ESOS – Beyond Compliance

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Published: 20 January 2016


Consultants BJA are reminding businesses that they have to be Energy Savings Opportunity Scheme (ESOS) compliant by 29th January 2016. ESOS means that companies have to audit their energy usage. 
BJA Refrigeration Consultants carrying out an ESOS audit
BJA Refrigeration Consultants carrying out an ESOS audit
Around 3,000 UK businesses have not told the Environment Agency (EA) that they intend to follow the ESOS legislation. If an organisation meets the qualification criteria but fails to follow the legislation, it could face a fine of up to £90,000.

​After the deadline, companies that have failed to notify the EA will see enforcement action begin. To encourage businesses, the EA recently sent out informal warnings to organisations that have not advised them they were ESOS compliant. That meant around one third of all businesses eligible for the mandatory scheme received the warning.
About 4,000 businesses submitted their final ESOS report by the original deadline of 5 December deadline. A further 2,500 had notified the Environment Agency of their intent to comply.

Although the legal deadline for compliance remains 5th December 2015, companies will not face enforcement action if they notify the EA of compliance before 29 January 2016. The Agency is also offering a three month derogation, after enforcement notices are sent out, before any civil action will occur.

ESOS Audit

​ESOS energy audits of buildings have a specific route that is allowable. The appointed lead assessor (Registered on the Approved Professional Body ESOS Register) has the responsibility to assess any existing energy audits.  This covers the organisation's portfolio of buildings that contribute to the “Significant” energy use. These audits have to relate to the reference period and they have to be ESOS Compliant Energy Audits.

For many users of refrigeration equipment, the energy consumed by their refrigeration plant is often one of their largest consumers.  This can account for anywhere between 25% and 60% for food production facilities. For cold storage, it can be towards to 85%. To identify the true opportunities for energy savings, companies should use specialist independent experts, in both refrigeration and energy efficiency, to carry out the energy audits.

What is ESOS?

The ESOS Regulations 2014 bring into force Article 8 of the EU Energy Efficiency Directive and mandate that all large businesses in the UK undertake comprehensive assessments of energy use and energy efficiency opportunities at least once every four years.

The deadline for the first compliance period is 29th January 2016, by which time qualifying businesses will have to achieve compliance with the regulations and notify the Environment Agency.

The criteria for inclusion to ESOS is not straightforward, but it applies to any 'large undertaking' that carries out a trade or a business, and any corporate group where at least one member of the UK group meets the ESOS criteria.

A large undertaking is one that employs at least 250 people or has an annual turnover over £40 million and a balance sheet more than £34 million. Most public sector bodies are excluded, but some, such as many Universities may qualify.

TM44 Air Conditioning Inspections and ESOS

Since 4th January 2011, all organisations in England and Wales with air-conditioning systems over 12kW, have to carry out an independent energy inspection of their units. (See Article 9 of the Energy Performance of Buildings (Certificates and Inspections) Regulations 2007).

TM44 Air Conditioning Inspections and certification are still a mandatory. But, they will not on their own meet the ESOS rule as they only cover comfort cooling air conditioning and exclude other areas of the organisation’s energy usage, such as process cooling.

Therefore, TM44 does not in itself make an organisation ESOS compliant. Yet, the report produced by a TM44 audit could and should influence the Energy Saving Opportunities database. Energy savings already identified in the TM44 report would be incorporated if the Lead assessor approves their inclusion in to the ESOS report.

So TM44 Air Conditioning inspections remain important to meet legal obligations and also help with ESOS.
BJA is working with leading retail, commercial and industrial organisations to meet their legal obligations and identify inefficient units to reduce energy consumption.
ion.

Beyond compliance

Only complying with the Regulations misses the point of ESOS. Use ESOS to identify opportunities to reduce energy use and to cut consumption, emissions and cost.

Whilst there is no statutory need to take action on these opportunities, not to do so is to reduce ESOS to a costly compliance exercise rather than a means to achieve real savings.

Opportunity?

There will be some that approach ESOS as a 'box ticking exercise'. For them this will not be an opportunity gained, but an opportunity lost. There are real proven business benefits for organisations in reducing the amount they spend on energy.

Refrigeration and air conditioning plant users often waste around 20% of their annual energy costs by using inefficient equipment.

An ESOS audit will identify this equipment.  BJA’s expert knowledge and tailored services make the implementation of energy reduction projects easy and cost effective.
Refrigeration and air conditioning plant users often waste around 20% of their annual energy costs by using inefficient equipment.

​Looking beyond the low-hanging fruit

It’s no surprise that low-cost/no-cost energy efficiency measures tend to get the most uptake. But, it is a misconception that only the low-hanging fruit is worth harvesting. On the contrary, it’s estimated that so-called ‘investment’ measures (those involving slightly longer payback periods) can unlock typical energy savings of 15%. That is 15% on top of that saved by low-hanging fruit upgrades.

The landscape of energy-saving technologies is evolving so rapidly that many solutions that were once thought of as longer-term investments are now becoming low-hanging fruit. Prices are coming down, payback periods are improving – all of which makes it worthwhile to look beyond the obvious and to make sensible, well informed decisions when it comes to investment projects.

Making well-informed investments

The time and money currently invested to achieve ESOS compliance is unvoidable unless one wishes to risk facing a fine. Implementing and maximising the energy savings opportunities identified, and to take full advantage of the ESOS opportunity is the most effective way to ‘offset’ the cost of the ESOS audit.

This will involve making upgrades, installing new equipment, improving procurement, etc,. BJA has specialist project managers in the cooling and energy efficiency sector, and can manage this process for the end-user.

BJA advises companies not to look at ESOS as a pointless box-ticking exercise. Instead, BJA encourage them use it as a chance to improve their energy strategy, to reduce energy waste, and to uncover the next layer of energy savings.

BJA Refrigeration Consulting Engineers are specialist independent refrigeration consultants who work with many of the UK’s leading food processing, storage, retail and distribution companies to ensure that their clients enjoy the most energy efficient, reliable, and innovative solutions. They provide specialist ESOS energy audits, and also undertake TM44 Air Conditioning inspections. With a long background in project management, they are well placed to advise of energy saving investments for cooling equipment and to manage the implementation process from start to finish.
Chris Williams, Director