Compliance and Legislation

compliance and

Businesses face a mass of energy legislation which they need to comply with or face reputational and financial penalties. Likewise, there are schemes available which reward sound energy management behaviour which can drive businesses to best practice performance.

We can help you achieve both goals with our team of CIBSE Accredited Energy Auditors, ESOS Lead Assessors and Sustainability Consultants.

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A Display Energy Certificate (DEC) shows the energy performance of a building, based on the operational rating, on a graphical scale from A (very efficient) to G (least efficient). A DEC must be accompanied by an advisory report which outlines how the organisations can reduce their energy consumption.

  • Public authorities must have a DEC for a building if all the following are true: it’s at least partially occupied by a public authority (e.g., council, leisure centre, college, NHS trust etc) it has a total floor area of over 250 square metres. A building that is frequently visited by the public.

  • Please note public buildings in Scotland must have an Energy Performance Certificate instead of DEC.

DEC’s last for 1 year for the buildings with a totally useful floor area more than 1,000 square meters. They last for 10 years when the total useful floor area is over 250 square metre and up to 1,000 square metres.

DEC’s were introduced to help improve the energy efficiency of buildings and to inform visitors about a building’s energy usage. The penalty for failure to display a DEC is £500 and a further £1000 for failure to obtain an advisory report.

In July 2018, the UK government announced its proposed approach to simplify the energy and carbon reporting framework for business and industry. This is being put in place to replace the CRC Energy Efficiency Scheme, which comes to an end in April 2019, with a new streamlined energy and carbon reporting (SECR) framework.

The new SECR framework’s purpose is to simplify carbon and energy reporting requirements for companies, at the same time ensuring they have the information needed to reduce emissions and ultimately, energy costs.

SECR has been designed to build on existing mandatory greenhouse gas emissions reporting that already applies to UK quoted companies, as well as the Energy Saving Opportunity Scheme (ESOS) Regulations 2014.

The regulations require large companies that consume more than 40,000kWh of energy per year that meet 2 or more of the following:

  • Turnover (or gross income) of £36m or more
  • Balance sheet assets of £18m or more
  • 250 employees or more

If you meet 2 more then you must comply.

All domestic and commercial buildings in the UK available to buy or rent must have an Energy Performance Certificate (EPC).

For newly constructed buildings it is the responsibility of the builder to provide an EPC to the person who commissioned the construction of the building, within five days of completion. An EPC must be obtained before a building is marketed for sale or rent.

Requires that large (undertakings) organisations in the UK undertake comprehensive

assessments of energy use and energy efficiency opportunities at least once every four years.

The criteria for inclusion to ESOS applies to any large undertaking that carries out a trade or

a business (most commonly a Company), and any corporate group where at least one member

of the UK group meets the ESOS criteria.

  • A large undertaking is one that employs at least 250 people,
  • Or has an annual turnover in excess of €50 million and a balance sheet in excess of €43 million.
  • Most public sector bodies are excluded, but other organisations that receive some public funding, such as universities, may qualify.

We are now in Phase 3 of the ESOS compliance scheme. The regulations require large UK

organisations to take three important steps before the compliance date of 5 December 2023:

  1. Measure total energy consumption for buildings, industrial processes and transport
  2. Conduct audits to identify cost-effective energy efficiency recommendations for areas of significant energy consumption; and
  3. Report compliance to their national scheme administrator – the Environment Agency in England, SEPA in Scotland, NIEA in Northern Ireland and NRW in Wales.

To comply with the regulations, a Lead Energy Assessor will need to conduct the ESOS Assessment. If an organisation has ISO 50001, they are already compliant through ISO 50001 and just need a lead assessor to submit the evidence via a lead assessor.

Climate Change Agreements (CCAs) were set up by the UK Government to encourage greater uptake of energy efficiency measures amongst companies in energy intensive industries. CCAs are part of the Government’s policy to reduce use of energy and hence reduce CO2 emissions.

CCAs provide companies with a significant financial incentive – a discount on the Climate Change Levy (CCL) which is applied on electricity, gas, propane and coal, plus, exemption from the Carbon Reduction Commitment (CRC). To retain this financial benefit each company must achieve an energy saving target set for a two-year period. Participation in a CCA is voluntary, but as the financial incentives are very strong almost all sites that can have a CCA apply for one.

CCAs were introduced in 2001 and initially ran to 2013. We are now in the second cycle of CCAs, which run from 2013 to 2023. Some of the rules have changed slightly but many aspects of “new CCAs” are very similar to the old ones.

From 1st April 2020 Climate Change Agreements (CCAs) allow eligible energy intensive businesses to receive up to a 93% discount on CCL charges applied to electricity and 78% applied to natural gas. The main rates of CCL are charged on energy supplied to an end user.

Since 4th January 2011, any organisation in the UK with air conditioning systems with a cooling capacity over 12kW has a legal obligation under Article 9 of the Energy Performance of Buildings Certificates and Inspections) Regulations 2007 to carry out an independent energy inspection and assessment of their system.

The ACI is not to be carried out by the maintenance company. The legislation was introduced by the Department of Communities and Local Government. TM44 Air Conditioning (AC) Inspections identify ways in which the energy consumption of existing air conditioning systems can be reduced. TM44 was originally published in 2007 but was updated and revised in 2012.

The Inspection is intended for all types of ‘comfort cooling’ (cooling for the comfort of human occupants), but it is also appropriate for air conditioning systems for some other purposes,

e.g., Server Rooms. It is not intended to cover dedicated process cooling systems or systems that serve chilled distribution warehouses, or production and manufacturing facilities. Were systems provide air conditioning for both process and comfort cooling, only that part which provides comfort cooling will be inspected. It is important to note that central air handling plant, cooling towers, chillers, condensers and coolers, local heat recovery ventilation units, and their controls are also included in the inspection report.

In the UK, the air conditioning system in a building also includes groups of units that are individually of less than 12kW cooling capacity but have a combined cooling capacity greater than 12kW. For regulatory purposes, the cooling capacity of an AC system is defined as the ‘sum of all the individual cooling units under the control of one building owner or operator’.

The International Organization for Standardisation (ISO) developed ISO 50001 as a blueprint to assist organisations in improving the ways they manage their energy. ISO 50001 identifies requirements for establishing, implementing, maintaining and improving an energy management system. This can embed energy practice in your business and create a strategy for continuous improvement.

Displaying your Corporate Social Responsibility (CSR) commitment, there can be benefits to operational productivity, staff engagement, reduced regulatory taxes and carbon footprint reductions. ISO 50001 system also enables businesses to become excused from complying with ESOS providing it covers 100% of the organisation’s energy footprint.