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Open for Business – ESOS Phase 2

Regular readers may recall that we have previously blogged a fair bit on the Energy Savings Opportunity Scheme (“ESOS”).  Phase 1 finished at the end of 2015 and we are now getting close to the end of Phase 2, as the final date for compliance is 5 December this year. See links to previous blogs for more on what ESOS is and what participants have to do.

We fully anticipate a last minute rush in Q4 of this year, just as we saw in Q4 2015, but participants that can get ahead of the curve should get better quality audits and will have plenty of time to ensure that they have complied in full, especially where careful analysis of complex corporate group and/or property ownership structures is required. Better also to implement sooner something that may actually save energy and money.

The good news for those wanting to get on with their compliance is that the Environment Agency has announced details of the new notification system for Phase 2 of ESOS and it is available for participants to use.  It replaces the existing Phase 1 notification system, which is now closed.

To make a Phase 2 notification you can now do so at https://www.gov.uk/guidance/energy-savings-opportunity-scheme-esos – and if you need to make a Phase 1 notification then you should contact the ESOS helpdesk at ESOS@environment-agency.gov.uk, who will be able to explain the process to you.

The Phase 2 notification process is, apparently, similar to the Phase 1 system, but there are two significant changes.

First, it is now possible to tell the Environment Agency that you do not qualify for ESOS using the new built-in option for this (previously you were directed to a separate system).  The visuals below summarise the qualification criteria.

And secondly, you can now upload a list of all the organisations in your participant group, either as a standard template (which is downloadable from the notification system) or in any other format you like, such as a group structure chart.

Remember, if you are a participant, the final date for compliance with ESOS Phase 2 and making your notification is 5 December 2019.  Phase 2 audits must have been carried out and compliance reports submitted by then.

A major problem in the run up to the original Phase 1 deadline (5 December 2015) was the difficulty that participants had in finding lead assessors and auditors to carry out their audits.  We therefore suggest that participants should get ahead of the crowd and start work on their audits as soon as possible.  In particular, it would be sensible to engage now with preferred auditors and lead assessors while they still have capacity to undertake the necessary work.

Qualification Criteria for ESOS

Note that:

  • a corporate group must participate as a whole if one or more of the companies in it is large enough to fall within ESOS; and
  • ESOS does not distinguish between property investors, developers, occupiers or funders, so any business that is large enough to meet the qualification criteria must participate in it.

Simon Keen
Counsel, London
E: Simon.keen@hoganlovells.com
T: +44(0)207 296 5697