Steps to determine qualification and compliance
1. Determine if you are in scope of ESOS
ESOS applies to all undertakings that exceed certain qualification thresholds (‘large
undertakings’). It also applies to all members of a corporate group which include at least one large undertaking in the UK.
If you qualify as an ESOS participant, you must complete an ESOS Assessment of your
organisation (or group of organisations, where you are complying along with other members of your corporate group) by the compliance date.
If you are not in scope of ESOS, you are encouraged to still consider undertaking energy audits voluntarily. Energy audits form part of good energy management practice. Audits can help to identify measures that can save energy and cut costs.
2. Consider if all your energy consumption is covered by an ISO50001 Energy
If you have an ISO50001 Energy Management System (certified by an approved certification body) covering all your energy use this shall be sufficient to constitute an ESOS Assessment.
However, you will still need to notify the Environment Agency of your compliance.
To be compliant, the system must have been certified during the compliance period, and the certification must remain valid at the compliance date.
If you do not have an ISO50001 certified Energy Management System covering all your energy use, you should continue with Step 3.
3. Measure your total energy consumption
You are required to measure your total energy consumption across a 12-month period (‘the reference period’). The scope of ESOS includes energy consumed in:
• transport; and
• industrial processes.
You can measure your total energy consumption in either energy units (e.g. kWh) or energy expenditure.
To ensure you use up-to-date information reflecting your assets at time of qualification, your reference period for each phase must overlap with the qualification date for the phase (i.e. 31 December 2014, for the first phase of ESOS).
4. Determine your areas of significant energy consumption
Once you have measured your total energy consumption you can then identify your ‘areas of significant energy consumption’.
Your areas of significant energy consumption must account for at least 90% of your total energy consumption.
Within a phase, all of your areas of significant energy consumption must be covered either by an ESOS Energy Audit or by an alternative route to compliance.
You do not need to audit the remaining 10% of your total energy consumption. This energy use is referred to as de minimis energy use.
You may choose not to identify specific areas of significant energy consumption – in which case you must then audit all of your assets (i.e. your total energy consumption).
5. Consider the routes to compliance available to cover your areas of significant energy
You must conduct compliant energy auditing assessments or energy management activity in relation to all of your areas of significant energy consumption by the compliance date. There are four distinct types of qualifying assessments and management activity available to you:
• ESOS Energy Audits - These may include any energy audit work undertaken during the
compliance period under other schemes (such as activity under the Carbon Trust Standard, Logistics Carbon Reduction Scheme and Green Fleet Reviews), provided your Lead Assessor confirms this work meets the minimum standards required for ESOS
• An ISO 50001 certified Energy Management System;
• Display Energy Certificates (DECs) and accompanying advisory reports; or
• Green Deal Assessments.
To contribute to your compliance, ESOS Energy Audits, and other compliance activities, can be undertaken at any time within a compliance phase. This means that you can comply by conducting a number of staggered assessment activities at different times.
Importantly, whichever route or combination of routes to compliance you choose, you will need to cover all of your areas of significant energy consumption in each phase.
For example, if you had four areas of significant energy use that accounted for 90% of your total energy consumption and an ISO 50001 Energy Management System only covered three of these four areas, you would need to choose another route to address the fourth area of significant energy use.
Once you have considered any compliant activity already undertaken in relation to areas of significant energy consumption, you should consider which compliance activities you want to undertake in relation to the remaining areas of significant energy consumption.
6. Audit areas of significant energy consumption
ESOS Energy Audits must be carried out by, or overseen/approved by, recognised Lead
Assessors (members of professional registers approved by the Environment Agency). These
can be either in-house expert(s) or an external individual.
Other routes to compliance are subject to separate requirements to be considered valid for
ESOS purposes. Lead Assessors can review audits carried out earlier in a compliance phase in order to confirm that these meet the minimum ESOS standards.
You must also ask your Lead Assessor to review your ESOS Assessment as a whole. However, it remains your organisation’s legal responsibility to ensure that all of your areas of significant energy consumption are audited.
7. Report your ESOS compliance
You will need to make a notification to the ESOS Scheme Administrator that you have
completed an ESOS compliant assessment for your organisation. The notification must be
made to the Scheme Administrator on, or before, the compliance date of each phase. As noted above, the compliance date for the first phase is the 5th December 2015.
ESOS Scheme Administrator
The Environment Agency will be the ESOS Scheme Administrator for the United Kingdom. As such, the Environment Agency will be responsible for receiving notifications of compliance from ESOS participants, maintaining guidance on compliance and approving registers of Lead Assessors, as well as other duties.
The Environment Agency will also be the compliance body for participants in England. The Scottish Environment Protection Agency (SEPA), Natural Resources Wales (NRW) and the Northern Ireland Environment Agency (NIEA) will be the compliance bodies for participants in Scotland, Wales and Northern Ireland respectively.
The participant’s compliance body is determined by the location of its registered office or where there is no registered office its principal place of activity.
The Secretary of State, acting through the Department of Energy and Climate Change’s Energy Development Unit, will be the compliance body for participants undertaking activities wholly or mainly offshore.
The compliance bodies will be responsible for monitoring the compliance of those in scope of the scheme and will be able to issue penalties for non-compliance.