Everything You Need to Know About ESOS Phase 3
The Energy Savings Opportunity Scheme (ESOS) is entering Phase 3 later this year. ESOS is a compulsory government scheme for businesses of a certain size that aims to create and nurture sustainability and energy efficiency across all industries
Keep reading this blog to find out more about whether your business qualifies for ESOS compliance and if it does, how to make the necessary changes to meet regulatory expectations. If you already know you need to meet ESOS standards, or just want to speak to an ESOS Lead Assessor directly, get in touch with Integral Energy today.
What is ESOS Phase 3?
ESOS is a mandatory government energy assessment scheme affecting up to 10,000 UK businesses classified as ‘large undertakings’. ESOS applies to your business if you meet either or both of the following criteria:
- You have more than 250 employees
- You have an annual turnover of more than £44m+ and a balance sheet £38m+ as of 31st December 2022.
For corporate groups, only one business under your umbrella needs to meet the criteria in order for you to qualify.
Phase 3 is the next assessment period for ESOS, so you must determine whether you qualify for the scheme by 31st December 2022.
For businesses that qualify, the final compliance date for ESOS Phase 3 is 5th December 2023.
If you qualify, then you must register your ESOS compliance with the Environment Agency on or before this date which must first be signed off by an accredited ESOS Lead Assessor.
If you’re not sure whether you qualify or your business is very close to the threshold, then take a look at the full government ESOS guidance or get in touch with Integral Energy today and we’ll help to clarify your position regarding ESOS.
What are the ESOS requirements?
The foundations of ESOS remain the same for Phase 3 as the previous two phases. However there will likely be some changes you will need to be aware of if you qualify for this phase (skip to the ‘What’s changed for Phase 3’ section to find out more).
Essentially, ESOS compliance requires qualifying businesses to:
- Identify and measure your total energy consumption for all energy classifications
- Carry out energy audits to identify and assess energy savings opportunities
- Report compliance to the Environment Agency every four years
ESOS is a significant undertaking, especially if Phase 3 is your first time qualifying for the scheme. It involves collecting, collating, and analysing significant amounts of data along with a strategic approach to auditing and energy-saving assessments.
Few organisations have the expertise or capacity in-house to tackle ESOS, so that’s where we come in. As energy consultants specialising in working with businesses to achieve both sustainability and compliance, we’re well-positioned to come into your organisation and lead the way with ESOS.
We’ve already helped several businesses like yours to ensure compliance, so save time and energy by working with an expert. So book a callback today, or keep reading to find out how ESOS is set to change for Phase 3.
What’s changed for Phase 3?
While the core purpose of ESOS stays the same, the government is set to introduce a few changes to the scope of the scheme in line with their ongoing net-zero strategy. This will also result in stricter penalties for businesses that fail to comply with the scheme.
We know that a consultation led by the Department for Business, Energy and Industrial Strategy (BEIS) in September 2021 proposed that businesses may need to expand the scope of their ESOS reports to include the following:
- Information on their net-zero strategy
- Reduction of TEC ‘De Miniminis’ level to 5%
- Extension of the ESOS audit requirement to include SME’s.
In addition to the above, the Environment Agency’s Enforcement and Sanctions Policy refers to how ESOS compliance is enforced, including the proposal for a stricter penalty scheme for businesses that fault to comply.
The specifics of both consultations are yet to be announced, but to make sure you have access to the most up-to-date information and ensure your report is filed accurately and on time, we recommend getting in touch with us.
When to start ESOS Phase 3?
While December 2023 may seem a while away, it’s not recommended to wait until the last minute to carry out the necessary work to ensure compliance within the timeframe. In fact, the Environment Agency released a notice to highlight the importance of starting your Phase 3 audit work sooner rather than later.
In our experience working with businesses to deliver earlier ESOS Phases, the demand for Lead Assessors and energy auditors becomes significantly higher the nearer we get to the compliance deadline, therefore resulting in higher costs for businesses needing to complete their reports in time.
Gathering and collating all of your energy data can be time-consuming, so the sooner you turn your attention to ESOS, the better. We do need at least 12 months of data, including 31st December 2022, in order to declare ‘total energy consumption’. However, there is still a lot of work that can be done even before Q4 2022 to make sure you’re on track to meet the ESOS Phase 3 deadline and we can use your latest SECR data to carry out your actual audits.
To beat the rush and kickstart your ESOS Phase 3 programme, get in touch with Integral Energy today.