The document summarizes an upcoming workshop on the Energy Savings Opportunity Scheme (ESOS) in London. It provides objectives for the workshop, an agenda of topics to be covered, and a working agreement. The workshop will build awareness of ESOS and gather feedback to inform guidance. Topics will include an overview of ESOS, presentations from DECC and the Environment Agency, and discussions of approaches businesses are taking to comply. The working agreement establishes ground rules for participation and note taking.

1. Monday 16th March
The Energy Savings
Opportunity Scheme
London Workshop

2. Objectives To build awareness of the Energy Savings
Opportunity Scheme (ESOS).
To gather feedback to inform the Environment
Agency’s guidance.
An opportunity for you to share learning and best
practice.

3. What we’ll cover • The ESOS policy background and context
• Presentation by DECC
• An overview of ESOS, and technical details on
qualification, compliance and notification
• Presentation by the EA, Q&A
• The approaches businesses are taking to ESOS
compliance
• Table discussion and plenary

4. Working
agreement
Please turn electronic devices off during sessions
If you need to leave it on, please answer your phone
outside of the room. And put it on silent setting.
Raise your hand to let us know you want to speak
There are many of you, we’ll keep track of who wants
to speak, and try to ensure as many as possible get to
speak.
Use the microphone please, it’s a big room and we
want to make sure everyone can hear.
Help us with our note taking in the discussion
sessions, someone will keep a record of the
discussion - help them ensure it’s accurate.

5. Martin Adams
ESOS Team Leader, DECC

6. Energy Savings Opportunity
Scheme: Context
Martin Adams, ESOS Team Leader

7. “Cost-effective energy efficiency has
the potential to deliver a triple win for
businesses, the environment and the
wider economy […] As part of a
supportive policy framework, ESOS
can support businesses in realising
their energy efficiency potential” – CBI
7 Energy Savings Opportunity Scheme - Emerging Thinking

8. 8 Introduction to the business energy efficiency policy landscape
The current policy package is on track through to 2020 but additional
action is needed to maintain progress after 2020.
Carbon Plan scenarios require energy
efficiency to contribute a reduction in
final energy consumption per capita
between 2011 and 2050 of 21-47%

9. 9 Introduction to the business energy efficiency policy landscape
“We estimate that through socially cost-effective
investment in energy efficiency we could be
saving 196TWh in 2020, equivalent to 22 power
stations”

10. EU Energy Efficiency Directive
• Intended to put EU back on track to meet target to reduce primary energy
consumption by 20% by 2020 compared to business-as-usual projection.
• The Directive became EU law in November 2012. UK completed
transposition in June 2014.
Energy Audits (Article 8)
• Requires all member states to introduce mandatory energy auditing
programmes for large enterprises…
10 Energy Savings Opportunity Scheme

11. Key facts about ESOS
What is ESOS?
• UK-wide mandatory energy measurement and auditing scheme
• Introduced in response to EU Energy Efficiency Directive – aims to help achieve latent
cost-effective energy efficiency potential
Who must comply?
• Large undertakings and large corporate groups across the UK.
• Target highest UK-parent but allow disaggregation
And by when?
• Qualification date - 31 December 2014
• Compliance date – 5 December 2015
• Audits must be repeated every four years (i.e. second phase ends 2019)
11 Energy Savings Opportunity Scheme - Emerging Thinking

12. The consultation
12 Energy Savings Opportunity Scheme: Emerging Policy Thinking
500 300
150
Met with over 500
stakeholders
(and given presentations &
webinars to many more)
From over 300
organisations
Received 150
written consultation
responses

13. Key messages from consultation
Keep it simple, and understandable yet make it meaningful
• Respondents want the scheme to provide outputs that are relevant to each business
• Respondents want ESOS to add value and identify real measures that can be
implemented
Avoid duplication in existing regulation and requirements
• There a range of energy efficiency policies operating in the UK – ESOS needs to fit
• Take advantage of alternative routes to compliance – e.g. ISO50001
Minimise costs
• Allow discretion on the number of site visits required within audits
• Using internal team members for their knowledge and skills
• Only having lead auditor requiring accreditation under the scheme – but need for
whole audit team to be of sufficient quality to ensure that output is meaningful
13 Energy Savings Opportunity Scheme - Emerging Thinking

14. 14 Energy Savings Opportunity Scheme
0
50
100
150
200
250
300
350
400
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Estimated energy bill savings (£m) for ESOS participants, split by sector
Other Transport Industrial Commercial
1real 2014 prices
ESOS is estimated to have a £1.6bn net benefit to the UK. This will
primarily be felt by business through lower bills

