Jurisdiction: United Kingdom
Commencement: 29th November 2023
Amends: The Energy Savings Opportunity Scheme Regulations 2014
The Energy Savings Opportunity Scheme Regulations 2014 introduces the Energy Savings Opportunity Scheme (ESOS) which is a mandatory energy assessment and energy saving identification scheme for large undertakings and their corporate groups. All must audit their energy use every four years. ESOS is the UK Government’s approach to transposing Article 8(4)-8(6) of the EU Energy Efficiency Directive which imposes these requirements on EU member states.
A large undertaking either:
- has 250 or more employees in the UK; or
- has fewer than 250 employees but has an annual turnover exceeding £44m and a balance sheet exceeding £38m.
If you are very close to the qualification threshold or have substantially increased or decrease in size in recent years, please refer to the full ESOS guidance on how to assess if you qualify.
Smaller organisations may still be obligated if they are part of a Corporate Group which includes an undertaking in the UK that meets criteria in the bullet point list above.
Small and Medium Enterprises (SMEs) and public sector bodies are exempt from the scheme, but are still encouraged to consider voluntarily undertaking energy audits and proactive energy management, in order to save money and cut energy bills. ESOS provides a framework that can be used to help identify energy efficiency opportunities for these organisations.
The ESOS Regulations came into force on 17 July 2014. The second compliance period has now ended and organisations will now be working towards the third compliance period (6th December 2019 to 5th December 2023).
Various duties apply.
Changes are made to the Energy Savings Opportunity Scheme (ESOS), including requirements for ESOS audits and reports.
The measures introduced by this amendment aim to:
- strengthen requirements for audits and make them more standardised;
- improve the quality of ESOS audits; and
- require public disclosure of high-level recommendations by participants.
Stronger requirements for audits / standardisation
The maximum percentage of total energy consumption that may be excluded from the ESOS audit is reduced from 10% to 5%.
Regulation 15 requires organisations to provide more details regarding the calculation of energy consumption, including energy intensity metrics.
Specific details of how the audit was carried out must now be recorded.
ESOS reports
An ESOS report must be produced for each ESOS assessment conducted after 5th December 2019.
The information that must be included in an ESOS report is outlined in Schedule 3.
ESOS reports must also include additional data on compliance and energy savings, as detailed in Article 18. Where applicable, relevant parts of ESOS reports and evidence packs must also be provided to members of the corporate group.
Improved quality of ESOS audits
Energy audits must identify specific information in relation to energy saving opportunities, as detailed in Article 17.
These include:
- costs;
- benefits; and
- an implementation programme.
Public disclosure of high-level recommendations
Regulation 6 sets out the requirements for the public disclosure of certain information.
Regulation 21 requires organisations to give additional information to the scheme administrator to support compliance monitoring and enforcement.
Regulation 26 introduces a new requirement to:
- submit an ESOS action plan to the scheme administrator, setting out any commitments to implement energy efficiency measures; and
- provide annual progress updates on the action plan.
In the case of corporate groups, when an organisation leaves the group before an action plan or a progress update is submitted, the organisation can agree to comply as if still part of the group or on its own.
Other changes
Organisations with an annual consumption of less than 40,000 kWh of energy are no longer required to appoint a lead assessor; however, they will need to appoint 2 responsible officers instead.
Responsible organisations using estimates must record the method used to make those estimates and, in some instances:
- notify the scheme administrator that an estimate was used; and
- record in the evidence pack, the reasons why an estimate was used.
These Regulations come into force on 29th November 2023.
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