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Larger businesses need to prepare their ESOS 2 energy audit report

21 August 2019

The second phase of the government’s mandatory Energy Savings Opportunity Scheme (ESOS) requires larger ‘qualifying’ organisations (around £35 million turnover plus) to notify the Environment Agency of their energy audit findings by 5 December 2019.

ESOS requires larger businesses (those with more than 250 staff or a turnover above €50m (around £40 million) and an annual balance sheet total over €43m (around £35m) to audit their energy use every four years and review the scope for taking energy-related measures.

These can range from low- to no-cost measures (or even revenue) to longer-term investments. Potential energy and cost savings must be calculated for each measure proposed, before the report is signed off by top management.

Other ways to achieve ESOS 2 compliance are available, such as achieving the ISO 50001 management system certification.

If a qualifying company fails to meet the ESOS requirements, it may incur a penalty of up to £50,000, plus £500 per working day until the breach is remedied, up to a maximum of 80 days.

Although ESOS is part of the UK’s implementation of the EU Energy Efficiency Directive, there is no obvious indication that leaving the EU (should this occur) will affect the need for ESOS compliance this year.

ESOS phase 2 follows the recent introduction of mandatory carbon reporting for larger businesses, which was introduced for financial years beginning in April 2019.

More information on ESOS 2 is at: www.gov.uk/guidance/energy-savings-opportunity-scheme-esos

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