arrow-left Back To All Posts EV Charger funding for UK...Read More
The qualification date for Phase 3 of the ‘Energy Savings Opportunity Scheme’ (ESOS) was 31 December 2022, meaning if your business is in scope for Phase 3, you must comply with the reporting criteria. Your business will be in scope of ESOS from that date if it has either or both:
Large UK firms are required to report on their energy consumption and find potential methods to consume less energy under the ‘Energy Savings Opportunity Scheme’, which is a mandated programme. We are now in Phase 3 of its four-year cycle. If your company falls inside the scope of the plan, you must abide by the rules or risk fines.
Organisations who fail to comply with ESOS regulations or meet the required criteria risk facing financial penalties from the Environmental Agency (EA). The changes to legislation in 2022 have also increased the reporting requirements for Significant Energy Use (SEU) from 90% to 95%.
Additionally, with limited ESOS Lead Assessors available for ESOS Phase 3 compliance, it’s crucial for companies to act now to ensure compliance and avoid potential fines and penalties.
All non-compliance will be made public by the EA on their website, with the amount you were fined. There are different types of non-compliance all with separate breaches and various penalty amounts. These include:
Any organisations who do not declare they have met with their ESOS responsibilities will be punished since it will compromise the integrity of the programme. Whether or not the organisation has conducted an energy audit, they might still be fined up to £5,000 as well as a daily fee of £500 for each working day they are in violation (for a maximum of 80 days). This amount would be added to any additional penalties as well.
Maintaining your records is essential so that you can carry out an energy audit and provide proof of your ESOS compliance. In the event that this is not done, there will be a £5,000 punishment as well as an “amount representing the cost to the compliance body of establishing that the responsible undertaking has complied with the plan,” which must be settled. To correct this violation, the compliance body will provide measures, which must be followed.
The greatest punishment is assessed when an energy audit is not performed because it is a crucial ESOS obligation. It is worth making sure you comply if required since the fine is £50,000 as well as £500 for each working day an organisation is in violation (up to a maximum of 80 days). With a decreased fine of £5,000, new entrants are treated more leniently. Keep in mind that organisation is no longer regarded as a new participant in the ESOS program’s second phase. Additionally, corrective measures (such as doing an energy audit) must still be taken.
Any organisation that disregards a compliance, enforcement, or penalty notice will be subject to this fine. An organisation will be subject to an initial punishment of £5,000 followed by £500 for each day that it is in breach, up to a maximum of 80 days.
Your ESOS evaluation and report must be factually correct and accurate. The largest penalties, again £50,000, might be expected from an organisation if the EA finds that you made a false or misleading statement.
The final deadline to complete and submit your ESOS reporting for Phase 3 is 5 December 2023. Your data should be based on a 12-month period that includes the qualification date (December 31, 2022) and ends before the compliance date for ESOS Phase 3 reporting (5 December 2023). It might begin as early as 1 January 2022 and it could finish as late as 4 December 2023. Within that timeframe, any consecutive 12 months are acceptable. This is referred to as your reference period. During then, you need to:
You will need to calculate the total energy consumption of your business, which includes energy needed for industrial operations, building heating and lighting, and transportation fuel. These should be reported in a standard unit, such as pounds sterling or an energy unit like the kWh.
You can classify up to 5% of your organisation’s energy use as “de minimis” under the ESOS regulations for Phase 3. You might decide to exclude a location, an activity, or the use of a certain fuel. You must still have a “significant energy consumption” of 95% or higher.
Your report should examine how much energy your business uses and how energy-efficient it is. It should include suggestions for potential improvements to your company’s energy efficiency and include information on their costs and advantages. For more information, please visit EIC Route Zero.
According to the ESOS regulations, a certified lead assessor is required to review your report. Several situations constitute an exception to this rule:
If you have no energy supply (although you will still need to notify the Environment Agency and get a director to confirm this). Before approving it, the corporate directors and the lead assessor should both evaluate your report.
Our carbon team have extensive experience with complex compliance legislation and are dedicated to helping you reach deadlines efficiently. Our Lead Assessors and highly trained Auditors are on hand to assist you throughout your compliance process.
We have assisted over 550 clients with their ESOS journey, and in doing so have identified 4.65 million tonnes worth of CO2 savings. This has meant that our clients have avoided approximately £80 million worth of fines over phase 1 and 2.
Whilst balancing other jobs and responsibilities, schemes may seem like a hassle. Fortunately, EIC can help turn that obligation into an opportunity for your organisation.
Get in touch or call us on 01527 511757 to find out how we can help you start your compliance journey.
See a selection of our most frequently asked questions.
EIC stands out from other energy consultancies because we’re completely independent.
This independence allows us to offer supply options from a wide range of energy suppliers, all of whom are unrelated.
Our energy advice is unbiased, giving you the freedom to make informed decisions for your business.
We have a proven track record of skilfully negotiating cost-effective contracts, ensuring you consistently get the best energy prices when you partner with us.
If you’re already working with an energy consultancy, it’s a good idea to start exploring your options well in advance, preferably 18 to 24 months before your current supply contract expires.
It’s essential to distinguish between your energy supply contract and your energy consultancy agreement.
You have the flexibility to switch your energy consultancy while keeping your current energy supplier intact.
Our comprehensive account managed service provides our clients with peace of mind throughout the entire energy procurement process.
When you choose our fixed energy procurement service, we’ll assign an account manager to you, someone equipped with the expertise and abilities to provide a customised solution that aligns with your unique needs and requirements.
The professionals who make up our dedicated procurement team are well-versed in resolving inquiries and skilled in engaging with energy suppliers to negotiate contracts on your behalf.
The timing for transitioning to a new energy contract is flexible; you aren’t bound by a fixed schedule or renewal date.
Given the ongoing high volatility in the global energy market, it’s increasingly crucial to look beyond traditional renewal dates when contemplating a new contract.