA in Scotland, NIEA in Northern Ireland and NRW in Wales.

The earlier energy saving opportunities are identified, the sooner energy efficiency projects can be implemented and energy savings realised. Getting moving on ESOS Phase 2 today will also help to minimise the risk of disruption to business operations during the compliance process, and to gain maximum financial value from implementation of energy efficiency improvements.

Plan for early action with ESOS Phase 2 compliance

Planning for early action will help to avoid some of the bottlenecks and other challenges that occurred during the first phase of ESOS, where a large number of organisations were late in reporting compliance, and a number were ultimately fined.

Hundreds of compliance audits conducted for Phase 1 found that just 16 percent of participants were fully compliant, whilst three-quarters of audited participants needed to undertake remedial actions in order to become compliant. Hundreds of organisations (one in twenty) were deemed to be non-compliant, a position which can lead to substantial financial penalties being imposed by the scheme administrator.

The Environment Agency also reported that there were around 500 organisations in England alone that qualified for ESOS but had not engaged with the scheme. This has resulted in over 300 enforcement notifications sent out to date. Civil penalty proceedings have now commenced against a number of non-compliant organisations.

As well as avoiding enforcement action or the need for subsequent remedial actions, early action can help unlock the financial savings brought by greater energy efficiency. The earlier the opportunities are identified, the sooner energy saving projects can be implemented. So getting moving on ESOS Phase 2 today will help organisations to minimise the risk of disruption during the compliance process and get maximum financial value from cost-effective energy efficiency.

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