ESOS consultation released
On 6th July 2021 the Department for Business, Energy & Industrial Strategy (BEIS) launched a new consultation called ‘Strengthening the Energy Savings Opportunity Scheme (ESOS)’. This consultation focuses on proposals to improve and strengthen the Energy Savings Opportunity Scheme and increase the uptake of energy efficiency measures by participating businesses.
The Energy Savings Opportunity Scheme (ESOS) was introduced in 2014, to assist businesses in overcoming information barriers that prevent businesses from investing in energy efficiency measures - by requiring all large businesses to carry out an energy audit every 4 years and having this signed off by the Board. ESOS has resulted in estimated annual energy savings of 1.65TWh from buildings, 1.51TWh savings for industrial processes, and 0.52TWh of fuel efficiency savings across the ESOS population, and associated energy bill and emissions savings. But there is still scope to go further.
As ESOS is a scheme which was originally designed in part to implement an EU directive, there may also be opportunities that arise as a result of the UK’s exit from the EU, which enable more flexibility in tailoring ESOS to UK needs and going further than the original requirements in some regards.
Improving energy efficiency is one of the most cost-effective mechanisms for businesses to reduce their carbon emissions, whilst also reducing their energy bills. There are also many other business benefits to improving energy efficiency, such as improved working conditions for staff, improved customer experience, more efficient processes, reduced maintenance costs, and improved business image. Energy efficiency is also a key measure for the UK in meeting interim carbon budget targets, as unlike some other technologies that will be needed to drive decarbonisation in the future, energy efficiency measures are already well-established and proven methods that are cost-effective for businesses to deploy.
Government are therefore consulting on strengthening ESOS in order to increase the carbon savings and associated cost savings that can be made from participating businesses, as well as to ensure that the scheme leads to increased energy efficiency in business, which will assist the UK on its path to net zero.
The Impact Assessment for this consultation shows that between 1.0MtCO2e and 5.1MtCO2e are likely possible from the proposals set out as core options over Carbon Budget 5, with a central Net Present Value estimate of £1.0bn. The proposed measures could yield energy use savings of between 19TWh and 93TWh in the period from 2023 to 2037.
Most of the changes proposed to the ESOS Regulations are being considered for Phase 3, subject to the outcome of this consultation. This could result in the need for participants to make changes to reporting from their Phase 3 ESOS report onwards. Some options may take longer to implement or to have the necessary time for parliamentary legislation and would potentially be in place for the Phase 4 ESOS report and any future phases.
Elmhurst is currently drafting its response and we ask members to read the consultation and either provide your comments to us, or, even better, complete your own response. There is no one better placed to comment than the Elmhurst members who spend their careers analysing and improving the energy efficiency of non-domestic buildings.
To register your interest in attending a stakeholder event on the proposals set out in the ESOS consultation, please complete the form by the 12th July 2021.
The deadline for the consultation is 28th September 2021
Read the consultation document.