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Energy Savings Opportunity Scheme

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The Law

ESOS is an energy assessment and energy saving scheme and is established by the Energy Savings Opportunity Scheme Regulations 2014 (ESOS Regulations). The ESOS Regulations were substantially amended in 2023, through The Energy Savings Opportunity Scheme (Amendment) Regulations 2023.

Energy Savings Opportunity Scheme: What is it?

ESOS is a mandatory energy assessment scheme for organisations in the UK. ESOS compliance applies to large UK undertakings and their corporate groups that meet the criteria. Large organisations are required to assess and report their energy usage every 4 years, as well as to find ways to reduce their energy consumption. ESOS has now entered Phase 3 after the successful completion of ESOS Phases 1 & 2. UK companies have until 5 June 2024 to comply with ESOS Phase 3. The UK Government estimates that the benefit of ESOS compliance to the UK after Phases 1 & 2 is approximately £1.6 billion.

Detailed ESOS Information

What size companies does ESOS apply to?

A company must comply with ESOS if their organisation qualifies as a ‘large undertaking at at 31 December 2022.

A ‘large undertaking’ meets one or more conditions below:

  • It employs 250 or more people.
  • It has an annual turnover over £44 million and a balance sheet over £38 million.
  • An overseas company with over 250 employees in the UK.

Companies must participate in ESOS if part of a group includes a UK entity meeting the above conditions.

What does ESOS comprise of?

Organisations that qualify for ESOS must carry out energy assessments every 4 years. These assessments are audits of the energy used by a company’s buildings, processes, and transport to identify cost-effective energy-saving measures.

The ESOS assessment must cover all of an organisation’s UK operations over a twelve-month period. It requires participants to do the following:

  • Measure total energy consumption across buildings, transport, and industrial activities.
  • Conduct energy audits, such as an ESOS-compliant energy audit, Display Energy Certificate, Green Deal Assessment, or a certified ISO 50001 Energy Management System, to identify cost-effective energy efficiency recommendations.
  • Report compliance to the Environment Agency.

Companies must notify the Environment Agency of compliance before the end of the compliance period. The assessment must be reviewed by a board-level director and approved by a lead assessor.

What are the deadlines?

The deadline for the third compliance period (ESOS Phase 3) is the 5 June 2024

  • The qualification date for the third compliance period is 31 December 2022.
  • The compliance phase runs from the 6 December 2019 – the 5 June 2024.

Organisations must notify the Environment Agency by a set deadline that they have complied with their ESOS obligations

Vital’s ESOS services

Vital has been delivering ESOS compliance services to large UK companies since the start of the scheme in 2014. We have worked for a wide range of companies ranging an aircraft manufacturer to international telecoms business with a UK subsidy. Our aim has always to make the process as simple and straightforward for our clients as possible. In all of the ESOS assessments we have carried out, we have always found pragmatic opportunities for our clients to save money and reduce carbon emissions from their operations.

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