Changes to ESOS Phase 3 – What you need to know

Changes to Phase 3 of ESOS have been introduced by BEIS which will affect how businesses comply with the scheme, aimed at improving how energy savings are identified and implemented.

The UK Government has announced important changes to the Energy Savings Opportunities Scheme (ESOS), which will change how businesses will be required to comply with Phase 3, along with planned changes for Phase 4. These changes are driven by the desire to make the scheme work for UK businesses, by motivating them to deliver energy savings on their sites.

What’s changing, and what does this mean for your business?

The quality of site audits will be improved by the introduction of more standardisation of reporting requirements. Therefore it’s essential that you work with Lead Assessors you trust to make this work in your specific case, with a proven track record of compliance and understanding of how the scheme works in your sector.

Actions taken since your Phase 2 ESOS audit should be detailed. More information about how your business intends to implement recommendations from Phase 3 will be needed, including an action plan which you will need to report against for Phase 4.

The limit for exemption from reporting (known as de minimis) for your sites will reduce from 10% to 5%. This will force some smaller sites into the audit process and should uncover new opportunities to make savings.

ESOS reports will need to include a record of energy intensity, which will vary by site type. Extra data about your sites will need collecting to comply with Phase 3, including a requirement to collect information about fuels and predicted savings, including those identified in previous Phases.

Looking forward to Phase 4

There will be a tighter focus on rating and improving energy management processes. Qualification may also be aligned more closely with another major UK scheme, SECR. The scope of the scheme might also be extended to include smaller businesses.

A greater focus on Net Zero will be introduced, helping businesses to align their compliance with a push towards decarbonising their operations.

What should your business do next?

It’s important that you engage with a Lead Assessor early to be sure that your business is working with the right experts. The later you leave compliance, the higher the risk of failure. On the other hand, early engagement means that your business will be identifying savings as early as possible, enabling your compliance to pay for itself.

Russ Monkman, Senior Energy & Carbon Consultant at Envantage, said:

“This announcement from BEIS includes some changes to ESOS Phase 3 to make the scheme work for business, by making them more accountable for delivering the savings identified. This is a good thing for UK business and for energy savings as a whole, but it’s also a move away from ESOS being seen as a tick-box compliance exercise. It’s important that businesses work with people they can trust to find savings and work together on implementing them, if the scheme is really going to work for them.”

To talk about the right approach for your business, talk to one of our experts.

Categories

• Compliance

Tags

• Carbon reduction
• Regulatory & Reporting

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