The EU, as part of its drive to save 20% of primary energy consumption by 2020, has created the Energy Efficiency Directive. Part of this ruling states that all EU member states must introduce a programme of regular audits for large organisations. The UK government has responded by launching its Energy Savings Opportunity Scheme (ESOS), which decrees that large businesses must carry out compulsory energy audits. Legislation passed in June 2014 states that it is now a legal requirement for these enterprises to have their energy management systems audited in order to identify potential energy-efficiency improvements.
Which businesses need to have an ESOS energy audit?
Organisations which qualify for an ESOS audit are those defined as a ‘large undertaking’. This means a business or body employing at least 250 people or one with a yearly turnover of over €50 million (approximately £40 million) plus an annual balance sheet of at least €43 million (approximately £33.5 million).
If your organisation qualifies for ESOS but is covered by ISO 50001 then you won’t need to be audited. If this is the case, you must inform the Environment Agency.
What are the criteria of an ESOS energy audit?
To be fully compliant, organisations must:
- Analyse their energy consumption and energy efficiency by breaking down the ways in which energy is used within the business.
- Identify opportunities to save energy where practicable and cost effective. Cost effectiveness is measured by comparing the value of the proposed energy usage reduction with the cost of implementing the action.
- Provide 12 months’ verifiable data covering a continuous period which began no more than two years before the start of the audit.
When is the ESOS deadline?
Organisations must determine whether they qualify for the scheme by 31 December 2014, with an audit to be completed by 5 December 2015. Following that, companies must carry out an ESOS audit every four years.
What is the penalty for non-compliance?
Depending on where you’re based, your company will be regulated by one of the following bodies:
- England – Environment Agency
- Northern Ireland – Northern Ireland Environment Agency
- Scotland – Scottish Environment Protection Agency
- Wales – Natural Resources Wales
- Offshore – DECC Offshore Oil & Gas Environment and Decommissioning.
If your business fails to meet ESOS requirements by December 2015, the relevant regulator may impose a penalty of up to:
- £5,000 for failing to maintain adequate records
- £50,000 for failure to undertake an ESOS assessment or making a false or misleading statement
- An additional £500 for every subsequent day of non-compliance.
It’s clear that meeting the upcoming ESOS regulations must be a priority for energy managers as we enter the final quarter of the year. It’s time to determine whether your business qualifies, and if it does, to begin planning for an ESOS audit.