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2021-07-09
news

ESOS consultation released

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On 6th July 2021 the Department for Business, Energy & Industrial Strategy (BEIS) launched a new consultation called ‘Strengthening the Energy Savings Opportunity Scheme (ESOS)’. This consultation focuses on proposals to improve and strengthen the Energy Savings Opportunity Scheme and increase the uptake of energy efficiency measures by participating businesses.

The Energy Savings Opportunity Scheme (ESOS) was introduced in 2014, to assist businesses in overcoming information barriers that prevent businesses from investing in energy efficiency measures – by requiring all large businesses to carry out an energy audit every 4 years and having this signed off by the Board. ESOS has resulted in estimated annual energy savings of 1.65TWh from buildings, 1.51TWh savings for industrial processes, and 0.52TWh of fuel efficiency savings across the ESOS population, and associated energy bill and emissions savings. But there is still scope to go further.

As ESOS is a scheme which was originally designed in part to implement an EU directive, there may also be opportunities that arise as a result of the UK’s exit from the EU, which enable more flexibility in tailoring ESOS to UK needs and going further than the original requirements in some regards.

Improving energy efficiency is one of the most cost-effective mechanisms for businesses to reduce their carbon emissions, whilst also reducing their energy bills. There are also many other business benefits to improving energy efficiency, such as improved working conditions for staff, improved customer experience, more efficient processes, reduced maintenance costs, and improved business image. Energy efficiency is also a key measure for the UK in meeting interim carbon budget targets, as unlike some other technologies that will be needed to drive decarbonisation in the future, energy efficiency measures are already well-established and proven methods that are cost-effective for businesses to deploy.

Government are therefore consulting on strengthening ESOS in order to increase the carbon savings and associated cost savings that can be made from participating businesses, as well as to ensure that the scheme leads to increased energy efficiency in business, which will assist the UK on its path to net zero.

The aims of the measures outlined in this consultation are:

  1. To increase the number of ESOS participants that take action to reduce energy use by raising the quality of their ESOS audit.
  2. To increase the carbon and cost savings from ESOS by increasing the number and scope of ESOS recommendations taken up by participants.
  3. To ensure that the ESOS recommendations are consistent with the UK’s net zero commitments.

 

To achieve the outlined measures the consultation provides a number of proposed changes and seeks views on how it would impact ESOS:

  • Look at how the standard and quality of ESOS audits could be improved by strengthening the requirements for audits and making them more standardised:
    • Require more standardisation of information provided in reports and auditing methods used;
    • Tighten requirements around site sampling, use of de minimis exemptions and use of energy data;
    • Include metrics that allow participants to better judge their energy performance;
    • Include more information about the performance of participants in relation to energy management and behaviour change, and how this can be improved.
  • Address further ways that the quality of ESOS reports could be improved through:
    • Ensuring that all assessors are appropriately trained and monitored so that they continue to meet the required standards;
    • Ensuring that organisations can identify when specialist assessor advice is needed and are able to find assessors with that expertise;
    • Addressing issues arising from the 4-yearly cycle of ESOS in producing peaks and troughs in the ESOS assessor market;
    • Considering how ESOS audits could be more effective in encouraging the uptake of recommendations
  • Seek views on how ESOS can address the net zero challenge through including an assessment of participating businesses’ greenhouse gas emissions in addition to their energy use, along with the potential for decarbonisation
  • Consider how public disclosure of ESOS data could increase the uptake of ESOS recommendations by participating businesses and make reporting more transparent.
  • Address how public disclosure would work with Streamlined Energy and Carbon Reporting (SECR).
  • Seek views on extending the scheme to medium-sized enterprises (MEs)
  • Look at the scope for encouraging uptake of ESOS recommendations through various means, including the possibility of mandating action, to ensure that participating businesses take up their energy efficiency recommendations.

The Impact Assessment for this consultation shows that between 1.0MtCO2e and 5.1MtCO2e are likely possible from the proposals set out as core options over Carbon Budget 5, with a central Net Present Value estimate of £1.0bn. The proposed measures could yield energy use savings of between 19TWh and 93TWh in the period from 2023 to 2037.

Most of the changes proposed to the ESOS Regulations are being considered for Phase 3, subject to the outcome of this consultation. This could result in the need for participants to make changes to reporting from their Phase 3 ESOS report onwards. Some options may take longer to implement or to have the necessary time for parliamentary legislation and would potentially be in place for the Phase 4 ESOS report and any future phases.

Elmhurst is currently drafting its response and we ask members to read the consultation and either provide your comments to us, or, even better, complete your own response. There is no one better placed to comment than the Elmhurst members who spend their careers analysing and improving the energy efficiency of non-domestic buildings.

To register your interest in attending a stakeholder event on the proposals set out in the ESOS consultation, please complete the form by the 12th July 2021.

The deadline for the consultation is 28th September 2021

Read the consultation document.

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2021-07-09
news