The end of the current Energy Savings Opportunity Scheme (ESOS) compliance period (and associated notification by the end date of 5 December 2019) is fast approaching in the UK. The next ESOS compliance period commences on 6 December 2019 and will require companies to assess if they are within scope of the ESOS.

Introduced under the Energy Savings Opportunity Scheme Regulations 2014, the ESOS transposes the energy audit requirements from the EU Energy Efficiency Directive (2012/27/EU) into national law, and prescribes mandatory assessment and auditing requirements for large companies (or small or medium-sized companies where they are in a corporate group with a large company).

For the purpose of the ESOS, a large company is an undertaking which has:

  • ≥ 250 employees; or
  • > €50 million annual turnover and an annual balance sheet of > €43 million.

Among the requirements set out in the ESOS, qualifying companies must ensure they undertake the following every four years:

  • Calculate the total energy consumption over a 12-month period, based on energy supplied to the company and consumed by assets or activities.
  • Choose whether to identify areas of significant energy consumption, which are any assets or activities of the company that account for up to 90 per cent of total energy consumption.
  • Undertake an energy audit in relation to total energy consumption (or areas of significant energy consumption), which must include:
    • Analysis of energy consumption and efficiency
    • Identification of energy efficiency improvements
    • Recommendations of energy saving opportunities
    • Identification of their costs and benefits
  • Notify the Environmental Agency of compliance with the requirements by the compliance date (i.e., 5 December 2023 for the next compliance period) through the online portal.

Companies may be exempt from the requirements of the ESOS in certain circumstances.

We note that this regime is separate to the Streamlined Energy and Carbon Reporting (SECR) regime. Please refer to our separate blog post on the corporate reporting requirements under the SECR regime here.