Reap the benefits of energy efficiency and reduce energy costs - ESOS Phase 3

The ESOS compliance deadline has been extended from 5 December 2023 to 5 June 2024, to ensure there is reasonable time for participants to meet the new requirements and for assessors to carry out assessments.

This may seem far away now, but it is easy for this to slip through the cracks and become a forgotten task, resulting in having to scramble to complete the requirements as the deadline fast approaches. Taking a proactive approach to your ESOS report will help you avoid penalties and reap the benefits of energy efficiency and operational changes sooner.

Qualification thresholds and extended deadline

Although the compliance deadline has been extended the qualification thresholds and the qualification deadline have not changed. ESOS still applies to all organisations and their corporate groups that were classed as large undertakings on 31 December 2022. Qualifying organisations are any UK large undertaking that either:

• Employs 250 or more people, or
• Has an annual turnover in excess of £44 million and an annual balance sheet total in excess of £38 million

Businesses that meet the qualification thresholds set out for large undertakings above (or for corporate groups, the ‘responsible undertaking’ for that group) should therefore calculate their Total Energy Consumption (TEC) across 12 consecutive months for the buildings, industrial processes, and transport they are responsible for. The TEC must include energy consumption on 31 December 2022 and enable businesses to identify the Significant Energy Consumption (SEC) that will be required to be audited.

Legislation changes

Once the new legislation comes into force, there will be a change to the de minimis exemption so that participants’ Significant Energy Consumption covers at least 95% of their Total Energy Consumption (as compared to 90% in Phase 2).

The graphic below summarises the decisions announced in the Government Response, and how they are proposed to be implemented in Phase 3 and 4, subject to Parliamentary scrutiny and timetable:

Energy efficiency becoming key priority

In light of this and with energy prices continuing to be turbulent, it is more important than ever to ensure your organisation is running as efficiently as possible. With so many operational factors to consider energy efficiency tends to slip down the agenda for many organisations. Throughout the pandemic, office buildings went unused and many organisations experienced substantial changes to business practices putting them under significant financial pressure. However, cutting energy use is now becoming a key priority across all sectors.

While ESOS is mandatory for certain organisations in the UK, complying with the scheme has broader benefits to businesses, including reducing exposure to volatile energy prices and reducing emissions.

Lower energy tariffs and free ESOS compliance

That is why via our partner, ENERGYbubble we are now offering Valpak ESOS customers a unique way of accessing significant energy savings opportunities by joining their commercial energy buying group. By grouping together your energy spend with other business customers, you can obtain energy tariffs significantly less than any other contract renewal offers, available directly from the energy suppliers or from the broker market

By combining energy management savings identified by your ESOS Lead Assessors (c 10%) plus procurement savings identified by ENERGYbubble’s sophisticated procurement model (c.15 %), you can expose around 25% of overall energy savings opportunities for your business.

By opting to take our ESOS Rebate Solution you can avoid carbon compliance costs and reduce energy expenditure. Essentially, by letting ENERGYbubble negotiate your new energy tariff your cost for achieving legal compliance with ESOS will be covered and your ESOS report will then identify further energy savings opportunities, which will in turn save even more money.

Therefore, if you are looking to reduce your energy costs, comply with ESOS, and identify further savings, then the time to act is now!

As ESOS evolves, businesses should recognise that this is an opportunity to develop an approach that goes beyond standard ESOS compliance. At Valpak, we have developed a service to fulfil all of your ESOS compliance requirements. If you would like to find out more, please do not hesitate to contact us on 03450 682 572 or email [email protected].  If you’re unsure if your business needs to comply, visit our ESOS Service page for further information.