ESOS Guidance for Phase 3

By: Steve Atkins – Principal Consultant

The UK government has published updated guidance for companies mandated to take part in the Energy Savings Opportunity Scheme (ESOS). The long-awaited rules set out the reporting requirements for compliance and place a significant additional burden on companies. So, what has (and hasn’t changed) in the scheme?

Timescales

As previously announced, the deadline for ESOS compliance for Phase 3 of the Scheme has been extended to 5th June 2024, from its original date of 5th December 2023. However, this is only for this Phase, and future accreditation deadlines remain in line with December reporting each year.

Additional Reporting Requirements

The published guidance introduces a heightened level of detail for ESOS reports compared to previous phases, placing more burden on customers and Lead Assessors alike.
These include:

• Subtotalled energy usage information specifically concerning; buildings, transport, industrial processes; and other energy uses.
• Potential annual reductions in energy consumption in each of these areas based on the identified measures.
• The inclusion of Intensity Metrics for each of these subtotals, recording energy usage per specific units of measurement – for example, for buildings in kWh/m2, and for transport in kWh/mile travelled.
• Wherever possible, companies are being asked to report on the energy saved from Phase 2 to Phase 3 of the scheme, either against measures previously identified, or new ones introduced since Phase 2 ended.
• Identification of short-term capital investments (payback < 3yrs); long term investments (> 3yrs); training and cultural engagement opportunities; and controls improvements.

Company Disclosures

The new guidance also contains obligations on businesses to disclose the contents of their ESOS reports to all companies within their organisational structure, unless it can be demonstrated that it is forbidden to do so by law.

This is to ensure that energy savings opportunities filter down to where they can be most effective, and that good practice is shared within organisations.

Finally, the disclosure of information to the Environment Agency is also more detailed for Phase 3, containing more information about company structures, company Directors and overall impacts of measures.

What is next for Phase 4?

One of the biggest changes is to the ESOS scheme going forwards. Concerned that physical implementation of measures is failing – with companies complying in what they see as a tick-box exercise – the government has introduced two requirements to make the scheme more effective in its desired outcomes:

• Identification of recommended measures for implementation by the company.
• Annual reporting of progress against those measures and assessment of energy saved as a result. This is to be completed by 5th December each year with the first report due in December 2024.

Taken together all the above changes represent a tightening up of the scheme and place more emphasis on getting measures in place. Consultus can help with all aspects of ESOS from reporting compliance to full project implementation.