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How your organisation should prepare for ESOS Phase 2

The Environment Agency (EA) sent out a newsletter noting that ESOS Phase Two is starting. ESOS (the Energy Saving Opportunity Scheme) is a piece of legislation requiring large organisations to take action on energy use. The first phase finished in a flurry in late 2015, and the next phase is due to finish in late 2019. Participating organisations have to assess company energy usage and find opportunities for making savings – and then report back to the EA.


Although most companies have taken a pro-active approach and complied within the time frame, there have been a few who have not – and are in breach of the legislation.  The EA have been following up on these recently and have started to threaten fines (of up to £50,000), and in fact I had an enquiry from a potential client just last week to help them to take action to avoid a fine. 

Assuming that you’ve not just been threatened with a big fine, what do you need to do? 

1. Work out if you need to take part – if you’re bigger than an SME then the chances are that you do indeed need to take part. More detailed guidance here

2. Make sure you are recording all the data that you should be – this includes all the energy used in each of your premises (electricity, gas, LPG etc.).  This needs to include both building energy use and process energy use, for industrial operations.  You also need to be recording transport energy use.

3. Work out your compliance plan – generally this is going to be a series of energy audits for your sites and transport, or getting certified to ISO50001 (the ISO standard for energy management). 

4. Assign a Lead Assessor (this applies mainly for the energy audit approach).  A Lead Assessor is a qualified assessor who can sign off on your approach to compliance, and should be able to carry out all the work required to get you over the line. 

Once you have a Lead Assessor they will be able to give you more detailed guidance on the best plan of action, and steer you through the process to compliance. 

The main benefit of the process is helping you to save energy, and cut costs and emissions.  Having done a huge range of these audits for clients in all fields, from heavy industry to retail, each audit should be able to find at least 5% savings for site energy costs, and generally closer to 15%.

Implementing those projects is how you can make the energy, cost and emission savings, helping to make your business more productive and competitive.  Implementation has historically been more challenging, so it would be beneficial to think now about how you can take these opportunities and make them real – whether in terms of policy changes, securing budget for the investment, or working with trusted partners to bring in outside expertise and funding. 

Those are savings that will quickly pay back the cost of the audit, and lead to ongoing benefits.  Often there are going to be additional bonuses too – improved working environment, increased production rates, more reliable building services.  Of course your sustainability credibility will be boosted in the process – and that is something that we are seeing as increasingly important for our clients.

Paddy Pope is a Chartered Energy Manager & ESOS Lead Assessor with WSP