If you have not already heard, EU legislation will be requiring ‘large enterprises’ with over 250 staff or a turnover of £40m and above and a balance sheet of £34m, to comply with undertaking energy usage audits. However, the Public Sector is not required to participate. ESOS requires each business to undertake a formal energy audit every 4 years, the first being by December 2015 and in advance of this companies need to have registered with the Environment Agency by end of December 2014. Those not registered and failing to comply with ESOS could face penalties of up to £50,000, and an additional £500 per day thereafter.

What ESOS includes

The ESOS audit will not only be on energy used throughout the company building and manufacturing processes, but also covers company cars (including grey fleet), vans, and trucks. Travel by public transport or commuting to work will be excluded. The UK Government have brought in this drive in order to meet the European Union’s Energy Efficiency Directive and to reduce C02 emissions and improve air quality.

The aim, cost and savings from ESOS

The audit is expected to quantify energy consumption and look to make recommendations on where savings can be made with costs estimated and benefits quantified. Surprisingly companies will not be required to implement the recommendations but the opportunity for identified energy savings will also come hand in hand with cost savings for the business which will far outweigh the cost of the audit so may are thought to end up taking these recommendations on board.

For fleets in particular, sustainability comes hand in hand with fleet insurance savings. The audits are thought by the Department of Energy and Climate Change (DECC) to cost in the region of £17,000 for the first audit and £10,000 each thereafter, substantiating a case for businesses to recruit a dedicated energy manager. The DECC currently estimates that each business could save an average of £56,400 per year following the audit investment cost.