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Energy Savings Opportunity Scheme (ESOS): are you compliant?

The Energy Savings Opportunity Scheme (ESOS) is already running and not optional. Fines could run to tens of thousands. What is ESOS and does it apply to you?


What is the Energy Savings Opportunity Scheme (ESOS)?

The Energy Savings Opportunity Scheme (ESOS) means many UK companies must undertake in-depth analysis of their energy usage to identify potential energy savings. These audits are required every four years.

ESOS is not optional – it was introduced in July 2014 by the UK Government to comply with the European Energy Efficiency Directive.

Does my company qualify for ESOS?

Surprisingly, the type of work your company does and the amount of energy you use are irrelevant. In short, you must comply if:

  • You employ 250 people or more
  • You have an annual turnover exceeding €50 million (around £37 million at time of writing) and a balance sheet of more than €43 million (around £32 million at time of writing)
  • You are part of a group that includes at least one entity that meets at least one of the above criteria

Even those in non-for-profit and public sectors may have to comply with ESOS.

My company is borderline – do I have to comply with ESOS?

If you are very close to the threshold for qualification or have recently grown or shrunk, you may need to look back over several accounting periods. Need to comply is determined by whether you have maintained size for at least two consecutive accounting periods. The (somewhat technical) exact wording reads:

“Where, in any accounting period, an undertaking is a large undertaking (or a small or medium undertaking, as the case may be), it retains that status until it falls within the definition of a small or medium undertaking (or a large undertaking, as the case may be) for two consecutive accounting periods.”

What are the compliance deadlines?

The original qualifying date for ESOS was 31 December 2014 so initial requirements on compliance are based on the nature of your company at that time. Subsequent compliance periods are every four years after that:

Compliance period Qualification date Compliance period Compliance date
1 31/12/1417/07/14* to 05/12/1505/12/15
2 31/12/1806/12/15 to 05/12/1905/12/19
3 31/12/2206/12/19 to 05/12/2305/12/23
4 31/12/2606/12/23 to 05/12/2705/12/27

What is the easiest way to be ESOS compliant?

An ISO 50001 energy management system certified by an accredited body and covering all your energy use counts as your ESOS assessment. To be compliant:

  • the certification must remain valid at the compliance date
  • the Energy Management System must cover all of the assets held and activities carried on by your organisation as at the qualification date

Other acceptable substitutes are:

  • Display Energy Certificates (DECs)
  • Green Deal Assessments (GDAs)
  • ESOS compliant energy audits

What are the penalties if I don’t comply with ESOS?

Penalties range from what is essentially a slap on the wrist (a compliance notice asking for more details or an enforcement notice explaining how to comply with ESOS requirements) to fines ranging from £5,000 to £50,000. Perhaps most worryingly, an additional £500 can be charged for each working day for up to 80 days. Reputational damage could also result if you are ‘named and shamed’.

More information on ESOS

Complying with the Energy Savings Opportunity Scheme

Contact the Environment Agency ESOS help desk:

Our dedicated pages have lots more information about business gas and business electricity.

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