A new mandatory energy assessment and saving scheme has been introduced by the ESOS Regulations 2014 which applies to any ‘large undertaking’ in the UK. This is known as the Energy Savings Opportunity Scheme ‘ESOS’ and requires qualifying organisations to have an audit carried out. The audit should identify areas of energy conservation saving which can be implemented in order to reduce usage.
Who qualifies for this scheme?
A company is considered to be a ‘large undertaking’ in the UK for the purposes of ESOS if on the 31st December 2014 it meets either of the following conditions:-
1) It employs 250 or more people or;
2) It has an annual turnover in excess of 50 million euros (£38,937,777) and an annual balance sheet in excess of 43 million euros (£33,486,489).
The qualifying condition at 1) above means that it will apply to many large umbrella companies or employment businesses which employ their workers.
What do you have to do?
A company that qualifies for the scheme must complete an ESOS assessment. In order to do this, a company must:-
1. Appoint a lead assessor who must be a member of an approved professional body
2. Calculate the company’s total energy consumption
3. Identify areas of significant energy consumption
4. Notify the Environment Agency of the company’s compliance
5. Keep records
Qualifying companies are required to submit their notification of compliance to the Environment Agency by the 5th December 2015, or at the very least have notified the Environment Agency by the 5th December if they are unable to meet this deadline. The Environment Agency has suggested that enforcement action is unlikely to be taken if a notification of compliance has been received by them by the 29th January 2016, however, this is not definitive.
How does this scheme apply to a group of companies?
The ESOS applies to a group of companies even where only one of the companies within that group fits the above criteria. If this is the case, all UK undertakings in that group must participate, regardless of the size of the individual companies.
What will happen if you don’t do this?
The penalty for not complying is £5,000 plus a daily penalty of £500 for up to 80 days. Should an audit not be conducted or a false or misleading statement be given, a fine of £50,000 and the same daily penalties will be applied.