Get answers to the following questions: What is Energy Savings Opportunity Scheme (ESOS)? Is ESOS still required? How do you qualify for ESOS? What is the difference between ESOS and SECR?
Published 17 Feb 2023
Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme for large organisations in the UK with 250 or more employees or have an annual turnover of more than €50 million and an annual balance sheet total of more than €43 million. Organisations under ESOS regulations have until the end of ESOS phase 3 to notify their compliance to the Environment Agency.
How to Carry Out an ESOS Assessment
ESOS compliance is not the same for all ESOS-qualified organisations, which can be classified into three categories: 1) those with ISO 50001 certification; 2) those with zero energy supplies; and 3) those without ISO 50001 certification and without zero energy supplies.
If the organisation’s Energy Management System (EnMS) covers the energy use under ESOS and has been ISO 50001 certified by an accredited certification body, then they need to do the following to comply with ESOS:
Zero energy supplies means that the organisation does not have any physical assets or employees using energy. For organisations that meet this requirement, they still need to comply with ESOS by doing the following:
Organisations that do not have an EnMS, have an EnMS but it is not ISO 50001 certified, or have an ISO 50001 certified EnMS but it does not cover all of the energy use under ESOS, and have no zero energy supplies—they need to comply with ESOS by carrying out an ESOS assessment.
Follow the 5 steps below to carry out an ESOS assessment:
The lead assessor must be a member of an approved professional body register. If no employee within your organisation is a lead assessor or is willing to be the lead assessor, then you can find an external lead assessor using the online registers of the approved professional bodies.
If you appoint an external lead assessor, a board level director of your organisation has to check and sign the overall ESOS assessment and the recommendations of compliance routes. If you appoint an internal lead assessor, then two board level directors need to do the checking and signing off.
Though the primary responsibility of a lead assessor is to review the ESOS assessment, they can also carry out the ESOS assessment themselves.
To measure total energy consumption, you need to ensure that you have verifiable data on the organisation’s energy usage of fuels, heat, electricity, and renewable energy. Verifiable data can include invoices, inventory records, and meter readings. If you do not have verifiable data, you will need to estimate data by using direct comparison, pro-rata extrapolation, or benchmarking.
Areas of significant energy consumption are assets and activities that amount to at least 90% of your total energy consumption. Though you may choose to not identify areas of significant energy consumption, the disadvantage of that choice is that your total energy consumption has to be included in your chosen ESOS compliance routes.
However, if you choose to identify those areas, you can exclude up to 10% of your total energy consumption (known as de minimis energy consumption) from your compliance routes. This up to 10% can be excluded on a group, site, asset/activity, or fuel basis.
There are four ways to show compliance with the Energy Savings Opportunity Scheme:
If a compliance route covers less than 90% of total energy consumption, then another must be applied to the remaining percentage. For example, if 50% is covered by ISO 5001 certification, you can conduct ESOS compliant energy audits on the 40% not covered by it.
DECs and GDAs can only be part of an ESOS assessment if they have been issued and carried out within the compliance period and are still valid on the compliance date. For ESOS phase 3, the compliance period is December 6, 2019 to December 5, 2023.
To be included in an ESOS assessment, data from an ESOS compliant energy audit must:
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Present the findings of the ESOS assessment to a board level director (or two, if an internal lead assessor was appointed) and ask them to confirm the following in writing:
The reason why you should choose SafetyCulture, a digital operations efficiency platform for organisations of all sizes, is that it can help you implement various energy-saving opportunities. With SafetyCulture, you can do the following to increase your energy efficiency and comply with the ESOS UK Regulations 2014:
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ESOS is still required for overseas companies that have a UK registered establishment with 250 or more employees and for Higher Education Institutions (HEI) that are large enough to meet ESOS qualification criteria and self-declare as private sector. Not-for-profit corporate bodies (i.e., large charities), universities that are mostly funded by private sources, and care homes not considered as public bodies all need to participate in ESOS, if they meet the qualifications.
To qualify for ESOS, you have to maintain the qualification criteria (either number of employees or annual turnover and balance sheet) for two consecutive accounting periods before December 31, 2022 (the qualification date for the 3rd compliance period or ESOS phase 3). Check the annual financial statements ending on or within the year before the qualification date and calculate the average monthly number of employees for that financial year.
You can also use this ESOS qualification checklist to find out if you’re qualified.
The difference between ESOS and Streamlined Energy Carbon Reporting (SECR) is that ESOS is limited to energy consumption while SECR covers other types of environmental impact including Greenhouse Gas (GHG) emissions, biodiversity/ecosystem services, and energy efficiency actions. ESOS and SECR are completely separate regulations, though their requirements can overlap. In some cases, organisations will have to comply with both ESOS and SECR.
To prepare for the standardisation of ESOS reporting, use this digital template that includes all of the standardised details recommended by the UK Department for Business, Energy & Industrial Strategy (BEIS). Report on the following for ESOS compliance:
Assess the energy efficiency of an establishment with this digital checklist. ESOS lead assessors can identify opportunities for energy cost reduction and recommend solutions using the energy audit checklist. It is divided into the following sections:
For organisations that want to comply with ESOS by getting ISO 50001 certified or use ISO 50001 certification as a compliance route, they can audit their Energy Management System (EnMS) using this digital checklist. It can also help organisations successfully implement cost-effective energy efficiency opportunities with sections for the context of the organisation, leadership, planning, and support.
Erick Brent Francisco
Erick Brent Francisco is a content writer and researcher for SafetyCulture since 2018. As a content specialist, he is interested in learning and sharing how technology can improve work processes and workplace safety. His experience in logistics, banking and financial services, and retail helps enrich the quality of information in his articles.
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