ESOS 3, are changes on the way?

A government consultation is underway to seek views on proposals to improve and strengthen the Energy Savings Opportunity Scheme1 (ESOS) and increase the uptake of energy efficiency measures by participating businesses.

ESOS is one of the major existing policies that seeks to improve business energy efficiency through providing participating businesses with trusted, high-quality information about potential energy savings they can make. Acting on these energy efficiency recommendations provides participating businesses with the opportunity to reduce energy consumption and costs, as well as contribute to the UK’s net zero policy.

The specific aims of improving the scheme are:

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

The consultation is due to close on 28.09.2021. A link to full details of the government consultation can be found here

Potential changes which could impact you and your business;

Whilst ESOS has been effective in tackling the barriers of awareness and information, there remain barriers to organisations taking up energy efficiency measures, including economic barriers, internal organisational barriers and behavioural barriers.

Possible opportunities identified to address some of these barriers to further uptake of ESOS measures are:

• Reframing the scheme’s requirements and improving quality of audits to encourage more take up of measures.
• Addressing the cyclical nature of four-yearly audit cycles to improve levels of sustained activity between audits.
• Delivering on potential synergies with other schemes (Net Zero and SECR).
• Requiring public disclosure of ESOS recommendations and/or action.
• Changing the scope of organisations required to carry out energy audits.
• Mandating implementation of ESOS recommendations

Widening the participation of ESOS

In the effort to meet Net Zero targets and reduce greenhouse has emissions all UK businesses have a part to play.

Currently, the ESOS scheme only applies to large businesses and their corporate groups, meaning Small and Medium-Sized Enterprises (SMEs) are only subject to ESOS if they are part of a corporate group with a large corporation. However, large businesses only account for 44% of business energy use and so excluding SMEs from ESOS also excludes a high proportion of total UK business energy use from the scheme.

As part of the consultation, the government are seeking views on the below;

• Extending ESOS to all medium sized businesses
• Extending ESOS to Medium-Sized Enterprises with high energy consumption, using an energy consumption threshold below which MEs would not be required to participate.
• Extending ESOS to all industrial Medium-Sized Enterprises.

Rather than speculate on the potential final decisions from the consultation we will in due course advise of the changes and how they will impact different UK companies.

For more information on ESOS, SECR and Net Zero please contact hello@gleg.co.uk.