15. Thank you

16. Jo Scully
ESOS Project Manager,
Environment Agency

17. ESOS Overview

18. Key Dates
Qualification Date 31/12/14
Don’t need to register or tell us you qualify
Compliance Date 05/12/2015
Tell us you have complied online via webpage
And every 4 years thereafter
18

19. 19
What are ‘large undertakings’?
Large undertaking is organisation that is:
 Registered in the UK and
 has at least 250 employees; or
 has an annual turnover in excess of 50 million euro
(£38,937,777), and an annual balance sheet total in excess of
43 million euro (£33,486,489)
 An overseas company with a UK registered
establishment which has 250 or more UK
employees (paying income tax in the UK).
 Is part of a corporate group which includes an
undertaking which meets the above criteria

20. Who isn’t in ESOS
Organisations which are subject to insolvency
procedures
Organisations defined as a contracting authority
in the Public Contracts Regulations 2006
20
Contracting Authority
• E.g.
• Government Departments
• Councils
• Fire
• Police
Organisation not having an industrial or
commercial character, and
• financed wholly or mainly by another
contracting authority;
• subject to management supervision by
another contracting authority; or
• more than half of the board of directors
or members of which, or, in the case of
a group of individuals, more than half of
those individuals, are appointed by
another contracting authority;

21. 21
Requirements
1. Conduct ESOS assessment
 Where not fully covered by ISO50001 certification
2. Conduct energy audits
 Where not covered by ISO50001 certification, Green Deal
Assessments (GDAs) or Display Energy Certificates (DECs)
(partial or full coverage)
3. Identify energy savings opportunities
4. Use a lead assessor to either do or review points 1 to 3 above
(unless fully covered by ISO50001)
5. Get a director to sign off that they have seen the recommendations
of the work
6. Notify the Environment Agency of ESOS compliance

22. 1. Conduct an ESOS assessment
Identify total energy consumption (buildings, installations, transport)
Common units (either cost or energy measurement unit)
For a 12 month reference period covering the qualification date
90% of your total energy consumption = Areas of Significant Energy
Consumption
Determine coverage by ISO50001, GDAs, DECs, existing audits
which meet the ESOS criteria
Determine additional ESOS audits that need to be undertaken prior to
5/12/2015
22

23. 2. Conduct ESOS audits
Compliant audits:
Use12 months’ verifiable data
Analyse your energy consumption and energy efficiency
Identify practicable ways in which you can improve energy efficiency
Recommend cost effective ‘energy saving opportunities’
Identify the estimated costs and benefits of the ‘energy saving
opportunities’ recommended
Where 12 months data is not used or consumption profiling is not
undertaken justification must be provided.
23

24. 3. Identifying savings opportunities
from ESOS audits
24
Use life-cycle cost analysis to determine cost
effectiveness rather than simple pay back
period where possible
Identify recommendations within your control
No requirement in the regulations to
implement the identified savings

25. 4. ESOS Lead assessors
Individuals that belong to an ‘approved
register’ = lead assessors
Approved bodies/registers on ESOS webpage
Lead assessors can be internal or external
Lead assessor reviews the work but can use
analysis from others.
25

26. 5. Director Sign off
26
Show recommendations of the assessment to
a board level director
2 directors if lead assessor is internal
No specific format required
Director confirms they have reviewed the
findings

27. 6. Notifying the EA
27
Online notification form accessed from ESOS
page on GOV.UK
Provide basic organisation details – not
energy data or improvements identified
Needs to be submitted by 5 Dec 2015 to be
compliant.

28. Keep an evidence pack
Cost Effective Energy Savings Opportunities
Identified
Details of your ESOS assessment and audits
(where applicable)
Certifications for alternative compliance routes
Details of any areas where you are not fully
compliant with the rules
Record of your directors & lead assessors sign off
28
There is no
prescribed
format for this

29. Further Detail on ESOS

30. Employees
30
Employees = anyone with a contract of employment
regardless of hours
find the number of persons employed under contracts of service by the
company for each month of the financial year (whether for the whole
month or part of it)
add together the monthly totals
divide by the number of months in the financial year
It’s not the number on the 31 Dec, it’s the number based
on the average for the accounts ending on or in the 12
months preceding that date.

31. Business Type
31
Trade/business of organisation is irrelevant
Amount of energy the organisation uses is irrelevant
If you meet the criteria of an undertaking and you meet
the ESOS qualification criteria you are in ESOS
a body corporate or partnership, or
an unincorporated association carrying on a trade or business, with or
without a view to profit.

