ESOS Phase 2 - Summary of Updates 3

The Environment Agency (EA) issued their newsletters 1 and 2 for 2019 in February.  In issue 1, it was announced, a new notification system for Phase 2 will be available together with some key clarifications.  Issue 2, also published in February, provided further information and details on the notification system.

Issue 1 – February 2019

Version 6 of the ESOS guidance has now been published providing  updated guidance to reflect timings for the second compliance period (Phase 2) and additional clarification on the definitions of large undertakings, exemplified organisations and how to calculate energy values;

• Total Energy Consumption – Explanation offered on calculation and qualified as all the ‘input’ energy an organisation uses, including but not limited to buildings, industrial process and transport. Energy is required to be reported in a consistent unit such as kWh or pounds sterling, but CO2 is not an energy unit for the avoidance of doubt.

• Significant Energy Consumption – Once Total Energy Consumption has been calculated, an organisation must identify assets and activities that amount to at least 90% of the Total Energy Consumption. These are the areas of Significant Energy Consumption requiring audit covered by alternative routes to compliance. The Environment Agency indicates that energy chosen from an organisations large undertakings, should be audited and select smaller energy supplies or undertakings as the 10% de minimis.

• Low Energy Users – Some organisations qualifying for ESOS may fall under the category of a low energy user – less than or equal to 40,000kWhs (use at domestic levels or lower). These organisations do not need to:
  • Produce or evidence a fully compliant energy audit or alternative route to compliance
  • Complete a Lead Assessor review

They will however need to:

• • Retain documentary evidence that they have considered opportunities to reduce energy use
  • A Director will need to sign off the report and confirm they are a low energy user
  • Notify the EA by the compliance deadline and confirm that they are a low energy user via the notification portal
  • Ensure they retain an evidence pack for their compliance

• Zero Energy Users – Even an organisation exceeding the financial thresholds but with no physical assets or employees using energy have obligations, such as getting a Board Director to confirm that they have no energy responsibility and make a notification to the EA via the notification portal.

• Phase 1 Compliance Audits – The EA will continue to undertake compliance audits for Phase 1 from the 7,000 plus participants. Organisations that were participants under Phase 1 should ensure that their evidence pack is accessible. Following the audit, there may be further actions to ensure that previous audits meet with the legal standard. If an organisation is selected for a Phase 1 audit but is nearing the end of their Phase 2 ESOS assessment, they should advise the EA because it may be possible for them to audit Phase 2 rather than Phase 1.