Energy Savings Opportunity Scheme: Phase 3 guide

energy-savings-opportunity-scheme

The Energy Savings Opportunity Scheme (ESOS) phase 3 is well underway and with the deadline of 5th December 2023 less than 18 months away, many businesses are choosing to get ahead of the game to avoid any last-minute panics. It’s never too early to start thinking about your phase 3 compliance.

Here we explore everything you need to know about the Energy Savings Opportunity Scheme phase 3 in our ESOS: phase 3 guide.

Qualifying criteria

Many businesses are now familiar with the requirements of the scheme, but for some this may be the first occasion they have met the qualification criteria. Businesses affected include those who employ over 250 people or meet both of the financial criteria of an annual turnover in excess of £44m and an annual balance sheet total in excess of £38m.

You can also be a much smaller business, but if you are part of a group where one of the group companies meets the above criteria, then by default, you also need to comply.

Get started on phase 3 compliance

There are many benefits to starting your phase 3 compliance early. It has been a common occurrence of previous phases, that businesses leaving things until the last minute often struggle to secure a Lead Assessor, resulting in deadlines being missed. Here are five steps to ensure your compliance report is submitted on time.

Savvy energy managers are choosing to undertake work early with the view of benefiting from the insights ahead of the reporting deadline. Acting on the energy saving initiatives identified within your surveys ahead of the reporting deadline can help support your wider decarbonisation strategy. The initiatives identified can also help form part of your Net Zero Roadmap and for organisations also captured by the Streamline Energy and Carbon Reporting Scheme (SECR) it can form part of your energy efficiency narrative when implemented.

What’s more, your ESOS surveys will often provide the independent advice required to get board-level buy-in for energy saving initiatives.

The impact of failing to comply

ESOS is regulated by the Environment Agency (EA) for the UK. Failure to comply with ESOS reporting can result in penalties being applied, plus companies will have their names published in the public domain as part of a name and shame process. The EA has the power to impose penalties for each separate breach of the ESOS regulations. This includes:

  • Failure to notify – initial penalty up to £5,000 plus and additional daily penalty of up to £500 for each working day remaining in breach.
  • Failure to maintain records – initial penalty of up to £5,000 plus a ‘sum representing the cost to the compliance body of confirming that the responsible undertaking has compliance complied with the scheme’. The business must also take steps to solve the breach.
  • Failure to undertake an energy audit – initial penalty of up to £50,000 plus an additional daily penalty of up to £500 for each working day remaining in breach.
  • Failure to comply with an enforcement/penalty notice – an initial penalty of up to £5,000 plus an additional £500 for each working day remaining in breach.
  • False or misleading statement – up to £50,000

It is important to understand that receiving a fine, still requires compliance to be undertaken, so costs will only increase further.

Acting on survey insights might feel daunting, but we can provide investment-grade proposals and project manage initiatives on your behalf. Helping you to take advance of the saving opportunities and recoup the cost of the audit.

The future of ESOS compliance

The government is consulting on a number of changes to strengthen ESOS. Some of these changes may include requiring businesses to disclose their ESOS data publicly and carry out a net zero assessment. The outcome of this consultation is yet to be announced, but the government advises that the changes will come during the current phase (phase 3). More information will be released on this as it is announced.

Find support from a trusted partner

ESOS reporting is an opportunity for business to create long-term energy, cost and carbon savings as well as forming part of your net zero strategy. Inspired Energy have helped clients identify over £96m in savings and have a 100% pass rate on audits by the Environment Agency.

Let us help you get ahead of your ESOS phase 3 reporting today and get in touch on 01772 689250 or email hello@inspiredenergy.co.uk.