Wednesday, 5 August 2015

The energy efficiency scheme announced by the government, the Energy Savings Opportunity Scheme or ESOS for short, has come in for a lot of criticism since its first publication on the UK governments’ website back in June 2014.

We are now almost a year on from when this was published, so how has the scheme been received by UK businesses?  The answer, with a lot of scepticism, with confusion about what is required still evident among many affected businesses.

ESOS, like its other sister schemes the CRC Energy Efficiency Scheme, Display Energy Certificates and Green Deal Assessment, is designed to encourage UK businesses to monitor their energy usage and identify where savings can be made to reduce the amount of energy used.

So how does ESOS work?  Large businesses in the UK with more than 250 people or turnover of more than £42.5 million need to carry out an audit of their energy use across the business, identify opportunities where savings can be made and submit this information to the Environment Agency.

However, once the information is given to the Environment Agency, that’s where the story ends. Rather bizarrely, ESOS does not set out ANY energy or reductions targets for the businesses involved to actually implement the energy savings opportunities identified within the audit.

A lack of legislative bite is not the issue here, as non-compliance with the new ESOS scheme is enforced by the Environment Agency in much the same way as the CRC Energy Efficiency Scheme. This will see significant civil penalties issued to companies that don’t comply with the ESOS deadline on 5th December 2015.

This seems odd, as surely for an energy efficiency scheme to work and actually have a contribution to the UK’s overall 2020 emissions reduction targets (the reason the government told us they announced this scheme), there needs to be a mechanism to capture the energy savings ESOS can deliver.

Could this be a sign that the government is breaking UK businesses in gently to ESOS, and will revise the scheme in due course to add this missing element of accountability?  There are no signs so far of this, which has left a lot of UK business leaders wondering why ESOS compliance should be taken seriously.

However, despite the misgivings and shortfalls of the scheme, ESOS is very much here to stay and is something that UK business cannot ignore.  The best way to ensure you comply is to act early, book your ESOS audit now and engage your suppliers to carry out in-depth energy audits, make recommendations but actual capitalise on the opportunities from the scheme and implement them and measure the savings achieved.  That way, you have everything you need and more to comply with ESOS and many other energy efficiency schemes.

To find out more about ESOS, discuss your energy usage and how best to audit it and implement energy saving recommendations, contact the ABB Energy & Productivity team.

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