Your Energy Savings Opportunity Scheme (ESOS) Phase 3 Obligations and How We Can Help
The Energy Savings Opportunity Scheme (ESOS) targets large undertakings and corporate groups. This article provides a brief overview of the scheme, it's aim and how it affects your organisation.
ESOS is a mandatory energy assessment program in the UK. Administered by the Environment Agency, it targets qualifying organisations to conduct assessments every four years. These audits analyse energy usage across buildings, industrial processes, and transportation. The primary goal is to identify customised, cost-effective measures that enable companies to reduce energy consumption, achieve carbon savings, and cut costs.
We are currently in Phase 3 of the scheme, although the deadline for submissions of ESOS registrations and energy audits has now expired.
The Phase 4 deadline is currently 5 December 2027.
Qualification Criteria
Companies only need to comply with ESOS if, on 31 December 2022, it met the ESOS definition of a large undertaking. Corporate groups also qualify if at least one UK group member meets these criteria.
- Employ 250 people or more
- Have an annual turnover of greater than £44million and an annual balance sheet of more than £38m
While SMEs and Public Sector bodies are generally exempt, it is expected that Phase 4 will bring with it a lower financial threshold to envelope more organisations into the scheme.
"ESOS is more than a regulatory burden - it is an opportunity for companies to enhance efficiency, save costs, and contribute to sustainability. Partnering with Johnson Controls streamlines the compliance process and maximises the benefits."
Why Register for ESOS
- Legal Requirement: ESOS is a legal obligation for qualifying businesses. If your organisation meets specific criteria (based on employee numbers, turnover, balance sheet, or inclusion in a corporate group), you must participate in ESOS.
- Cost Savings: Despite the audit costs, implementing recommendations from ESOS audits can lead to substantial savings. These savings far outweigh the initial investment, making it financially prudent for companies to participate.
- Carbon Reduction: ESOS helps companies reduce their carbon footprint. By identifying energy-saving opportunities, businesses contribute to environmental sustainability.
- Compliance: Non-compliance can result in penalties. Registering for ESOS ensures your organisation adheres to legal requirements and avoids enforcement action.
Deadlines
The ESOS Phase 3 deadlines have now expired. The key ESOS Phase 3 timeframes were:
Failure to comply could result in a basic fine of £50,000, plus an additional fine of £800 per day up to a maximum of 80 days.
Steps for Compliance:
- Identify your organisation’s total energy consumption.
- Determine areas of significant energy consumption (at least 95% of your total energy usage).
- Calculate energy intensity ratios.
- Carry out an audit on significant energy consumption and identify energy-saving opportunities.
- Complete the ESOS report and share details with group undertakings (if relevant).
- Get the report signed off by board-level directors.
- Submit a compliance notification to the Environment Agency through the online ESOS notification system.
Johnson Controls: Your ESOS Partner
At Johnson Controls, we have years of expertise shared by our accredited ESOS Auditors and dedicated in-house compliance team. We can guide you through every step of the process to ensure that your company fulfils its ESOS obligations.
- Audit Expertise: Our Energy Services team assists clients in achieving scheme registration by the deadline.
- Submission Support: Johnson Controls can guide businesses through the ESOS process, from audits to submission.
- Decarbonisation Solutions: Beyond ESOS, Johnson Controls offers practical solutions for reducing carbon footprints and optimising energy consumption.