What is the Energy Savings Opportunities Scheme? 

The Energy Savings Opportunities Scheme (ESOS) is a mandatory energy assessment scheme enforced by the Environment Agency. It requires qualifying organisations to report on their energy usage every four years. Although the requirements can be complex, businesses that qualify must act fast to meet the phase 3 reporting deadline, which has been extended to 5 June 2024

Who qualifies under phase 3? 

For the current reporting phase (up to June 2024) your organisation will need to comply if the following applies:

  • Employs 250 people or more.
  • Annual turnover exceeds £44m, and annual balance sheet exceeds £38m.
  • Part of a corporate group containing a UK company that meets the above criteria.

If your organisation fell within the scope of ESOS for previous phases of compliance, it is likely it will also qualify for phase 3.

If your organisation qualified for phase 2 but no longer qualifies for phase 3, it is important to ensure you have checked two years’ of financial accounts and notified the Environment Agency of the change.

Public bodies are exempt from ESOS participation.

If your organisation is part of a corporate group and only part of the group is classed as a public body then the rest of the group will be required to participate in ESOS if they qualify. The Public Contracts Regulations broadly state that organisations are public bodies if:

a)  They are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character.
b)  They have legal personality.
c)  They have any of the following characteristics:

  • They are financed, for the most part, by the State, regional or local authorities, or by other bodies governed by public law.
  • They are subject to management supervision by those authorities or bodies.
  • They have an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities, or by other bodies governed by public law.

In other words, the undertaking must satisfy the criteria described in (a) and (b) and either (c) (i), (ii) or (iii) in order for it to be classed as a public body (contracting authority) excluded from the scope of ESOS.

If you are unsure whether your organisation is required to comply, please refer to section 1.2 of the government published guidance on Complying with the Energy Savings Opportunity Scheme.

What are the five key steps to compliance?

  1. Calculate your total energy consumption.
  2. Identify your areas of significant energy consumption.
  3. Complete the required audits for one year’s consumption under the direction of a lead assessor.
  4. Submit your ESOS notification of compliance to the Environment Agency.
  5. Keep records of compliance in an evidence pack.

What is the risk of non-compliance?

Penalties for failing to comply fully, or for false or misleading statements can range from between £5,000 and £90,000.

The Environment Agency audits evidence packs and the phase 2 auditing programme resulted in just 30% of all ESOS audits being compliant, with 7% being non-compliant and 63% compliant with remedial action required. Zenergi’s Technical Services team met the reporting requirements on all reports submitted on behalf of clients, undertaking remedial actions where necessary to achieve 100% compliance.

How can Zenergi support housing associations through this process?

Gathering energy consumption data can be time-consuming, especially when doing this for the first time, or for organisations spread over a number of sites, or those who have undergone a number of significant changes between phases.

Zenergi’s ESOS service manages the whole data collection and reporting process, meaning you’ll have qualified and registered lead assessors on hand to review and guide the process right through to compliance, while also identifying how you can improve energy efficiency, allowing significant savings on energy spend.

Getting started is easy, simply complete this questionnaire and our team will provide you with a detailed ESOS Phase 3 compliance proposal.

For further information please contact ESOS@zenergi.co.uk.