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What can businesses learn from ESOS Phase 1?

The first phase of ESOS presented a new challenge for many businesses, as they gathered data, identified energy savings opportunities and reported to the Environment Agency (EA) for the first time.

Now that we’re into the second phase, it’s time to do it all again, so we’re looking back at what’s happened since ESOS Phase 1 to see what businesses can do to make the process easier this time around.

What’s happened since Phase 1?

The ESOS Phase 1 deadline passed on 5th December 2015, but that doesn’t mean that every eligible business was compliant at that point. Around 2,800 organisations had to inform the EA that they would be late in reporting compliance, resulting in 50 Enforcement Notices being sent to those that didn’t work with the EA to resolve their late compliance within a timely manner.

Among the 1,000 organisations that stated that they didn’t qualify for ESOS, the EA has identified a number of companies that have incorrectly assessed themselves as ineligible, and they have subsequently served Enforcement Notices to these organisations. They have also sent out over 300 Enforcement Notifications to those that didn’t engage with ESOS Phase 1, despite being eligible. By December 2017, the EA had gained around 240 additional participants after serving them with an Enforcement Notice.

Even those that successfully submitted their ESOS reports on time have needed to carry out further work since the deadline. Three quarters of audited companies were required to undertake remedial actions in order to achieve compliance – just 16% of businesses were fully compliant!

Key takeaways for Phase 2

Clearly, many businesses made mistakes in Phase 1 – mistakes that not only required them to dedicate more time and resources to carrying out remedial actions, but also meant that they faced fines of up to £50,000 for failure to comply.

With this in mind, here are some key takeaways from Phase 1 that businesses should be aware of when working through Phase 2:

  • Take action early

The deadline for ESOS Phase 2 is 5th December 2019, so businesses should be taking action now to ensure that they’re compliant in time. Businesses must provide at least one year’s energy measurement, and Phase 2 audits must include the qualification date of 31st December 2018, so those that aren’t already collecting their energy data will need to start doing so shortly.

  • Utilise the EA’s advice

After Phase 1 ended, the EA advised businesses of the key areas that participants should aim to improve on in their future ESOS assessments. They made a wide range of recommendations, from improving the structure of evidence packs and ranking energy savings opportunities to carrying out a life cycle cost analysis on energy savings rather than simple pay back analysis. You can see the full list here.

  • Outsource for hassle-free compliance

The fact that only 16% of eligible organisations were fully compliant with ESOS Phase 1 (without any remedial actions required) shows how complex it can be for businesses to ensure that their ESOS reports are compliant. Working with external experts can not only relieve the administrative burden from in-house teams, but it can also give businesses the peace of mind they need to know that they will achieve full compliance.

Inenco’s compliance team achieved a 100% Environmental Agency audit compliance rate for the over 320 organisations they worked with in ESOS Phase 1. To find out more about how Inenco could help your business to achieve ESOS compliance in Phase 2, click here.