Established by the then Department of Energy and Climate Change (DECC) as a response to Article 8 of the EU Energy Efficiency Directive, ESOS is a mandatory scheme which targets large UK businesses and designed to increase engagement with energy management systems and reduce consumption. The scheme is mandatory for large undertakings, however, the benefit for smaller businesses is also substantial. ESOS is now in its fourth phase, which started on the 6th December 2023 and concludes on the 5th December 2027. Introduction of a mandatory energy action plan, which outlines a road map for continuous energy improvement, must be submitted by 5th March 2025, with interim updates required on both 5th December 2025 & 2026.
Who Must Participate?
Participants must report on all energy consumption through buildings, industrial processes and transport over a 12-month period within certain deadlines. Reporting must be in line with ESOS standards and approved by a lead ESOS assessor. UK businesses which must partake have been defined as:
- 250 employees or more
- Has less than 250 employees but a turnover of more than £44 million and a balance sheet more than £38 million
- Being part of a larger corporate group
Penalties for Non-Compliance
- Disclosure of client information on the Environment Agency website
- £5,000 fine for failure to meet deadlines or adequate standards
- £50,000 fixed penalty for failure to conduct an ESOS assessment
- Fixed penalties of £5,000 for failure to comply with enforcement notices
- Up to £50,000 fines for making false statements
How LGE Can Help?
LGE offers a comprehensive range of consultancy services, with our scope of services for ESOS being modular and following the below three steps:
- Pre-Desktop Analysis- A structured approach which targets the efficient compliance route through an initial meeting to establish all data, understanding organisational structure and boundaries and an examination of 12-month reference period
- Survey- Examines metering equipment and where energy is consumed, reviews general energy management policies and potential improvements to building fabric, studies existing heating arrangements, appraises existing energy controls and audits electricity usage
- Post-Survey- An ESOS compliant report will be provided to examine all energy saving options, with clear recommendations on a spreadsheet which are divided into low-cost and medium-high cost energy saving measures
ESOS Action Plan & Annual Updates
Phase 4 of ESOS has now introduced an ESOS action plan and annual updates. The deadline for the action plan, 5th March 2025, has now passed. If you have not completed your action plan, then act urgently and contact LGE today. The annual updates are due on the 5th December 2025 & 2026. Failure to submit will result in businesses being recorded and published as an undertaking which does not intend to carry out energy saving action.
The action plan communicates how participants will implement energy savings opportunities, whilst the updates communicate whether targets are being met. Both must be submitted through the compliance notification system and the new ESOS IT system, with a company director confirming they have considered the submission and satisfied with its contents.
LGE can provide support through:
- Producing an action plan which communicates how a business intends to reduce energy consumption and when it intends to do it
- Explaining whether recommendations were made through ESOS assessments, what savings are expected to be achieved and how savings were estimated
- Producing annual interim updates which communicate on the actions taken during the 12-month period and confirmation of whether the actions were implemented by the set date
- Estimating savings achieved and how savings were estimated
LGE’s comprehensive expertise in handling ESOS for clients in its previous phases means that we can ensure you are ahead of the curve when it comes to phase 4 requirements. To ensure timely submissions, speak to your account manager or contact us at info@lgegroup.com