Energy Savings Opportunities Scheme (ESOS)

Key points

  • The Energy Savings Opportunity Scheme (ESOS) Regulations are regulations which for Phase 4 will apply to business with 250 employees based in the UK or elsewhere, have an annual turnover in excess of £44,000,000, or a balance sheet value in excess of £38,000,000.
  • A business must take part in ESOS if the undertaking is part of a corporate group which includes another UK undertaking or UK establishment which meets these criteria.
  • UK registered establishments of an overseas company will also need to take part in ESOS (regardless of their size) if any other part of their global corporate group activities in the UK meet the ESOS qualifying criteria.
  • Participation is not discretionary.
  • It is enforced, rigorously, by the Environment Agency.
  • Penalties for non-compliance can be severe.

 

What is the Energy Savings Opportunity Scheme (ESOS)?

ESOS is a regulatory scheme which requires business of a size above certain prescribed thresholds to review aspects of their energy consumption, and additionally create an Action Plan to improve their energy performance.

Phase 3 of ESOS has been completed, the original Compliance Date for which was 5 December 2023, with ESOS Progress on achieving  Action Plan targets (introduced for Phase 3) being required to be updated by 5 December 2025.

The Phase 4 ESOS qualification date is 31 December 2026, and requires one year’s energy consumption measurement between 6 December 2023 and 5 December 2027.  The Compliance Date for Phase 4 of ESOS is 5 December 2027.

Compliance

Compliance with ESOS is overseen by the Environment Agency and enforcement is followed through with fines which can start at £50,000 and rise to £90,000 in serious cases of none compliance.

For Phase 1 of ESOS, enforcement fines of £160,000 were issued and recovered.

For Phase 2 of ESOS, 2,751 compliance notices were issued with 123 civil penalties (fines) totalling £1.927M awarded.

For Phase 3 of ESOS, after an extension to the compliance date to August 2024, enforcement notices were sent to non-compliant organisations.

 

If you believe you may be liable for participation in the ESOS process, West London Energy Assessors can assist eligible business within the scope of the Regulations achieved compliance.