Changes to the ESOS Regulations
The Energy Savings Opportunity Scheme (Amendment) Regulations SI 2023/1182 enter into force on 29th November 2023 and make important amendments to the Energy Savings Opportunity Scheme (ESOS) Regulations SI 2014/1643.
The ESOS Regulations require all large undertakings, or other undertakings under the same corporate group as a large undertaking, to audit their energy use in four-yearly cycles.
These amendments aim to encourage ESOS participants to go beyond just auditing their energy use and take action on their findings to make energy savings.
Compliance period
The amendments change the compliance date for the compliance period which commenced on 6 December 2019 (Phase 3). ESOS participants do not need to submit their notification of compliance until 5 June 2024 - this was previously 5 December 2023. This new, later compliance date applies in relation to the requirements relating to the:
- publication of information;
- exclusion of assets no longer held on the compliance date;
- period of energy audit;
- ESOS report;
- notification of compliance;
- changes of groups undertakings.
The compliance date relating to:
- compliance with ISO 50001; and
- display energy certificates and green deal assessments,
can be either 5 December 2023 or 5 June 2024, as the participant elects.
It is important to note that these amendments do not change the qualification thresholds for ESOS. The ESOS Regulations and their requirements still apply to all organisations and their corporate groups that were classified as large undertakings on 31 December 2022.
ESOS report
A new chapter on the 'ESOS report' is added, which requires all responsible undertakings to produce an ESOS report in relation to each ESOS assessment. This report is a written record of the energy audit conducted by the undertaking which must include specified information, including:
- information on the participant's total energy consumption;
- an estimate of energy savings achieved by the participant;
- specific information as specified in the Full Text of Schedule 3 to the ESOS Regulations.
The new provisions also require:
- a responsible undertaking to estimate energy savings made by the participant since the preceding compliance date; and
- that responsible undertakings share relevant information with group undertakings.
ESOS action plan
The amendments insert a new Part 6A on ESOS action plans and progress updates.
All ESOS participants, even those participants relying wholly or partly on an alternative compliance route, must produce an ESOS action plan and ESOS progress update.
An ESOS action plan is a written record that sets out:
- proposed measures to improve energy efficiency before the relevant compliance period ends;
- whether the measures were recommended by an energy audit;
- intended dates for implementing measures;
- estimates of the total energy savings expected to be achieved during the relevant compliance period ends through implementing the identified energy saving measures;
- estimates of the total energy savings expected to be achieved in relation to each organisational purpose;
- methods used to calculate estimated energy savings;
- if applicable, a statement that there is no measure to improve its energy efficiency that the participant proposes to implement before the end of the relevant compliance period.
Responsible undertakings must produce an ESOS progress update, which is a written record identifying any action taken to implement measures to improve the participant’s energy efficiency. It must include:
- information identifying any measure set out in the ESOS action plan that they have implemented;
- information on any measure set out in the ESOS action plan that they have not implemented by a specified date;
- an estimate for the reduction in energy consumption that has been (or will be) achieved during the relevant reporting period, as a result of actions identified in the ESOS progress update.
Other changes
These amendments make numerous other changes to the ESOS Regulations that include:
- extending the requirement that the Environment Agency must publish certain types of information held on the Notification System;
- clarifying that a lead assessor does not need to be appointed by undertakings that consume less than 40,000kWh over the annual reference period;
- inserting a new regulation to provide for how details of estimates used under ESOS must be recorded and notified;
- clarifying that all participants have a duty to calculate total energy consumption;
- updating the definition of “areas of significant energy consumption” to be at least 95% of the undertaking’s total energy consumption and provide a new definition of “significant energy consumption”;
- requiring that in some circumstances a participant’s total energy consumption, or significant energy consumption must be converted into kWh units.
They also insert a new chapter in relation to calculations related to organisational purposes, which require responsible undertakings to:
- identify the proportion of energy consumption that relates to a organisational purpose of transport, industrial processes, buildings and other; and
- calculate an energy intensity ratio for applicable organisational purposes.
Changes are made to:
- specify requirements as to site visits and additional record-keeping in relation to the energy audit;
- extend the requirement to identify energy saving opportunities to require responsible undertakings to conduct further analysis and to identify considerations for implementation of energy saving opportunities and recommend a programme for implementation.
The amendments:
- make changes to extend the information that is required to be included in the evidence pack and in specified circumstances, extend the period that the evidence pack must be held for;
- extend the categories of information that a responsible undertaking is required to include in their notification of compliance;
- clarify that where a lead assessor is not required to be appointed, two responsible officers must be nominated;
- extend the categories of information that a responsible officer is required to confirm;
- apply the requirement to produce an ESOS report to participants relying wholly or partly on an alternative compliance route;
- update the rules in the Full Text of Schedule 2 to the Regulations relating to disaggregation to clarify who is the responsible undertaking for when changes to participant groups occur between the relevant dates for the action plan and progress update;
- replaces the tables in the Full Text of Schedule 3 to the Regulations that provide detail of the information that is to be:
- included in the ESOS report,
- notified to the scheme administrator, and
- published by the scheme administrator;
- update the application of the ESOS scheme to trust assets.
For more information, see the:
- Energy Savings Opportunity Scheme (ESOS) Regulations SI 2014/1643;
- Energy Savings Opportunity Scheme (Amendment) Regulations SI 2023/1182.
