ESOS: Energy Savings Opportunity Scheme
ESOS Regulations
Do You Need To Comply?
Energy Savings Opportunity Scheme
Large organisations may need to comply with the Energy Savings Opportunity Scheme (ESOS) regulations.
What is ESOS?
The Energy Savings Opportunity Scheme (ESOS) is a mandatory government scheme to stimulate energy efficiency among large businesses. The EAG provides qualified energy experts to ensure you meet your compliance deadlines.
With the completion of ESOS Phase 2 of the Energy Savings Opportunity Scheme (ESOS), Phase 3 is set for completion by 5th December 2023
The ESOS Regulations 2014 mandates that all large businesses in the UK undertake comprehensive assessments of energy use and energy efficiency opportunities at least once every four years. The deadline for the second compliance period was 5 December 2019, and the next deadline is 5th December 2023. Qualifying businesses will have to achieve compliance with the regulations and notify the Environment Agency.
The criteria for inclusion in ESOS is not entirely straightforward, but essentially applies to any large undertaking that carries out a trade or a business (typically 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
- Has an annual turnover in excess of £44.1 million)
- Has a balance sheet in excess of £37.9 million),
- Or is part of a larger organisation which meets any of the above criteria.
Most public sector bodies are excluded, but some, such as many Universities, may qualify.
Inclusion in the scheme means that an Energy Audit and site surveys will need to be undertaken and a full review or energy consumption data.
Request more information about The EAG’s ESOS Phase 3 service
ESOS Compliance
To comply with the regulations, a ‘Lead Energy Assessor’ will need to conduct an ESOS Assessment to:
- Measure your total energy consumption for buildings, industrial processes, and transport
- Identify areas of significant energy consumption, accounting for at least 90% of your total energy consumption
- Identify cost-effective energy efficiency recommendations for areas of significant energy consumption.
- Report compliance to the Environment Agency
The sooner you start on your journey to ESOS Phase 3 the better prepared you will be to meet your forthcoming deadlines, collecting and analysing your data and preparing your reduction tactics.
The EAG has undertaken ESOS audits for Phases 1 and 2 and is taking bookings for Phase 3.
Organisations covered by ISO 50001 may not need to undertake the Assessment.
ESOS Regulation implementation
The ESOS (Energy Savings Opportunity Scheme) Regulations 2014 have been implemented by DECC (Department of Energy and Climate Change) in order to meet Article 8 of the EU Energy Efficiency Directive. The regulations mandate that all large businesses in the UK undertake comprehensive assessments of energy use and energy efficiency opportunities at least once every four years. The next compliance date is 5th December 2023.
Large Organisations that qualify for ESOS must carry out assessments every four years. These assessments are audits of the energy used by their buildings, industrial processes and transport in order to identify cost-effective energy saving measures. The deadline for the 3rd round of compliance is 5th December 2023 and by this date qualifying businesses will have to achieve compliance with the regulations and notify the Environment Agency.
Further information on the scheme and the qualifying criteria for Large Organisations can be found here…
Does your business need to comply with ESOS?
Simple compliance misses the point. The objective of ESOS is to identify opportunities to reduce energy use and cut consumption and emissions accordingly. Whilst there is no statutory requirement to take action on these opportunities, not to do so is to reduce ESOS to a costly compliance exercise rather than a means to achieve real savings.
We recognise that many companies will need advice on how to comply with ESOS in a cost efficient and timely manner as well as putting energy saving opportunities into practice.
Organisations that are required to comply with the Public Contracts Regulations 2006 or the Public Contracts Regulations (Scotland) 2012 are exempt from the scheme.
What do I have to do to comply with ESOS?
In simple terms, an ESOS Assessment requires participants to do three things:
1. Measure your total energy consumption across your buildings, transport and industrial activities.
2. Conduct energy audits to identify cost-effective energy efficiency recommendations.
3. Report compliance to the Environment Agency (as the scheme administrator) by 5 December 2023.
Participants are not required to implement energy efficiency recommendations identified by their ESOS Assessments. However, they will only achieve the financial benefits that arise from avoiding energy waste if they do implement cost-effective recommendations identified.
Do you have to undertake ESOS if your business is SME or a public body?
Although SMEs or public sector bodies are not required to participate in ESOS, they could still benefit from voluntarily meeting the ESOS requirements. ESOS provides a framework you may wish to use to help you identify energy efficiency opportunities, e.g. you may wish to use a qualified ESOS Lead Assessor to undertake energy audits of your operations.
ESOS – FAQs
Organisations that qualify for ESOS must carry out assessments every 4 years. We are now in the third of these 4 year cycles (known as phase 3).
The deadline for phase 3 is 5th December 2023.
To meet the schemes requirements 90% of total energy usage is required as part of an ESOS assessment.
An ESOS audit can only be undertaken a person where the process is overseen by a Lead Assessor who is a member of an approved professional body register. An in-house employee will either need to apply to one of these approved bodies, or you’ll need to work with an external consultant.
Generally, yes. But if you own or manage sites of significant similarity then potentially a small number of representative sites can be surveyed, and the findings extrapolated.
ESOS only applies to energy you use within your organisation. If you are a landlord, or supply energy to a 3rd party, the portion of energy not consumed by you is not included.
Fuel used in transport is to be included under ESOS where the organisation supplies the cost of the fuel. Therefore, you would exclude company travel by rail or air, but company cars would be included where the organisation pays the cost of the fuel.
The focus is on identifying areas of energy waste and improving energy efficiency. Any recommendations will be specific to your organisation, its sites and processes with an emphasis on practical and cost-effective solutions. In addition, industry recognised solutions including insulation, building controls, low-energy lighting, and energy awareness generally form part of the advice.