Understanding ESOS Phase 3: Key Requirements for Businesses
What is ESOS?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory program in the UK targeting large businesses. It requires them to assess their energy consumption, identify areas for improvement, and implement measures to become more energy-efficient. This not only benefits the environment by reducing carbon emissions but also translates to cost savings for the businesses involved.
Who Needs to Comply?
Large undertakings as defined on December 31, 2022 are required to comply with ESOS. This applies to:
• Companies employing 250 or more people.
• Companies with an annual turnover exceeding £44 million and a balance sheet exceeding £38 million.
What Actions are Required in Phase 3?
Phase 3, currently ongoing, introduced stricter regulations compared to previous phases. Here's a breakdown of the key requirements:
1. Appoint a Qualified Lead Assessor: An approved professional must review and sign off on the energy audit report.
2. Measure Total Energy Consumption: This covers a 12-month reference period ending before June 5, 2024.
It includes energy used in:
o Buildings (heating, lighting, etc.)
o Industrial processes
o Transportation (company vehicles)
3. "De Minimis Exemptions" (Optional): Businesses can exclude up to 5% of their energy consumption from the report.
4. Calculate Energy Intensity Ratios: This involves expressing energy use in relation to:
o Buildings: kWh per square meter
o Transport: kWh per mile travelled
o Industrial processes: Energy consumed per unit of output
Reporting and Action Plan:
• Completion of the Report: Analyse your organization's energy consumption and efficiency.
• Recommendations for Improvement: Identify cost-effective measures to reduce energy use.
• Board-Level Sign-off: Get the report approved by a director.
• Develop an Action Plan: Outline specific actions to achieve energy savings over the next four years. This includes:
o Planned measures to reduce energy consumption
o Timeline for implementation
o Expected energy savings
o Method used to estimate savings
Key Deadlines:
• Compliance Notification: Submit to the Environment Agency by June 5, 2024 (previously December 5, 2023).
• Action Plan Submission: December 5, 2024.
Additional Information:
• Businesses that qualified for Phase 2 but not Phase 3 should inform the Environment Agency.
• The Environment Agency website provides further details and resources: https://www.gov.uk/guidance/energy-savings-opportunity-scheme-esos
If you require assistance with your ESOS compliance, contact us today to see how we can assist you ahead of the deadline.
