The Energy Savings Opportunity Scheme (ESOS): Frequently Asked Questions

ESOS applies to large UK undertakings and their corporate groups. A large undertaking is defined as:

• any UK company that either:
  • employs 250 or more people, or
  • has an annual turnover in excess of 50 million euro (£38,937,777), and an annual balance sheet total in excess of 43 million euro (£33,486,489)

• an overseas company with a UK registered establishment which has 250 or more UK employees (paying income tax in the UK).

The Environment Agency is the administrator for ESOS for the whole of the UK. Responsibility for compliance and enforcement in England also rests with the Environment Agency.

Compliance and enforcement for the other countries in the UK is as follows:

• Scotland – the Scottish Environment Protection Agency
• Wales – Natural Resources Wales
• Northern Ireland – Northern Ireland Environment Agency

1. ISO50001 – If your organisation is fully covered by ISO50001, you simply need to advise the appropriate compliance agency that you are ESOS compliant.
2. Display Energy Certificates (DECs) – If your organisation has a DEC which covers over 90% of its energy use then no further compliance routes are required (although you still need a lead assessor to review your compliance). If the DEC covers less than 90%, then the remaining energy consumption (transport and industrial processes, for example) will need to be covered by another route to compliance.

The ISO 50001 standard supports organisations to become more energy efficient through the development of an energy management system.

Not only does it provide a robust framework for energy management, it also helps you to comply with ESOS: If you are fully covered by ISO 50001, you don’t need to carry out an ESOS assessment.

The time and costs involved in achieving the standard will factor in your decision. Read our guide to ISO 50001 and ESOS to help you decide.

1. Calculate your organisation’s total energy consumption
2. Identify the significant areas of energy expenditure: that is, which assets or activities account for at least 90% of your total energy consumption? This will usually be connected with the core purpose of your business.
3. Appoint a lead assessor to review your ESOS assessment. You can also appoint them to actually carry out the assessment for your organisation.
4. Get one or more board level directors to review the findings of the assessment.
5. Notify the Environment Agency of compliance – this is the body responsible for administering the ESOS scheme in the UK.
6. Keep records

Your energy consumption calculation should include all energy used by buildings, industrial processes and company-related transport. You can calculate it using an energy unit such as kWh or in financial terms by giving your energy spend in pounds sterling. (However, it’s not acceptable to report your energy consumption in terms of CO2 because this is not an energy unit.)

You don’t actually need to provide the figure in your ESOS notification, but you should note the figure and how you calculated it in your company records, in case you get audited.

You must calculate your Total Energy Consumption over a reference period of 12 consecutive months. The reference period must include the qualification date and end before the compliance date.

So – for ESOS phase 2 – the period must include the qualification date of 31st December 2018, and end before the compliance date of 5th December 2019.

No. You must carry out site visits as part of your ESOS energy audit, but you don’t have to visit every site in your organisation.

You can instead take a sampling approach – whereby you split your portfolio into different building types, e.g. office, warehouse, retail etc. – and visit one of each. You can apply the findings to the rest of the sites that are identical or very similar.

Your lead assessor can help you determine a suitable site visit sampling approach.

• carry out your ESOS assessment and audits themselves
• check that the assessment and audits done by people who aren’t lead assessors meet the requirements.

• combustible fuels
• heat (excluding your organisation’s surplus heat from industrial processes)
• renewable energy
• electricity
• fuel used in transport

You only need to include data on transport that your company operates, e.g:

• Fuel used in company cars on business use
• Fuel used in fleet vehicles which you operate on business use
• Fuel used in personal/hire cars on business use
• Fuel used in private jets, fleet aircraft, trains, ships, or drilling platforms which YOU operate.

If your employees take trains, flights or taxis for business use, that are not operated by the company, then you don’t need to report on these. You also don’t need to report on fuel used by subcontractors in transporting goods.

For advice on how to start gathering transport data, read our guide.

Where the landlord supplies energy to a tenant, the tenant is responsible for the energy it consumes. I.e. this energy should form part of the tenant’s total energy consumption.

This is easily determined if the energy is measured, e.g. by a sub meter.

However, where a landlord provides energy to shared parts of a building, the landlord must include that in calculating its total energy consumption.

The Environment Agency and the other regulators don’t need ESOS data to be collated or recorded in particular formats, and so do not provide templates for these activities or the presentation of findings to directors. As long as the ESOS assessment has been conducted, 90% of the total energy consumption is compliant via ESOS audits or an alternative route to compliance, and the data to evidence this work and its findings is recorded, this will be sufficient.

The only standardised element is the notification of compliance. This is available on the government’s ESOS webpage.

• contact details of the participating undertakings and the responsible undertaking
• details of any board level directors or equivalents who’ve reviewed the ESOS assessment findings
• written confirmation from the director(s) to evidence that they reviewed the ESOS assessment
• contact details of your lead assessor and the name of the approved register which they are a member of
• written confirmation from the lead assessor to evidence that they reviewed the ESOS assessment
• the calculation for your total energy consumption
• a list of your identified areas of significant energy consumption
• details of the energy audits undertaken including the audit methodology used in your ESOS energy audits
• details of the energy saving opportunities identified
• details of the routes to compliance used to cover each area of significant energy consumption and where applicable evidence (e.g. certificates) of the alternative routes to compliance
• written agreements to support any disaggregation or aggregation of group members • written agreements to support any alternative responsible undertaking chosen (other than the default highest UK parent)
• reasons for using less than 12 months of data for the measurement of total energy consumption, if you couldn’t do this
• reasons for using less than 12 months of data to support an ESOS energy audit, if you couldn’t do this
• reasons for being unable to use verifiable data on energy use or energy expenditure to support your calculation of total energy use
• the methodology you used for any estimates you’ve made for energy use or energy expenditure
• justification, where applicable, where your lead assessor has not used an energy consumption profile in your audit of an area of significant energy use