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Preparing for ESOS Phase Two

05 November 2017

The UK Government has given the go ahead to Phase Two of the Energy Savings Opportunity Scheme (ESOS) scheme. Food Processing spoke to Richard Smith, director of business strategy for Inprova Energy about the next steps for qualifying businesses. 

Q: Could you firstly explain what ESOS Phase Two is?
ESOS is a mandatory UK energy assessment scheme that applies to 'large undertakings' (with more than 250 employees, or a turnover in excess of 50 million Euros and a sheet worth more than 43 million Euros). Qualifying businesses must measure their total energy consumption and identify energy efficiency opportunities.  

ESOS runs in four-yearly compliance phases. Phase One operated from 6 December 2011 to 5 December 2015 and the second phase follows on from 6 December 2015 to 5 December 2019. Businesses that qualified for ESOS Phase One must repeat the process if they still meet the qualification criteria, but cannot use the same data.  

A number of new businesses are now also expected to be in scope for ESOS Phase Two – due to a growth in employee numbers or turnover. Smaller businesses that are part of a larger parent group, may also find that they now fall into the scheme if one of the group companies exceeds the employee or turnover thresholds.

Q: How do companies achieve compliance?
• Determine if the organisation will qualify under ESOS legislation on the compliance date of 31 December 2018. 

• Appoint an accredited ESOS lead assessor to support the compliance process. Audit work can be carried out by suitably qualified individuals, but the overall compliance process must be verified by an accredited lead assessor.
• Carry out compliant assessment activities/audits for the compliance phase of 2015 to 2019, indentifying cost effective energy saving opportunities.  
• Measure and record the organisation's total UK energy consumption for a continuous minimum 12 month period. This must include all buildings, industrial processes and transport activities, and must include or span the qualification date of 31 December 2018.
• Complete the evidence pack and report on ESOS compliance to the Environment Agency by the compliance date of 5 December 2019.  

Q: Is there an upside of ESOS for food companies?
Although ESOS does not yet require organisations to implement the recommended energy saving measures, there is wisdom in doing so. Of over 150 ESOS audits completed by Inprova Energy during phase one of the scheme, our assessors identified energy savings opportunities ranging from between 5 and 20%. This could amount to many thousands of pounds worth of potential cost savings for typical sites so it makes sense to act on the ESOS findings.

Q: What are the penalties for non-compliance?
Failure to comply with the requirements of the scheme may result in a fixed penalty of up to £50,000 and an additional penalty of £500 per day (maximum of 80 days) until the breach is remedied. Details of non-compliance will also be published. The Environment Agency takes robust action.

Q:Can you offer any advice about ensuring compliance with ESOS? 
Businesses can gain automatic compliance by achieving accreditation under the international ISO 50001 Energy Management Standard, which specifies the requirements for building and operating a high functioning energy management system.  It is important for all of an organisation's energy data to come within the scope of its ISO 50001 certification.

Alternative routes include implementing ESOS compliant energy surveys to identify energy saving opportunities across buildings, industrial processes and transport activities; commissioning Display Energy Certificates (DECs) with accompanying advisory reports for the energy efficiency assessment of buildings; or Green Deal Assessments. 

ESOS Lead Assessors may also be able to consider audit work undertaken within the four-year compliance period (2015 -19) as part of other energy audit schemes, such as activity under the Carbon Trust Standard, and Logistics and Green Fleet Reviews, where these meet the requirements of ESOS. 

The environment agencies are encouraging businesses to begin the auditing aspects of the compliance process as soon as possible. In particular, the ISO 50001 route requires early action, as it can often take well over 12 months to put in place a high performing energy management system and achieve certification. 

Allowing plenty of time will avoid the last-minute bottlenecks experienced in the first phase and reduce the risk of penalties for non-compliance, while bringing forward cost savings from improved energy efficiency. 

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