Compliance for a sustainable future
Operators of commercial buildings and commercial enterprises have their part to play in reducing our carbon footprint and ensuring we are working towards a #netzero 2050. As such, there are many areas of energy compliance to adhere to depending on your business type and size. Basic compliance means ensuring that you have the correct energy certification for your building type:
- If you are in a regular private building, you will need a valid energy performance certificate (EPC)
- If you are a public building you will need a valid display energy certificate (DEC)
- If you are a large company you will need to be Energy savings opportunity scheme (ESOS) compliant or submit Streamlined Energy and Carbon Reporting (SECR)
Quoted companies will be used to submitting their annual returns, which will include carbon reporting such as Green House Gas (GHG) and if you are an Academy Trust you will be required to complete (SECR). There is also Climate Change Agreements (CCA) Scheme and EU Emissions Trading Scheme (ETS) required for those applicable.
The objective of all assessment and reporting is to ensure that building owners and commercial enterprises understand and take responsibility for their energy consumption emissions and work towards a sustainable future.
In addition, depending on the services you provide as a business, you will also need to comply with specific legislation. For example, if you are responsible for re-charging tenants for their share of the buildings primary supply, it will mean being compliant to heat network and billing regulations or Ofgem’s resale of gas, electricity or Ofwats resale of water regulations.
We have produced this article to give more information on each of the compliance regulations and legislation.
Energy Performance Certificate (EPC)
This certificate is required and applies to both the domestic and commercial sector. An EPC will rate the building from A to G – A being the most efficient and G being the least efficient.
Landlords who are letting or selling properties are required by law to carry out EPC assessments and ensure their properties are at an EPC level of E or above. If they are F or G, improvements will have to be made to bring the building up to a E certification before a certificate will be issued.
EPCs show how energy efficient a building is and let the person who will use the building know how costly it will be to heat and light, and also what its carbon emissions are estimated to be.
Certificates are valid for 10 years, after this point a new assessment is required. There is a central database located here where you can find information on whether your building has a valid EPC.
Many companies that offer EPC assessments will provide certificates with their prices varying depending on each individual building. When you sell your home, a certificate will be required by the purchaser’s solicitor as part of the sale agreement.
For commercial buildings, if you don’t make an EPC available to any prospective buyer or tenant, you could be exposed to a fine based on the rateable value of the building.
Display Energy Certificate (DEC)
Display Energy Certificates (DECs) are much like EPCs but are designed to show the energy performance of public buildings. All public buildings with a total useful floor area greater than 250m² are obligated to have a Display Energy Certificate (DEC) and an accompanying advisory report (AR).
Public buildings are defined as buildings which are frequently visited by the public, such as leisure centres, schools, hospitals. Many buildings that are not required to have a DEC need an EPC (important to note: DECs are not required in public buildings in Scotland, EPCs are used instead).
DEC certificates must be displayed, and fines can be issued for failing to display a DEC and for not having a valid advisory report.
The certificate is valid for one year and is accompanied by an Advisory Report (AR) which is valid for seven years. The AR report does not have to be displayed but should be made available upon request from an interested party, such as a tenant.
Much like EPC’s, many companies that offer EPC assessments will provide certificates with prices varying depending on the building.
Green House Gas (GHG) and Streamlined Energy and Carbon Reporting (SECR)
SECR is mandatory and aims to introduce more businesses to the benefits of carbon and energy reporting. Previously, it was only quoted companies that were required to report on their consumption and emissions. However, since SECR was established, large unquoted companies also need to complete SECR if it meets two of the following criteria:
- If there are more than 250 employees.
- If there is >£36m in turnover.
- If there is a balance sheet total of >£18m.
Unquoted companies which use 40MWh or less over the reporting period are exempt, but will need to include a statement confirming energy usage. Public sector organisations are also exempt. However, schools that have transferred to academy status will need to complete SECR. Specific guidance for academies can be found here.
SECR reporting shows both consumption and emissions. This includes electricity, gas and transport fuel. For example, a facilities client that used petrol lawn mowers across their estate will need to report on the consumption.
Global greenhouse gas (GHG) replaced MGHG and forms part of SECR.
Quoted companies of all sizes continue to be required to report their global greenhouse gas (GHG) emissions and an intensity ratio through their annual reports. Additionally, they are now required to report their total global energy use and information relating to energy efficiency action alongside the methodology used to calculate the new and existing disclosure requirements. They do this through SECR.
Some SECR requirements differ for quoted and unquoted organisations. One of the easiest things a company can do to help reduce their carbon footprint is by buying certified green energy.
Climate Change Agreements
Climate change agreements are voluntary and are made between UK industry and the Environment Agency to reduce energy use and carbon dioxide (CO2) emissions. In return, operators receive a discount on the Climate Change Levy (CCL), a tax added to electricity and fuel bills. The Environment Agency administers the CCA scheme on behalf of the whole of the UK.
The current CCA scheme started in April 2013 and will run until 31 March 2025.
Energy Savings Opportunity Scheme (ESOS)
We often get asked what is the difference between ESOS and SECR. The main differences are between the eligibility criteria and reporting requirements. The table below defines the differences:
|<2 of the above
|>1 of the above
|31/12/2022 (third qualification period)
|Deadline for submission
|Business Financial YE
|>40 MWH annually
|Public sector organisations
|All energy usage, GHG emissions, identify savings opportunities, evidence pack submitted to Environment Agency
|Esos audit required, all energy usage recorded, previous year data, emissions ratio, efficiency plan
The key objective of this reporting is to understand and control energy supply.
As part of our service, Ginger Energy will receive and validate invoices directly from the suppliers, enter the data into our energy management portal, which will provide the data required in reporting. Additionally, we can add sub-metering, so energy supplied can be measured in different zones throughout the same building.
Our consultants will work with you to ensure you have the tools and the knowhow to ensure your organisation is compliant.