The Environment Agency remains committed to enforcing Esos despite growing consensus that it will have to extend the deadline for compliance and may lack the necessary enforcement budget.
As of 25 August, the Agency confirmed that 152 companies had notified it of full Energy Savings Obligation Scheme (Esos) compliance. That figure is up from 32 companies at the end of May.
The current run rate suggests that the vast majority of companies will struggle to comply by 5 December, even with the anticipated late surge. The Agency has sent reminder notices to 14,000 businesses.
Failure to comply could result in fines of up to £50,000. But business leaders now question whether the Agency will be able to enforce the scheme.
Head of the Energy Managers Association (EMA), Lord Redesdale, suggested it was questionable whether the Environment Agency “actually has a budget for enforcing it”. However, he said companies that did not conduct the audit and act upon on its findings would only be wasting their own profits. The EMA has trained more than 80 Esos assessors to date. Redesdale added that if a late surge materialises “capacity and quality issues” would arise from an assessment perspective.
EA ‘will enforce’
The EA said it remains committed to enforcement and will publish enforcement guidance in October. It will “in due course” publish a list of organisations that have complied, according to a spokesman.
However, businesses that have at least made an effort to complete the process should be spared fines, according to Utilitywise. The company suggests a six month extension.
“We are concerned about the pace at which things are going in the run up to the deadline,” said head of energy markets Jon Ferris. “We don’t believe it will be [sufficient] to effectively complete the requirements of Esos.”
Ferris said the Environment Agency was “right to threaten enforcement” right up to the deadline, but suspects it will then admit it is not possible to enforce “because too many businesses have not complied and a lack of lead assessors”.
“It is a difficult position [for the Agency] to be in, given that it is an EU requirement to meet the deadline,” Ferris added. “However, we believe it would be more effective if it were to extend the deadline and allow more businesses to undertake the Esos process as more than just a box ticking exercise.”
Ferris suggested “six months” would be a reasonable extension, enabling businesses to identify projects that will reduce consumption, but admitted that “the danger is that one extension begets another”.
David Cockshott, chief commercial officer at Inenco, said a “total lack of enforcement would undermine the credibility” of both the scheme and the Environment Agency. But there should be “some leniency towards those businesses who struggle to complete the full ESOS report in time compared to those who fail to make any effort.
“However, until the Environment Agency offers to extend the deadline, the threat of financial penalties is very real and our message to any business yet to complete their audit is to begin without delay.”
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Would it be fair to the 152 companies that have complied if an extension was offered?
And at what cost have they undertaken already to be compliant?