ESOS – 5th December Deadline – will you be ready?

This time next year, if you haven’t reported on your organisation’s compliance with The Government’s Energy Savings Opportunity Scheme (ESOS) to the relevant body, you may be liable to pay a fixed penalty (up to £5,000) and/or an additional penalty for each day of non-compliance (£500/day up to 80 days = £40,000).

Posted on 03 December 2014.

DECC estimates that there are 9,400 enterprises that will need to comply with the Government’s Energy Savings Opportunities Scheme ESOS. These enterprises occupy up to 200,000 buildings of which some 8- 10,000 are industrial plants. Like it or not, each of these enterprises will, at the very least, need to have their energy data audited by an accredited ‘Lead Assessor’.

As of now, it is estimated that there are only 150 accredited Lead Assessors in the country and as momentum around ESOS has been slow to gather pace, there may well be a backlog of audits this time next year, with many organisations scrambling to meet the deadline. 

It is understandable that some organisations are not prioritising ESOS compliance particularly during the busy pre-Christmas period and many will not have made any provision in their current budgets. However, when you consider that many of the 9,400 enterprises affected will also require external consultancy support to prepare the data required for the audit, a skills shortage is a real possibility.  Even with the anticipated boom in applications to join the relevant accreditation bodies, demand for Lead Assessors will remain high.

This is not an ideal situation for companies who could reasonably expect the laws of supply and demand to lead to an increase the cost of their audits.  A swift decision to move forward could therefore be financially prudent, but that is not the only consideration when there is a skills shortage.

“These are interesting times for our industry” comments Jes Rutter, Managing Director of energy efficiency specialists, JRP Solutions Ltd, “Compliance with ESOS should be seen as the first step of an energy savings journey, and that first step should be a considered one.  The appointment of an energy partner of the right quality and with experience relevant to your organisation is essential.  With the projected shortage of Lead Assessors, the sooner the appointment is made, the more likely it is that you will find the right person for you, who will be able to support you in turning the opportunities identified into real energy savings.”

In addition to the fixed penalty for not reporting on compliance by the cut-off date of the 5th December 2015, the EA has a number of powers to apply fines in the following circumstances:

  • Failure to maintain adequate records carries a £5,000 fine and/or the cost of the compliance body of undertaking sufficient auditing activity to confirm that an organisation has complied with ESOS
  • Failure to undertake an ESOS assessment will lead to a discretionary penalty including a fixed monetary penalty and for the participant to take a number of steps towards compliance. The penalty under these circumstances could be a one-off fee of £50,000 and/or an additional £500 per day starting on the day after the compliance date up to 80 days namely £40,000, so a potential £90,000 penalty
  • Failure to comply with an enforcement, compliance or penalty notice will incur further fixed costs of £5,000 and/or an additional £500 per day after the date of compliance until notification is completed up to 80 days (i.e. £40,000) so a potential total fine of £45,000
  • Making a false/misleading statement will lead to a monetary penalty of £50,000

Lots of very good reasons to act swiftly and to choose the right partner!