ESOS (ENERGY SAVINGS OPPORTUNITY SCHEME)
The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment and energy efficiency scheme for all large UK-based undertakings and their corporate groups. It is governed by the Environment Agency and requires qualifying organisations to measure their energy consumption and identify energy-saving opportunities.
Overview of ESOS Requirements
ESOS is structured as a four-year compliance cycle, with all qualifying companies required to submit their energy audit findings and associated documentation for each phase.
For ESOS Phase 3, all submissions were due by 6 August 2024, and the scheme remains, at present, an "opportunity-based" programme. This means there is no legal obligation to implement the energy-saving measures identified in the audit. However, new reporting requirements introduced in Phases 3 and 4 are intended to encourage greater follow-through on recommended actions.
Key Reporting Requirements
1. Annual Action Plan
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An Action Plan must be submitted within 12 months following the end of each compliance period
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For ESOS Phase 3, the deadline for submission is 5 December 2024
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The plan must outline the measures the organisation intends to implement to improve energy efficiency during the period 6 December 2023 to 5 December 2027
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The Action Plan must be approved by a board-level director (or equivalent) and submitted through the MESOS online reporting platform
2. Annual Progress Updates
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Organisations must submit two annual progress updates during each compliance period:
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First update: due 05 December 2025
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Second update: due 05 December 2026
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These updates must report progress against the measures outlined in the Action Plan and cover the 12 months preceding each deadline
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Progress updates are submitted via the MESOS reporting system
ESOS Phase 4 – Upcoming Compliance Cycle
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Compliance Date: 5 December 2027
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Qualification Date: 31 December 2026
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The energy reference period must include the date 31 December 2026. The earliest permissible reference period for data collection is 01 January 2026 to 31 December 2026
Although the compliance deadline is in 2027, early data collection and audit planning is strongly recommended to ensure timely compliance. It’s important to note that while the reference period must meet the above date criteria, the audit itself can be conducted at any point during the compliance period (6 December 2023 to 5 December 2027).
Who Qualifies for ESOS?
An organisation qualifies for ESOS if it meets at least one of the following criteria on the qualification date:
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250 or more employees, OR;
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Annual turnover exceeding £44 million and an annual balance sheet total exceeding £38 million
Eligibility is determined by financial and employment data over two consecutive accounting periods within the compliance period. For Phase 4, the qualification date is 31 December 2026.
Total Energy Consumption (TEC) Requirements
ESOS reporting must include the Total Energy Consumption (TEC) across all areas of the organisation’s operations, including:
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Energy used in buildings
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Industrial processes
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Transport activities
Only energy purchased and used directly by the company or group must be included. Sub-metered energy recharged to tenants is excluded from the TEC, provided it is separately metered and billed.