ESOS Amendment Regulations 2023: what has changed?

Extension of the compliance date applicable for Phase 3 by 6 months, to 5 June 2024, where this relates to compliance with ISO 50001 (Regulation 33), Display Energy Certificates and Green Deal Assessments (Regulation 34). The Phase 3 compliance date for all other Phase 3 obligations remains the same, set at 5 December 2023.

Under the ESOS Regulations, qualifying undertakings are entitled to apply the audit to their “significant energy consumption” and to exempt “de minimis” energy consumption from the audit. The ESOS Amendment Regulations vary the position, raising the proportion of total energy consumption to 95% from 90%. In turn, this restricts the application of the “de minimis” exemption, which only applies to 5% of total energy consumption.

Responsible undertakings are required to specify from their energy consumption, the proportions relating to an organisational purpose, i.e. transport, industrial processes, buildings and other.

Responsible undertakings are required to measure energy intensity ratio for those organisational purposes. This is calculated by reference to assets held and activities carried out.

Where total energy consumption has not been measured in kWh, it must be converted into kWh. The calculation must be based on verifiable data and based on a reasonable estimate of the amount of energy consumed in kWh.

The threshold to appoint a lead assessor is 40,000 kWh energy.

There is a new requirement for responsible undertakings to conduct site visits at sites which are considered by the undertaking to be representative of energy consumption in respect of an organisational purpose, either by assets held or activities carried on.

Record keeping requirements are enhanced. Responsible undertakings are required to keep records of the energy audit including: the 12-month period to which the energy audit relates; areas of significant energy consumption and consumption by those areas; site visits conducted and explanation of why those sites were considered representative of energy consumption during applicable period; reasons why, if verifiable data was not available for the 12-month applicable period, any other verifiable data has been used evidencing either consumption over a shorter period or a reasonable estimate of consumption over the 12 month period.

A responsible undertaking will now be required to recommend a programme for implementation of energy saving opportunities. Responsible undertakings will need to identify:

• • The organisational purpose and energy saving category to which the energy saving opportunity most closely relates.
  • Any considerations relevant to the implementation of the energy savings opportunity including obligations under Part 3 of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, and information on any schemes under which grants or public funds are available to support implementation of the opportunity.
  • The costs and benefits of implementation (both financial and non-financial).
  • An estimate of the annual reduction in energy consumption achieved as a result of implementing the energy saving opportunity.
  • The payback period for the energy saving opportunity.

The Amendment Regulations introduce a new requirement for responsible undertakings to keep a written record of the energy audit conducted by the undertaking in a formal “ESOS Report”. The ESOS Report must include, amongst other things, the following information in relation to the applicable period:

• • The participant’s total energy consumption.
  • The participant’s significant energy consumption, expressed in kWh, and the percentage it comprises of the total energy consumption.
  • Energy intensity ratios.
  • Estimate of energy savings achieved by the participant.
  • Estimates for energy consumption in relation to each organisational purpose and each energy savings category.

Participants will now need to provide an estimate of energy savings achieved by the participant during the compliance period, starting immediately after the previous compliance date and ending on the actual compliance date. The estimate must include the proportion of energy savings for each organisational purpose.