Time to start your ESOS Phase 3 Action Plan: Concept’s top tips

Introduced in Phase 3, a new requirement of the Energy Savings Opportunity Scheme (ESOS) is to submit an ESOS action plan by 5 December 2024.

The plan should outline your strategy for improving energy efficiency and reducing carbon emissions over the compliance period, which runs until 5 December 2027. In this quick guide, we’re breaking down seven things to include in your ESOS action plan.

Key steps in developing your ESOS action plan

1. Evaluate all ESOS recommendations

Your initial ESOS audit will identify several opportunities to reduce energy consumption. While the official guidance suggests that recommended measures should be “practical and cost-effective,” it’s not mandatory to implement every suggestion. However, it’s important to consider each recommendation carefully and document your reasoning for any measures you choose to reject. This documentation can be valuable for future reference and demonstrates that your organisation is taking its ESOS obligations seriously.

2. Clarify implementation timelines

Once you’ve selected the energy-saving measures to implement, a clear timeline must be established for each measure. Some actions may not be suitable for immediate implementation. For example, if an equipment lease is nearing its end, waiting for its renewal might be more efficient.

Your ESOS audit should provide suggested timelines based on factors such as equipment obsolescence, lease renewals, and tenancy agreements. While the suggested timings are not binding, they can help make informed decisions. Your action plan should include a detailed schedule, specifying the month and year you intend to start each action.

3. Include voluntary or mandatory commitments

Beyond ESOS, you might have other energy-saving or emission-reduction commitments, such as Climate Change Agreements (CCAs), the UK Emissions Trading Scheme (ETS), or initiatives like the UN Race to Zero. Including these in your action plan can further demonstrate your organisation’s commitment to sustainability. Clearly differentiate these actions from those recommended by your ESOS audit, but ensure they are documented in your plan.

4. Keep your ESOS action plan realistic

The ESOS rules require you to submit progress updates 12 months after the action plan deadline and again 12 months after that. These updates will be publicly available, so it’s crucial that your action plan is realistic and achievable. Over-promising and under-delivering could damage your organisation’s credibility.

Thorough planning, supported by expert advice if necessary, can help you chart a course of action that is ambitious yet feasible, ensuring significant energy savings without overextending resources.

5. Quantify expected energy savings

Action plans must include an estimate of the energy savings anticipated from each action over the compliance period. For ESOS Phase 3, this means calculating expected savings up to 5 December 2027. These estimates should be based on data from the original audit report or, if you’ve taken an alternative compliance route (such as ISO 50001), from another reliable source. Make sure to clearly state the data source for each estimate to maintain transparency and accuracy in projections.

6. Aggregate and categorise savings for Phase 3

Regulations require that your ESOS action plan includes both an aggregate estimate of total energy savings by the end of Phase 3 and a breakdown of these savings by energy consumption area (e.g., buildings, transport, industrial processes). This breakdown helps paint a picture of where the most significant savings will be achieved and allows for targeted efforts in specific areas.

7. Cite your sources

Your ESOS audit doesn’t have to be your only source of energy-saving recommendations. If your organisation receives advice from other sources, follows an alternative compliance path, or decides to implement measures not included in the audit, you can include these in your action plan. However, it’s essential to clearly state the origin of each recommendation. Additionally, for any actions outside the ESOS recommendations, specify the intended implementation timeline and the projected energy savings.

Annual progress updates

After submitting your action plan, you’re required to provide annual progress updates for the next two years. These updates, due on 5 December 2025 and 5 December 2026, should cover the actions taken over the previous 12 months, whether the measures were implemented as planned, and the energy savings achieved. These updates will be public, and failure to submit them will result in a record indicating no energy-saving actions were taken, which could impact your organisation’s reputation.

What to include in your progress updates:

• A list of energy-saving actions implemented in the past 12 months.
• Any actions that were not implemented and reasons for this.
• Whether each action was completed by its planned deadline.
• An estimate of the energy savings achieved from each action, along with the data source.
• A combined estimate of total energy savings from all actions taken.

If you wish to report additional energy or carbon-saving actions not included in your original action plan, you may do so, providing estimates of the savings achieved.

Support with ESOS Phase 3 action plans

While your action plan may seem like just another compliance requirement, the point is to encourage action on energy efficiency, and in doing so, organisations can reap the long term benefits of lower energy costs.

Your initial ESOS audit will offer valuable insights and recommendations, but don’t hesitate to seek expert advice to ensure your plan is comprehensive and realistic.

Download your free copy of ESOS Action Plans: A Best Practice Guide to unlock the full potential of your ESOS Action Plan and identify measures that pay.

Concept’s consultants include qualified ESOS lead assessors, and we are helping organisations achieve compliance. If you have further questions, don’t hesitate to get in touch.