Overview of ESOS
Introduced: July 2014 (via Energy Savings Opportunity Scheme Regulations 2014)
Effective from: Phase 1 compliance December 5, 2015 (scheme operates in 4-year cycles)
Region(s): United Kingdom
About ESOS
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy efficiency scheme for large UK organizations.
It requires companies to measure their Total Energy Consumption (TEC), identify significant areas of consumption, and either conduct energy audits or implement ISO 50001 certification.
Amendments made in 2023 expanded obligations—now requiring Action Plans, progress updates, and enhanced audit coverage under a new statutory instrument.
ESOS supports the UK’s broader net-zero goals by identifying energy-saving opportunities and enforcing regular energy performance reviews.
Criteria for compliance
A UK “undertaking” or corporate group qualifies if, on the qualification date, it meets either of the following criteria:
- ≥ 250 employees, OR
- Annual turnover > £44 million AND annual balance sheet total > £38 million
If any member of a UK corporate group qualifies, the entire group must comply. Public-sector bodies are exempt.
Compliance timelines
ESOS operates on four-year compliance cycles:
Phase 3
- Qualification date: 31 Dec 2022
- Compliance deadline: 5 Jun 2024
- Key new requirements: ≥95% coverage, intensity ratios, Action Plan (by 5 Dec 2024), Progress Updates (2025 & 2026)
Phase 4
- Qualification date: 31 Dec 2026
- Compliance deadline: 5 Dec 2027
- Key new requirements: Same as above; DECs/GDAs no longer valid; net-zero audit framework optional (mandatory from Phase 5)
Disclosure and evidence pack requirements
- Total Energy Consumption (TEC) over a continuous 12-month period
- Significant energy consumption covering ≥95% of TEC
- Energy audits or ISO 50001 (for fully certified energy systems)
- Energy-intensity ratios (buildings, transport, and process)
- Energy-saving opportunity register (cost, savings, ROI)
- Director-approved Action Plan and annual Progress Updates
- Compliance Notification Form submitted online, signed by a director and accredited ESOS Lead Assessor
- Exemption from assessor sign-off only if TEC is < 40,000 kWh
Third-party assurance
A certified ESOS Lead Assessor (on a government-approved list) must review and sign off the assessment unless the organization’s TEC is < 40,000 kWh. Regulators may conduct spot checks but no standing requirement for external audits of energy data itself.
Penalties for non-compliance
- Late of missing compliance notification: up to £5,000 + £500/day (max 80 days), public listing of breach
- Failure to complete ESOS assessment: up to £50,000 + £500/day, public list of breach
- Inadequate records/obstruction: up to £5,000, public list of breach
Repeat offenders may incur cumulative fines up to £90,000 per phase and reputational harm due to public naming by regulators.
