Introduction to UK Energy Act 2023 and detailed ESOS updates

The Energy Act 2023 was written into UK legislation on 26th October 2023. The Act targeted a wide range of areas relevant to the energy sector, marking this as an important step towards creating an extended framework for the UK energy system that should help to enable the UK Government’s goal to reach net-zero by 2050.

The effect of legislation although encompassing a broad spectrum of topics and sub-sectors can be summarised into three key targets: 

  • Energy security
  • Supporting delivery of Net-Zero
  • Protecting consumers

The government aim to reach these goals by focusing knowledge, funding, and increased policy engagement within these 5 sub-sectors:

  • Electricity and Gas sector governance
  • Heat and energy efficiency
  • Carbon Capture, usage, and storage
  • Hydrogen
  • Nuclear

While the policies within the Energy Act are finalised, they also reflect the start of an agenda surrounding each policy with future adaptations and evolution expected to regulations, rules, schemes and frameworks set out during this Act.

Numerous revisions to Energy Savings Opportunities Scheme (ESOS) regulations were passed into law through the Energy Act. ESOS Phase 3 is a key part of our services to aid businesses with expert knowledge on energy consumption and the ways in which this could be reduced across a wide array of businesses and sectors. 

Below are the key revisions to the scheme now passed into law which will affect reporting of ESOS Phase 3 for all businesses involved:

  • Delay of phase 3 reporting and compliance notification deadline from 5 December 2023 to 5 June 2024.
  • Inclusion of total estimated savings in kWh achieved by the organisation during Phase 3, in comparison to previous ESOS compliance deadlines
  • Inclusion of an energy intensity ratio for each of buildings, transport and industrial processes and information on estimates used. For example: kWh per £M Turnover, kWh per production output.
  • Reduction in de minimis exemption so that participants’ Significant Energy Consumption covers at least 95% of their Total Energy Consumption (as compared to 90% in Phase 2)
  • ESOS Action Plan – a written statement of any actions proposing to achieve any energy savings or emissions reductions, with complimentary targets intended to be achieved by participant.
  • Imposing requirements for action plans to be undertaken and achieve specified energy savings or emissions targets set. Including the adoption of processes, practises, systems or confirming to specific standards.

This article expands on previously covered changes to ESOS regulations following the DEFRA consultation. The UK Energy Act 2023 has provided confirmation of changes outlined in previous articles.

If you would like to speak with a member of our team about these updates on ESOS or would like any further information, please do not hesitate to get in touch with our solutions team at solutions@beyond.ly

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