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An Introduction to ESOS – Phase 2 vs Phase 3

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an introduction to esos – phase 2 vs phase 3

As a UK business, it’s important you stay compliant with any relevant regulations to avoid any unexpected disruption and costs further down the line. One such regulation is the Energy Saving Opportunity Scheme – or ESOS for short.

But what exactly does this scheme entail? Which businesses does it apply to? And what’s the difference between ESOS phase 1, phase 2 and phase 3? Read on as we provide all the answers…

What is ESOS?

Introduced in 2014, ESOS is a mandatory regulation for UK businesses of a certain size. Put simply, it aims to ensure businesses are reducing their energy output wherever possible.

That’s done with a mandatory initial assessment and ongoing reviews every four years. The assessment includes:

  • Calculating your total energy consumption – used by assets held or activities carried out by your company
  • Identifying areas of significant energy consumption – anything that accounts for at least 90% of total energy consumption
  • Appointing a lead assessor – internally or externally, as long as they are members of an approved ESOS register
  • Notifying the Environment Agency of your assessment and compliance
  • Keeping records of everything you’ve done to comply with ESOS regulations

ESOS phases 1, 2 and 3

As touched upon above, ESOS assessments are required every four years for participating businesses. This is where the ESOS phases come into play. Rather than simply being four years since your most recent audit, ESOS has set compliance phases which companies must abide by.

ESOS phase 1 began in December 2015, running until December 2019. ESOS phase 2 begins in December 2019 until December 2023. Then ESOS phase 3 runs from December 2023 to December 2027.

Each ESOS phase comes with a qualification date. For ESOS phase 2, it was 31st December 2018, while the qualification date for ESOS phase 3 will be 31st December 2022. This is the date on which businesses must determine whether or not they are eligible.

Does ESOS apply to my business?

ESOS applies to businesses which meet the ESOS definition of a ‘large undertaking’. In short, this means you meet either of the two following criteria:

  • The business employs 250 or more people
  • The business has an annual turnover in excess of £44 million, and an annual balance sheet total in excess of £38 million

It’s worth noting that the criteria for phase 2 were slightly different, as they were based on European currency. The annual turnover threshold was €50 million (£44,845,000), while the annual balance sheet threshold was €43 million (£38,566,700).

Preparing for ESOS phase 3

The deadline for ESOS phase 2 passed in December 2019, meaning eligible businesses should have already met their ESOS obligations. The next step is the qualification date for phase 3, on 31st December 2022.

If you’re looking for any assistance with ESOS or reducing your energy output in general, speak to Volta Compliance. We can provide a full energy audit, recording and assessing your consumption, along with a strategy to reduce your energy output including specific recommendations. We even install clean technologies like LED lighting, EV charging infrastructure, controls, and energy monitoring solutions in line with our electrical contracting services helping you come full circle on your energy obligations ESOS and SECR, fulfilling your strategy and implementing the strategy.

In short we will report, plan, implement, comply, help the environment, and save you money in the long run. Call us on 0113 397 1361 or request a quote online.

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Richard Carr Volta Compliance
Richard Carr
Managing Director
Richard is the Director of Volta Compliance. He is a fully qualified approved electrician graded with the JIB. Richard has over 20 years electrical experience working on commercial and industrial installations.