ESOS is a mandatory energy assessment scheme for organisations in the UK that meet the qualification criteria. In this article, we’ll learn more about ESOS and how it can help your business save money on their electricity bills.

The Environment Agency has launched an exciting new venture called Environmental Solutions of Staffs (ESOS). This program requires all businesses with over 100 employees to take part in annual audits by qualified assessors who will determine whether or not they need assistance with reducing their carbon footprint. The great thing about ESOS is that there are programs available to suit any size organisation – from large manufacturing facilities down to small corner shops where staff may only have one computer running 24 hours 7 days per week.

The UK Government named the regulators of this scheme as:

Environment Agency for organisations whose registered office is in England
Natural Resources Wales for organisations whose registered office is in Wales
Northern Ireland Environment Agency for organisations whose registered office is in Northern Ireland
Scottish Environment Protection Agency for organisations whose registered office is in Scotland
Secretary of State for Business, Energy and Industrial Strategy for organisations whose activities consist wholly or mainly of offshore activities

In order to identify where you could save energy through ESOS assessments, organisations qualifying for ESOS must carry out these audits every 4 years to find cost-effective measures of saving energy in the building, industrial processes and transport. These assessments will convey as an audit which is just like going through your own personal finances with someone else.

Phase 2

While phase 2 has the potential to apply to not-for-profit organisations and other non-public sector undertakings if they are large enough, it is more likely that ESOS in this case will be affecting UK large undertakings and their corporate groups.

If you met the ESOS definition of a large undertaking on 31^st December 2018, then your organisation qualifies for the second compliance period. Though all your members may not be UK-based, if at least one meets the requirements of a large undertaking in England and Wales then you qualify to take advantage of our incentives for corporate groups.

ESOS is a complex and often confusing process. If you’re close to the qualification threshold or if your company has substantially increased in size, then Energy Solutions encourage you to read this Government guidance on complying with ESOS for more information about how it works.

While it is not uncommon for public sector organisations to need to comply with ESOS standards, you can find further information about which businesses need not comply, and how, in the above link.

What qualifies as a “large undertaking” for the second period of ESOS?

A business that has a staffing of 150 people or more.

A business that has an annual turnover exceeds £44,845,000, with an annual balance sheet in a total of £38,566,700 or above.

What qualifies as a “large undertaking” for the third period of ESOS?

A business that has a staffing of 150 people or more.

A business that has an annual turnover exceeding £44million with an annual balance sheet in a total of £38million or more.

To calculate your accounts, it is encouraged that you use the Bank of England exchange rate at the close of business on the qualification date. This will ensure accuracy.

It’s important to take part in ESOS if your company is a member of the European Union and operates under certain guidelines. If you are taking on an EU-wide project, then it would be wise for all staff members with relevant knowledge or qualifications to participate.

ESOS can be a tricky topic to navigate, especially since it applies differently depending on the company. ESOS regulations require that responsibility falls upon whichever entity has its presence registered as being at the highest level within an international corporation. They also dictate who should take steps if there’s disaster relief needed – which could mean everything from helping relocate staff members to making sure all relevant buildings have been re-inspected after seismic activity subsides – but only if they haven’t already made other arrangements beforehand.

UK companies may soon be required to comply with ESOS guidelines regardless of their size, if they have any part of the company that meets these requirements, even possibly overseas.

An “establishment” and self-owned organisations

The UK Government explains that “An ‘establishment’ is a branch within the meaning of the Eleventh Company Law Directive (89/666/EEC), or a place of business that is not such a branch but where there is some degree of physical presence in the UK.”

A person is considered to be employed by an establishment if they are:

an employee
an owner or manager
a partner

To calculate the average number of employees in your business, you should:

Find the number of people employed by the company for each month of the financial year (whether for the whole month or part of it).
Add together the monthly totals.
Divide the total by the number of months in the financial year.

If a contract of service has been signed by both parties, they are considered to be an employee. Whether they are full time or part time, along with specific details of their contract including contracted hours and status, are irrelevant.

Going through an ESOS assessment, step-by-step:

You don’t need to carry out this assessment if your organisation is fully covered by ISO 50001, even if you qualify. You should however notify the Environment Agency that you are compliant with ESOS to avoid further action being taken.

If you are not fully covered by ISO 500051, you will be expected to follow through with the ESOS assessment. This assessment will help you take accounts of energy directly covered by Display Energy Certificates (DECs), Green Deal Assessments (GDAs), or ISO 50001 as stated above. These assessments will help us to find out whether or not the organisation already complies with the regulations mentioned.

The assessment is done in 5 stages,

Calculate your total energy consumption

The energy that your company or organization utilizes is essential to running the business. It’s important for you, as a manager of this entity, to be conscious about how much power it consumes and what can be done in order to reduce costs without sacrificing quality. The first step would be to read through our guide on ESOS compliance to see where we calculate emissions from all aspects of operations such as transport and buildings’ use-age (not just those used by employees).

The key thing when managing an enterprise with high levels of emission production is knowing exactly how they’re generated–a task that becomes easier if one has access to complete data sets.

Identify your areas of significant energy consumption

These areas make up at least 90% of your total energy consumption and are often found being used by assets held and activities being carried out by the business. If this is the case, it is crucial that you…

Find out whether ISO 50001, DECs or GDAs cover any of your areas of significant energy consumption.
Identify whether ESOS compliant energy audits have been, or need to be, carried out for the areas of significant energy consumption not covered by ISO 50001, DECs or GDAs.

In order to be mindful about your energy usage, there are a few different approaches you can take. One of them is the use of ISO 50001 for 90% of your total consumption with some DECs or GDAs and ESOS audits rounding it out if necessary.

3. Appoint a lead assessor

Sometimes it’s easy to forget the little details about a company. You need someone who can take on your energy audits and ESOS assessments for you, but what qualifications should they have? A qualified lead assessor will be able to carry out or oversee all of these tasks with ease if they are an employee or contractor in good standing from a professional body register approved by Ofgem (Office of Gas & Electricity Markets). You can find the approved professional body register here. You must get yourself to become a part of this list before you can be listed as a lead assessor.

4. Notify the Environmental Agency

When you have undertaken an ESOS assessment and are compliant with your obligations, be sure to submit the notification of compliance to the Environment Agency. You can submit this via their email at esos@government-agency.gov.uk, or submitting your notification of compliance here.

Keep all of your records

This is very straightforward and is simply so both yourself and ESOS have a copy of all of your details. This will help you if any mistakes are made or documents are lost by either party.