As Carbon Solutions Manager and one of the ESOS Lead Assessor’s at Utilitywise, I recently hosted a webinar detailing how to get started with ESOS compliance. To hear for yourself, you can download the webinar here.
Read on to find out an ESOS Lead Assessor’s answers to commonly asked ESOS questions.
Does the qualification date of the 31 December 2018 mean we must have registered for Phase 2 by then, or that we need to have all our data?
As with Phase 1, there’s no need to actually register for ESOS Phase 2. You are, however, required to notify the Competent Authority (the Environment Agency) once you’ve achieved compliance, which must be by 5 December 2019.
The ‘Qualification Date’ is the date on which an organisation should assess their need to comply based on the last set of accounts prior to this date, which for Phase 2 is 31 December 2018. For example, accounts up to 31 March 2018 or 31 December 2018.
After that, if you find your organisation is required to comply with ESOS Phase 2 then:
- There is the requirement to collate evidence pertaining to your organisation’s ‘Total Energy Consumption’ over the ‘Reference Period’ including the ‘Qualification Date’ (we suggest using the calendar year 2018)
- Calculate the appropriate ‘Significant Energy Use’ (SEU) which must be 90% or more of the Total Energy Consumption (TEC) and
- Decide on an appropriate audit route for compliance for the SEU
What fines have been issues for Phase 1?
We’re not aware of any fines specifically, as none of our clients have been fined. We have heard other organisations have received fines, but we don’t know the cost of these penalties. In our experience, the more dialogue you have with the Environment Agency (EA) then the more lenient they’re likely to be, as they can see your organisation is making an attempt to comply, rather than ignoring its obligations. We expect the EA will be less lenient in Phase 2.
How will Phase 2 find additional savings opportunities? Surely most low-hanging fruit recommendations will have been implemented after Phase 1.
This could be true, however your organisation may have been through significant changes since the last compliance phase, such as building a new site, or buying another business, which could affect Phase 2 compliance and recommendations. Energy saving measures may have improved or changed since Phase 1 too – we know for example that the cost of LED lighting has dropped, so return on investment timescales may have reduced.
Perhaps not all of your sites were audited in Phase 1; should these sites be audited for Phase 2 (or a different sample taken, if sampling is appropriate) then new recommendations may come to light.
Does ESOS feature any requirement to take recommendations forward?
The answer to this is no – there is no mandate in the regulations to implement the recommendations, nor to notify the EA of what the recommendations were. However, our advice is to act on what you can to at least cover the cost of audits and compliance, so that ESOS becomes cost-neutral for your business. Of course Utilitywise can help you can go the extra mile to make significant improvements to your energy efficiency to further reduce your costs in the future.
For organisations that must be compliant in multiple countries, is the deadline for each country the same as in the UK?
Each EU member state has implemented article 8 of the EU Energy Efficiency Directive (from which ESOS legislation is derived) slightly differently; for example, Germany is largely focusing on ISO 50001, and Portugal has used an existing audit scheme.
Our advice is that each country must refer to its designated regulatory authority for deadlines and clarification.
In terms of balance sheet calculation for assets in relation to qualifying criteria; would the balance sheet total be Assets minus Liabilities or Asset value only, regardless of any Liabilities?
The balance sheet total would be Assets minus Liabilities and would balance against the capital of the business.
For more answers, catch up on our March ESOS webinar
If you missed our recent March webinar you can download the recording below to listen again. You’ll find answers to commonly asked questions, how to get started with ESOS now, and the benefits of compliance.