The scheme covers energy use of UK companies employing more than 250 people with an annual turnover of greater than £44m and an annual balance sheet total greater than £38m. Companies that don’t carry out an energy audit or file a report can be fined by the Environment Agency, as well as named and shamed.
Introducing the idea behind the scheme is George Richards, director of environmental consultancy JRP Solutions, which is a qualified ESOS lead assessor. “Previously, energy was never given priority or focus in boardrooms. A lot of energy was being wasted across UK PLC. When ESOS came in, the idea – particularly with the director having to sign off the report – was that it would be seen as an opportunity; they would be encouraged to invest in some of the opportunities and make them happen.” While in the early days this was seen as a tick-box exercise, attitudes are now changing in the face of the energy crisis and drive to net zero, he reports.
Compared to the previous Phase 2 filing process, some of the changes required for Phase 3 are minor; all data must be verifiable and evidenced, the organisational structure has to be clear and include company numbers and SIC codes, as well as an energy metric such as intensity (kWh/unit of production or per m2 of office space, for example). Companies also have to report on any energy conservation measures (ECMs) have been carried out since Phase 2, although there is officially no obligation to actually implement them.
Energy usage needs to be split between building, process and transport (including so called ‘grey fleet’ – employees’ own vehicles). And although 100% of energy must be accounted for, only 95% has to be audited; that’s up from 90% before. Data submitted needs to be 12 months’ continuous energy that includes the so-called ‘qualification date’ of 31 December 2022.
One of the largest open questions actually relates to a post-Phase 3 requirement. Between 6 June and 31 December 2024, companies must file an action plan, the nature of which remains unclear, and will require further clarification from government, Richards says. And it’s still possible that the requirements might change, he adds, putting the company’s assessment work in regulatory limbo, and increasing costs.
In JRP’s case, all of these contracts include the audit as well as the assessment. Lead assessors carrying out the mandated review of the ESOS report are required to be approved by a trade body (see also www.is.gd/vayiba).
Richards adds: “With a site visit, the point is to get an understanding of how energy is managed, or not; to identify and look at the culture around energy. Is it important? Is it a focus? Do they have good data collection? What is the quality of the data, and metering systems? Do they have good MMT: measurement and management technologies. Do they have team meetings, and an awareness of energy?”
And JRP at least follows up to help its clients implement ECMs. He concludes: “We can investigate alternative methods for delivery...and help improve reporting, metering, data and behaviour change. That last one is a big opportunity that is often ignored or undervalued.”