Ben Brading 5 min read

Energy Savings Opportunities Scheme

The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy efficiency assessment programme in the UK, requiring large businesses to identify energy-saving opportunities.

The government estimates that measures adopted because of the scheme save 1.65 TWh of business energy consumption annually.

The ESOS rules and requirements published on the Gov.uk website are over 36,000 words long, making the scheme challenging to understand. This guide aims to provide a digestible summary of the Energy Savings Opportunity Scheme’s criteria, rules, and requirements. Here’s what we cover:

Who needs to comply?
The compliance process for ESOS
Key ESOS dates
ESOS compliance services

Who needs to comply?

Any business or charity in the UK that meets one or both of the following criteria in an annual accounting period preceding a qualification date must participate in ESOS:

Employs 250 or more people
Annual revenue exceeding £44m and a balance sheet total over £38m

The criteria apply to individual entities within a corporate group rather than the consolidated financial statements.

If a corporate group contains one entity that meets the qualifying conditions, then all UK operations within the group must participate in ESOS.

The compliance process for ESOS

Here is a summarised step-by-step process required for businesses participating in the Energy Savings Opportunity Scheme.

Step 1: Measure total energy consumption

Calculate your total business energy consumption in the UK over a reference period of 12 months. The reference period must overlap with the qualification date.

Business energy consumption can be measured in either:

Kilowatt-hour (kWh): Energy consumed, as measured by business electricity meters and business gas meters at each of your sites.
Energy spend (£): The total business electricity prices and business gas rates incurred during the reference period.

The calculation is to used identify which sites or assets consume the most energy. Types of energy include electricity, gas, fuel for transportation, and other combustible fuels.

💡 We recommend conducting this assessment in kWh, as this analysis will be required for later steps.

Step 2: Identify areas of significant energy consumption

The next step is to identify areas of energy consumption that need to be audited. These are referred to as “areas of significant energy consumption.”

The areas of significant energy consumption must collectively account for at least 95% of your total energy consumption.

The remaining 5% of energy consumption can be excluded from the energy audit.

Step 3: Select and calculate energy intensity ratios

The Energy Savings Opportunity Scheme requires choosing energy intensity ratios appropriate to your business to benchmark energy efficiency.

The following table provides examples of the most common energy intensity ratios used in ESOS:

Energy Intensity Ratio	Description	Ratio Type	Examples of Businesses
Energy per square metre (kWh/m²)	Tracks energy consumption based on the size of the building or workspace.	Building	Offices, retail stores, warehouses
Energy per employee (kWh/employee)	Useful for office-based organisations to relate energy use to workforce size.	Building	Corporate offices, call centres, consulting firms
Energy per unit of production (kWh/unit)	Measures energy use per item manufactured, ideal for production lines.	Industrial Processes	Factories, food processing plants, pharmaceutical plants
Energy per customer serviced (kWh/customer)	Reflects energy use per interaction with or service delivered to a customer.	Industrial Processes	Supermarkets, banks, healthcare clinics
Energy per kilometre travelled (kWh/km)	Tracks energy consumption relative to the distance travelled by a vehicle or fleet.	Transport	Logistics companies, public transport, delivery services

Your total energy consumption should be disaggregated into buildings, transport, and industrial processes, with a suitable energy intensity ratio selected for each.

The energy intensity data submitted by your business in the ESOS report will serve as a baseline to measure future performance.

Step 4: Choosing a compliance method

Choose a compliance method for each area of significant energy consumption. The following are the ESOS compliance options:

The performance of an ESOS-compliant energy audit
ISO 50001 certification
Display Energy Certificates (DECs) with accompanying advisory reports
A Green Deal assessment

ESOS compliance can be achieved using a combination of these methods, provided they collectively cover at least 95% of the business energy consumption identified in Step 2.

For the remaining steps, we will assume your business has chosen to conduct an ESOS-compliant energy audit.

Step 5: ESOS-compliant energy audit

The ESOS does not mandate specific methodologies for conducting your business energy audit, but as a minimum, it must include:

Collection of energy consumption data.
Analysis of energy consumption at all areas of significant energy consumption, using half-hourly meter or smart business energy meter data where possible.
Site visits by the energy auditor. It is unnecessary to visit every site, but the sites visited must be representative of the unvisited sites in your property portfolio.
Identifying and formally recommending practical and cost-effective energy-saving measures, including a cost-benefit analysis for each.
Recommending a programme for implementing identified energy-saving opportunities.

For a full breakdown of the audit process, read our comprehensive guide to the business energy audit.

Step 6: Preparing an ESOS report

Businesses participating in the Energy Savings Opportunity Scheme must prepare a report detailing their ESOS assessment before the compliance date.

The ESOS report must, at a minimum, include:

Calculation of the total energy consumption.
A breakdown of the areas of significant energy consumption, including calculations of energy intensity ratios for each.
An explanation of the number of sites visited during the audit and the visit date for each.
Justification for why the sites visited were considered representative and how they account for the unvisited sites.
A summary of the energy-saving measures identified, including a quantification of estimated savings and costs associated with implementation.
An estimation of energy savings achieved since the previous ESOS assessment.
Board-level sign-off, including details of the lead assessor and other employees involved in the assessment.

Step 7: ESOS submission

Once you have completed your ESOS assessment and report, you must submit a compliance notification to the Environment Agency via the ESOS reporting portal.

The Environment Agency publishes most of the submitted details, so it is important to exclude any commercially sensitive information.

You are not required to submit your full ESOS report. Instead, you must provide a high-level summary using the online form.

A board-level director at your organisation must formally approve the ESOS report within the system.

Step 8: ESOS action plan and annual progress submissions

All mandatory participants in ESOS must produce an action plan following their ESOS submission, which is also submitted to the Environment Agency.

The action plan outlines which energy audit recommendations your business plans to implement over the next four years (before the next ESOS assessment).

💡 There is no regulatory requirement to implement any recommendations from the ESOS assessment.

On the anniversary of the compliance date, your business must also submit an annual progress report.

Key ESOS dates

Below is a summary of the key deadlines and dates for the current and upcoming compliance periods under ESOS:

Compliance period three:

Qualification date: 31 December 2022
Compliance period: 6 December 2019 to 5 December 2023
Compliance date: Extended to 5 June 2024 (originally 5 December 2023)
Annual progress period one: 6 December 2024 to 5 December 2025
Annual progress period two: 6 December 2025 to 5 December 2026

Compliance period four:

Qualification date: 31 December 2026
Compliance period: 6 December 2023 to 5 December 2027
Compliance date: 5 December 2027
Annual progress period one: 6 December 2028 to 5 December 2029
Annual progress period two: 6 December 2029 to 5 December 2030

ESOS compliance services

Energy specialists, including business energy suppliers, offer various services to help businesses navigate the Energy Savings Opportunity Scheme, including conducting the required energy audits.

We specifically recommend the following trusted suppliers that we partner with for our business energy comparison service:

E.ON business energy: Compliance services, including regular audit assessments conducted by their team of qualified experts.
SSE business energy: The SSE compliance team includes fully qualified in-house ESOS Lead Assessors.