32. Balance Sheet Total
32
Called up
share
capital not
paid
Fixed
assets
Current
assets
Pre-
payments
and
accrued
income
“The aggregate of the amounts shown as
assets in the company’s balance sheet”
(that is before deducting both current and
long-term liabilities).
Where an undertaking is not required under the Companies Act 2006 to produce
individual accounts they must estimate the annual turnover and annual balance
sheet total for the undertaking for a 12 month period including the qualification
date, to determine their balance sheet total.
From accounts required under Section 394
or 395 of the Companies Act 2006 (Duty to
prepare individual accounts or Individual
Accounts: application accounting
framework)

33. Organisational Status
33
“Where, in any accounting period, an undertaking is a large
undertaking (or a small or medium undertaking), it retains that
status until it falls within the definition of a small or medium
undertaking (or a large undertaking, as the case may be) for
two consecutive accounting periods.”
2010 2011 2012 2013 2014 In ESOS?
Company A Over threshold
   No
Under
threshold  
Company B Over threshold
   Yes
Under
threshold  

34. Public Contracts Regulations
Only undertakings subject to these regs are
out of ESOS i.e. a contracting authority
If there are other undertakings in the group
which are not subject to these regs and one of
them meets the qualification thresholds they
will be required to participate in ESOS
34

35. Insolvency proceedings
Undertakings subject to insolvency
procedures are out of ESOS
If there are other undertakings in the group
which are not subject to insolvency
procedures and one of them meets the
qualification thresholds they will be required to
participate in ESOS
35

36. Changes to structure after
qualification
36
Changes to organisation size/structure etc after the
qualification date do not affect qualification.
Once you are in you are in
Any organisation sold by a qualifying organisation
between 31 Dec 2014 and 5 Dec 2015 needs to comply
with ESOS (either with old owner, new owner or on its
own)

37. Trust Provisions
Supply contract agreement is crucial to the
determination of whether the trust assets
are in ESOS.
Is the supply contract with an undertaking
that qualifies for ESOS?
Yes – the asset supplies will be in ESOS (see the
guidance)
No – the asset supplies will not be in ESOS.
37

38. Joint Ventures
If they are a true JV they assess their own
qualification and participate separately
True JV =
no organisation holds a majority of the voting rights in the undertaking, or
no organisation is a member of the undertaking and has the right to appoint
or remove a majority of its board of directors, or
no organisations has the right to exercise a dominant influence over the
undertaking—
(i) by virtue of provisions contained in the undertaking's articles, or
(ii) by virtue of a control contract, or
no organisation is a member of the undertaking and controls alone, pursuant
to an agreement with other shareholders or members, a majority of the voting
rights in the undertaking
38

39. Disaggregation and aggregation
Groups can allow subsidiaries (or groups of
subsidiaries) to participate separately
‘disaggregate’
Keep written agreement
>1 highest UK parent = separate participants
Unless they choose to participate together ‘aggregate’
Keep written agreement
39

40. Data time periods
40
Total energy consumption data
12 months data covering 31/12/14
Supplies for all assets covering a specified 12 month period
Can use £ or common energy unit
Purpose: To determine which assets will need to be covered by audits or
alternative routes to compliance
Data for audits
12 months data starting from as far back as 6 Dec 2010
Audits can have been undertaken between 6 Dec 2011 and 5 Dec 2015
Assets don’t need to have been audited at the same time
begin no more than 24 months before the start of the energy audit
Use energy units for analysis
Purpose: To determine energy savings opportunities

41. Total Energy Consumption
Include all assets/activities held on 31 Dec
2014
Except if selling assets between 31 Dec
2014 and 5 Dec 2015 they do not need to
be included in total energy consumption
calculation or consequently be audited.
41

42. Areas of significant energy
consumption and audits
Flexibility about which energy is in the 90%
Could exclude all of one fuel type; or
Certain assets/activities; or
A combination
42

43. Verifiable data
Data you can prove
Invoices, meter readings, stock records, AMR readings
If you can’t obtain verifiable data of energy
use or spend you should:
explain why in your evidence pack
use a reasonable estimate derived through calculation
(based on other verifiable data, if possible), and show
how you got this figure
keep records in your evidence pack
43

44. Alternative compliance routes
DEC/GDA/ISO 50001 coverage mean that you
don’t have to meet articles 26 and 27 of the
regs
Energy use covered by one of these three schemes is
fully compliant
You don’t have to do a cost benefit analysis for the
energy saving opportunities for that energy use (great if
you want to though!)
44

45. Unconsumed supplies
Unconsumed supply rule can apply if
Energy is supplied by a participant to another organisation
The energy can be measured or reasonably estimated.
Ultimately we want the organisation with the
control of the energy look for energy saving
opportunities
Doesn’t matter who does the audit as long as it
covers all ESOS supplies
– (i.e. 2 or more qualifying participants could be compliant using
the same audit. They just reference the energy saving
opportunities relevant to them in their evidence pack)
45

