Retail sector needs clarity over ESOS fines during pandemic, says Advantage Utilities

Advantage Utilities, a business energy and commercial utilities consultancy, is calling upon the Environment Agency (EA) to clarify its intended actions for enforcing the Energy Savings Opportunities Scheme (ESOS) following an influx of calls from businesses receiving enforcement notices in the midst of the pandemic. 

The mandatory energy assessment scheme applies to large UK enterprises, requiring businesses to submit an energy audit to the EA every four years. With the deadline for Phase 2 having passed in December 2019, those failing to comply now face penalties of up to £50,000 as well as an additional £500 per day if the breach is not remedied. The uncertainty surrounding the penalties will create extra strain for businesses trying to survive a second lockdown. 

ESOS was introduced in December 2014 in response to the EU Energy Efficiency Directive. The scheme, split into four phases, is designed to allow companies to identify flexible and cost-effective opportunities to improve their energy efficiency. Whilst no fines have been issued yet, there is great concern surrounding the financial burden this poses to businesses, especially during a time of economic crisis.

Andrew Grover, CEO of Advantage Utilities says: “There’s a lot to be gained from the ESOS scheme as it puts the UK in good stead for reaching its net zero targets and many companies actually stand to make long-term savings. However, a lot has changed since the deadline passed in December 2019. We are facing a very turbulent time here in the UK with many businesses operating with limited staff and cashflow. The last thing businesses need is more uncertainty and worry.” 

On average, organisations incurred £6,150 in additional external expenses in relation to the compliance of Phase 1. Around 1,500 companies failed to comply during the first phase and 300 enforcement notices were issued – with companies such as eBay and Gumtree among those fined over the two years following the deadline. 

Grover adds: “We’ve seen large organisations with ample resources miss the deadline in Phase 1, it’s unsurprising that smaller businesses may be unclear or even unaware of the scheme in Phase 2.”

As England enters a second lockdown, businesses could stand to benefit from reviewing their utilities to support their bottom line. ESOS and other incoming initiatives, such as Streamlined Energy and Carbon Reporting (SECR) intend to identify these opportunities whilst supporting companies on their way to a net zero UK.

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