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ESOS: A year in review

This time last year, businesses were frantically compiling their energy reports to submit in time for the extended ESOS deadline. 2016 has been a year of completion, compliance enforcement, and confusion about the future of the scheme. Here we take a look at the progress that has been made this year and what the future looks like for energy compliance legislation.

Clamping down on compliance

Despite the compliance deadline being extended to 15th April 2016, around 40% of businesses covered by ESOS still failed to submit their compliance documents on time. Of the 10,000 businesses that qualify for ESOS, around 3,000 were yet to comply as late as September.

The Environment Agency (EA) weren’t letting these businesses slip under the radar. They set up a dedicated ESOS Enforcement team to ensure that all businesses meet their obligations; with a fixed penalty of up to £5,000 for non-compliance and an additional £500 per working day up to a maximum of 80 working days, failure to comply could be costly. If your business needs help to ensure that it is meeting ESOS requirements, we’re here for you – contact us today.

The case for businesses acting on ESOS recommendations has become even clearer in 2016, with the cost of business energy forecast to rise even further in the coming years. Government estimations predict that organisations that implement energy efficiency recommendations and invest £15,000 per year in energy efficiency measures could see cost savings of around £56,400 per year. The Carbon Trust has also reported that large businesses are able to save 15% on their energy bills by becoming more efficient.

2017: ESOS or ISO 50001?

In the Spring budget, businesses were told that a single reporting framework would merge and replace the multiple compliance schemes that are currently in place, including ESOS. However since this was announced the government has given no further information on how it will work, or when they expect it to come into place – something that has caused confusion among businesses.

When businesses voiced their uncertainty around the single reporting framework and the future of energy in general, Inenco wrote an open letter to the Department for Business, Energy & Industrial Strategy (BEIS) asking for clarification. Until they provide more insight into their plans, businesses should continue to work on the recommendations that came out of the first round of audits.

Savvy businesses could even start to implement ISO 50001, which is the international standard for energy management systems. The standard outlines the best way for businesses to achieve energy efficiency, helping them to improve their overall energy performance and meet environmental and carbon reduction targets. It also provides automatic compliance with ESOS. However, it’s likely to require considerable investment of money, time and resources to implement ISO 50001 – by starting now, businesses should find that they’re well prepared for future legislative changes.