Energy and Infrastructure

ESOS applies to all organisations (and their corporate groups) that were classed as "large" undertakings on 31 December 2022. Many in-scope businesses will, having submitted their ESOS notification to the Environment Agency, now have put this reporting obligation to the back of their mind until phase 4 in around three years' time. However, phase 3 of ESOS brought some important changes, one of which will keep ESOS on the agenda on an at-least-annual basis for the foreseeable future.

Whereas ESOS has until this point been a relatively light reporting obligation, the introduction of a requirement for businesses to draft and implement an "ESOS action plan" changes the nature of the obligation significantly. The ESOS action plan must set out the business's plans to reduce energy consumption, whether these plans are based on recommendations through the ESOS assessment, and expected savings (including how these savings were estimated). Annual updates to the plan will be required. The action plan must be signed off by a board level director, or equivalent. Given that guidance for action plans is now not expected to be published until 1 November 2024 and functionality to submit a plan has not yet been made available, the Government has extended the original December deadline for submission of the first plans to 5 March 2025. Read our briefing for more.

Since coming to power in July, the Labour Government has made some significant advancements in the promotion of renewable energy in the UK. It very quickly changed the National Planning Policy Framework to end the de facto ban on onshore windfarms. The Contract for Difference scheme, one of the few remaining incentive schemes for renewable energy project development, concludes its sixth Allocation Round in early September with a record number of renewable projects across a range of technologies potentially benefitting. If all projects were developed (which is unlikely), 9.6GW of renewable capacity would be added to the grid.