46. Site visits
It is not necessary to visit every site.
Regardless of the number of site visits,
organisations need to ensure they have
collected and analysed data for all their areas
of significant energy consumption.
% of site visits required is not prescribed in
legislation or guidance; it is up to your
organisation and lead assessor to agree what
is appropriate for your organisation.
46

47. Transport
Should include fuel used in:
company cars on business use
fleet vehicles which you operate on business use
personal cars on business use
private jets, fleet aircraft, trains, ships, or drilling platforms which you
operate
Fuel not included:
Fuel associated with train travel/flights/taxi journeys of your
employees where you do not operate the train/aircraft/taxi
Fuel associated with transportation of goods where you subcontract a
firm or self employed individual to undertake this work for you (this
fuel would be included in the subcontractor's total energy
consumption calculation if they have qualified).
47

48. Auditing Methodologies
No prescribed methodology has to be used to
comply with ESOS
No specific reporting templates you have to
use
Best practice methodologies
BS EN 16247 and the accompanying series
ISO 50002 and the accompanying series
48

49. Lead Assessors
If you are an energy manager we would
encourage you to become a lead assessor
Lead assessors must review a participant’s
ESOS compliance
Participant is liable for compliance
49

50. Director Sign off
Director can be from any of the undertakings
in the participant group
Keep written evidence (e.g. the email).
They don’t have to be an expert in energy
themselves.
No specific format for the information to be
provided to them (e.g. could be a
presentation, report, summary briefing
whatever suits)
50

51. 51
Do I qualify?
Work out whether you meet the employee
and financial thresholds using accounts
prepared in accordance with 394 and 395
of Companies Act
What assets do
I need to audit
?
Calculate total energy consumption
calculation and deduce significant energy
consumption (90% of total) to deduce
assets which need to be compliant
What work
have I already
done towards
my
compliance?
Existing audits completed 6 Dec 2011 or
after
DECs, ISO50001, GDAs
What new work
do I need to do
towards
compliance?
New ESOS audits (analyse data from no
more than 24 months ago).

52. Jo Scully
ESOS Project Manager,
Environment Agency
Martin Adams
ESOS Team Leader, DECC
Q&A

53. PLEASE
BE BACK
HERE IN
FIFTEEN
MINUTES
•Coffee

54. Notification process

55. 55
www.gov.uk/energy-savings-opportunity-scheme-esos

72. ESOS WEBPAGE:
https://www.gov.uk/energy-savings-opportunity-scheme-esos
ESOS Guidance:
https://www.gov.uk/government/uploads/system/uploads/attachm
ent_data/file/323307/ESOS_Guide_FINAL.pdf
ESOS Regulations:
http://www.legislation.gov.uk/uksi/2014/1643/contents/made
ESOS Helpdesk
esos@environment-agency.gov.uk
72

73. 73
Non-compliance ESOS Regulation Penalties
Failure to notify Regulation 43 A fixed penalty of up to £5,000
An additional £500 for each working day starting on the day after service of the
penalty notice until the notification is completed, subject to a maximum of 80 days
Publication
Failure to maintain
records
Regulation 44 A fixed penalty of up to £5,000
The cost to the compliance body for undertaking sufficient auditing activity to confirm
that an organisation has complied with ESOS
Publication
The penalty notice may specify steps to remedy the breach.
Failure to undertake an
energy audit
Regulation 45 A fixed penalty of up to £50,000
An additional £500 for each working day starting on the day after service of the
compliance notice, until the breach is remedied, subject to a maximum of 80 days
Publication
The penalty notice may specify a requirement to undertake an ESOS Assessment.
Failure to comply with a
compliance notice, an
enforcement notice or a
penalty notice
Regulation 46 A fixed penalty of up to £5,000
An additional £500 for each working day starting on the day after service of the
penalty notice, until the breach is remedied, subject to a maximum of 80 days
Publication
False or misleading
statement
Regulation 47 A fixed penalty of up to £50,000
Publication

74. Table discussions

75. Table discussion
At your tables:
• agree a discussion manager/leader
• agree a recorder/time keeper
• introduce each other
Use the information sheets provided to answer
the questions on the worksheet
You have 45minutes
We’ll share key questions with the panel
afterwards
They will also be circulating among you to clarify
issues

76. Questions
•What’s your approach to
compliance?
•What challenges do you
anticipate in complying?
•What advice would you give
others who are working towards
compliance?

77. Plenary

78. Thank you