Robert Dadzie, Lead Energy Assessor at Lucion Group discusses the key changes to Phase 3 of the ESOS Energy audit scheme.

Context

The Energy Savings Opportunity Scheme (ESOS) 2014 Regulations mandate large UK companies to undergo a compulsory assessment. Eligible businesses must submit a compliance declaration to the Environment Agency by the 5th of June 2024.

ESOS Process

The ESOS Phase 3 energy audit process serves as a vital tool to help large organisations in the UK identify and capitalise on opportunities to improve energy efficiency, reduce carbon emissions and enhance sustainability across their operations. It involves the following key steps:

1) Appoint Lead Energy Assessor;

2) Determine Compliance Responsibilities;

3) Calculate Total Energy Consumption (TEC) and intensity;

4) Audit energy intensive processes, buildings and transport;

5) Determine opportunities for energy savings;

6) Submit notification to the Environment Agency;

7) Complete ESOS Action Plan; and

8) Provide annual progress updates.

Key Changes to Phase 3

Following a consultation ending in July 2021, the Department for Business, Energy and Industrial Strategy (BEIS) published key changes to ESOS. These revisions aim to strengthen regulations, prompting increased action by participating companies. Notably, participants are encouraged to enhance audit quality and align recommendations with the UK's net zero commitment, focusing on carbon and cost savings.

Several changes have been introduced as part of ESOS Phase 3. The most significant are summarised below:

• Deadline for registration and compliance notification extended to 5^th June 2024;

• De-minimis rule reduction to 5%, requiring coverage of 95% of Total Energy Consumption (TEC);

• Inclusion of an energy intensity metric;

• Public disclosure of ESOS targets and progress;

• Mandatory sharing of ESOS reports with subsidiaries; and

• Submission of an ESOS action plan by 5^th December 2024.

ESOS Action Plan – What you need to know

An action plan for future energy saving measures must be signed off by Board and submitted by participants by 5^th December 2024. This must cover operations from the 6^th of December 2023 to the 5^th of December 2027.

Two annual progress reports are also necessary and must be submitted by the 5^th of December 2025 and then again, the following year. These will need to provide updates against the action plan and must outline the following:

• The energy saving actions undertaken within the period; and

• The estimated savings achieved from the completed actions.

Participants must submit action plans and progress reports even if no interventions are intended. Failing to do so will result in a published statement by the Environment Agency that the business does not intend to undertake any energy saving actions.

ESOS Action Plan – Implementation

The ESOS action plan outlines how participants intend to improve energy efficiency and carbon emissions. It sets out an implementation strategy for businesses and helps to ensure that the ambition for sustainability is integrated into long-term corporate objectives.

Leveraging our expertise in energy management, Lucion Group aims to add value to your energy action plan through the following interventions:

1) Policy Review and Stakeholder Engagement:
• Develop an energy policy to secure immediate buy-in and commitment from senior executives and decision-makers; and

• Define roles and responsibilities across key department leaders.




2) Performance Evaluation:

• Conduct a comprehensive gap analysis to pinpoint opportunities for enhanced energy management performance.




3) Business Case Development:

• Identify the financial returns associated with energy-saving interventions and prioritise actions within your plan; and

• Evaluate available investment and funding opportunities to support these initiatives.




4) Integration with Corporate Strategy

• Ensure alignment of actions within the plan with the corporate Net Zero strategy and broader business objective.




5) Communicate your strategy

• Submit annual progress reports and monitor delivery through robust governance; and

• Report against key performance indicators to track effectiveness of implemented measures.

Progress monitoring and reporting

Progress reports are an indispensable instrument which adds value to any energy action plan. They provide an effective way to track and measure energy efficiency performance, which allows businesses to communicate their sustainability objectives with clarity and purpose.

On-going monitoring and reporting enables informed decision making by encouraging ESOS participants to set Key Performance Indicators (KPIs). This helps to normalise Total Energy Consumption for the business against relevant indicators such as floor area, employee headcount or turnover. KPIs can then be used to support benchmark assessments, allowing participants to compare their own performance against industry standards.

Effective progress reports are integral to the ESOS action plan. They provide the necessary insights to drive positive behavioural change. In adopting a transparent approach to reporting, businesses can confidently navigate their energy efficiency journey.

For further support with your ESOS Action Plan, get in touch with Lucion Group through our website https://luciongroup.com

Alternatively, you can email our Lead Energy Assessor at info@luciongroup.com

Lucion is a purpose-driven company committed to safeguarding both people and the environment. Our core services include:

• EHS & Sustainability;

• Hazardous Materials Services;

• Geospatial Mapping;

• Ground Risk & Engineering;

• Transactional Services; and Environmental Planning