ESOS is an energy assessment and energy saving scheme and is established by the Energy Savings Opportunity Scheme Regulations 2014 (ESOS Regulations). The ESOS Regulations have been substantially amended in 2023, through The Energy Savings Opportunity Scheme (Amendment) Regulations 2023, to make changes to the scheme. Information on relevant legislation can be found in Appendix D.
The scheme applies to large undertakings and groups containing large undertakings in the UK An undertaking, as defined in the Companies Act 2006, is:
a corporate body or partnership
an unincorporated association carrying on a trade or business, with or without a view to profit
The definition of an undertaking includes partnerships, limited liability partnerships, joint ventures and in many cases charities.
The scheme has resulted in estimated annual efficiency energy savings of 1.65 TWh from buildings,1.51 TWh savings for industrial processes, and 0.52 TWh of fuel efficiency savings across the ESOS population. (Data is from the ESOS post implementation review).
The changes to the scheme being introduced from the third compliance period onwards are estimated to lead to an additional 28 TWh across all participants over 2024-2037, which equates to an estimated £1.12 billion in energy bill savings for participants over that period. (Data is from the Energy Security Bill factsheet: Powers to strengthen the energy savings opportunity scheme).
What happens if my organisation does not comply with ESOS obligations?
There are various ways in which an organisation in scope can fail to meet its
obligations for ESOS compliance. These include, but are not limited to
Missing the deadline
Failing to carry out an energy audit
Carrying out a poor-quality audit
Keeping incomplete or inaccurate records
Publishing false information in your records.
The consequences will depend on how you have not met your ESOS regulations. In some cases, you will be required to take action to bring the ESOS reporting up to the right standard. If you are found to be non-compliant you can expect to receive a basic fine of £50,000, plus an additional fine of £800 per day up to a maximum of 80 days.
The regulators have the power to waive enforcement action and penalties, and the Environment Agency has said it will not take action against organisations that do not comply with the ESOS Phase 3 deadline (5 June 2024), providing they register their account with the new IT system by that date and submit their notification of compliance by 6 August 2024 The regulatory enforcement extension period will end after 6 August 2024.