Firms across all sectors have until the end of the day to fall in line with the Energy Savings Opportunity Scheme (ESOS), or face the prospect of enforcement action.
Under legislation governing the mandatory energy assessment scheme, organisations dubbed as large undertakings – employing 250 people or more, or with an annual turnover in excess of €50 million (£38,937,777) and an annual balance sheet total in excess of €43 million (£33,486,489) – must supply energy audits to the Environment Agency (EA).
The first compliance period closed on 5 December, but the regulator chose to waive enforcement action and penalties after only 4,000 firms provided notifications of compliance. According to its own enforcement guidelines, the EA would not normally expect to take enforcement action for failing to notify by 5 December 2015, providing the notification is received by 29 January 2016.
Those that miss this deadline and submit notifications after today could face a potential fine of £5,000 depending on the circumstances, with £250 daily fines to follow if the undertaking remains in breach. After 80 working days, this is increased to £500 per day.
These penalty fines are the minimum of what the EA is within its rights to enforce, and apply if a qualifying firm fails to notify the regulator. The consequences become much more severe if those firms fail to even carry out an energy audit of consumption across buildings, industrial processes and transport.
The EA would normally apply a fine of £25,000 if this failure relates to the first compliance period or new entrants in subsequent compliance periods. The fine is then increased to £50,000, with subsequent daily fines similar to those applied for missing the deadline.
The last update to Clean Energy News from Jo Scully, the EA’s project manager for ESOS, on 18 January showed that 4,300 notifications of compliance had been received. Letters were sent out to around thousands of firms earlier this month to determine why the EA had not been contacted, with some claiming they either did not qualify or had provided information that the EA had been unable to match to a company.
Taking these exceptions into account, there are still potentially thousands of firms that could fall victim to fines. The EA anticipates that the total number of notifications of compliance by today will be around 6500, leaving around 3,000 to miss the cut-off.
The EA has claimed that each penalty action will be taken on a case by case basis, with Scully offering the following advice: “Those organisations that have not done anything yet will be in a better position when we are considering what action to take if they at the very least submit an intent to comply by 29 January (even if they will not be compliant by this time). If they give a realistic date of when they expect to be able to complete their ESOS assessment then we know that they are engaged with the process.”
