ESOS compliance and the metering behind it

The Energy Savings Opportunity Scheme (ESOS) is the UK's mandatory energy assessment for large undertakings. Each phase lasts four years. In each phase, a participant calculates its total energy use, audits the areas that use most of it, identifies cost-effective savings, notifies the scheme administrator and reports progress against an action plan. This guide follows the GOV.UK phase 4 guidance published on 30 July 2026, which reflects the ESOS Regulations 2014 as amended in 2026. The guidance changes between phases, so check the current version before you plan.

Who qualifies

A UK undertaking is large, and in scope, if on the qualification date it employs 250 or more people, or it has an annual turnover above £44 million and an annual balance sheet total above £38 million. Both financial limits must be exceeded. If one undertaking in a corporate group qualifies, its whole UK group takes part. ESOS sets its own size test, so do not take the size class from the Companies Act accounts.

The Environment Agency is the scheme administrator for the whole UK. The regulator depends on the registered office: the Environment Agency in England, Natural Resources Wales, the Scottish Environment Protection Agency and the Northern Ireland Environment Agency. The Secretary of State for Energy Security and Net Zero regulates organisations whose activities are mainly offshore. Failure to undertake an energy audit carries a civil penalty of up to £50,000, plus up to £500 for each working day for up to 80 days. Failure to notify carries up to £5,000 plus the same daily penalty, and a false or misleading statement up to £50,000. Each penalty can also include publication of the organisation's name and the breach.

Key dates

The first phase 3 progress update was due by 5 December 2025. The December 2026 update is the last phase 3 deadline. A board-level director (or equivalent) signs off each update, and the participant submits it through the MESOS online service. The regulators do not issue penalties for a missing action plan or progress update, but the scheme administrator publishes the failure.

What the assessment requires

For phase 4, a participant must:

1. Calculate total energy consumption over a reference period of 12 consecutive months. The period must include 31 December 2026 and end before 5 December 2027. It covers buildings, industrial processes and transport, including road vehicles, vessels, aircraft and trains that the organisation operates or fuels.
2. Identify the areas of significant energy consumption, which together make up at least 95% of the total. The remainder, 5% at most, is de minimis and needs no audit. Alternatively, audit the total.
3. Audit those areas, or cover them with an ISO 50001 energy management system. An audit uses verifiable data over 12 months where reasonably practicable, and includes visits to sites that represent how the organisation uses energy. The audit's 12 months need not be the reference period.
4. Calculate at least one energy intensity ratio for each purpose: buildings, transport, industrial processes and other uses. Typical ratios are kWh per m² of gross internal area, kWh per tonne-mile and kWh per unit of output.
5. Review the phase 3 action plan. Identify each measure that has not been implemented, and will not be implemented, by 5 December 2027, and explain why.
6. Have an ESOS lead assessor review the assessment. This is not required when total consumption is below 40,000 kWh, or when ISO 50001 certification alone covers the total or the significant energy consumption.
7. Have one or more board-level directors review the findings and sign off the assessment. Every participant needs this.
8. Notify the scheme administrator through MESOS.

For the ISO 50001 route, the certificate must be issued on or after 6 December 2023 and be valid on 5 December 2027. When it covers the total or the significant energy consumption, the participant does not need an ESOS report or a lead assessor. The routes can be combined: ISO 50001 for the part of the organisation that the certificate covers, and ESOS audits for the rest. A combined route needs a lead assessor. Display Energy Certificates and Green Deal Assessments are no longer routes to compliance in phase 4. The ISO 50001 guide explains the standard.

In the EU, the recast Energy Efficiency Directive sets the audit duty by energy use instead of company size: an audit above 10 TJ a year (about 2.8 GWh), and a certified energy management system above 85 TJ.

Where metering helps

ESOS does not require submetering. Where verifiable data is missing, the guidance requires a reasonable estimate, based on other verifiable data where possible. The participant records the reason and the method, and reports the use of estimates in the notification. The guidance lists automatic meter reading, smart meter data and half-hourly meter data as verifiable sources. It names a shared supply with no submetering as a typical reason to estimate.

A site with one half-hourly electricity meter therefore has verifiable data for the total and estimates for every split below it. The audit rests on those estimates, and so does each saving in the action plan. Submeters change that at each step:

Record submeter data at 30 minutes or less, so each interval lines up with the fiscal half-hourly data. Each month, compare the sum of the submeters with the fiscal total over the same half-hours. The remainder must be positive and steady. A negative remainder usually means a circuit is counted twice, or a current sensor is on the wrong phase or has the wrong ratio. A step change in the remainder means a new load on an unmetered circuit, or a meter that stopped reporting. A meter that stops reporting must show a gap, not zero, or the remainder looks like a saving. The reconciliation guide covers the checks in detail.

A worked example

A food manufacturer uses 6,200,000 kWh in its reference period. It has one half-hourly electricity supply, one gas meter for its boilers and a diesel delivery fleet. Submeters go on the four largest electrical loads.

The six identified areas total 5,950,000 kWh, or 96.0% of the total. The unmetered 4.0% is inside the 5% de minimis limit.

The site could reach 95% without a single submeter, by declaring all 3,400,000 kWh of electricity as one area. The audit would then divide it with estimates. From nameplate data, two 90 kW compressors at a 60% load factor for 6,000 hours a year come to 648,000 kWh. The submeter records 900,000 kWh, because one compressor runs through each weekend to supply leaks. Its profile shows 55 kW from Saturday 14:00 to Monday 06:00, with no production. Over 40 hours a week for 52 weeks, that is 114,400 kWh a year. It is the first measure in the action plan, and the same submeter proves the saving in the progress updates. The savings guide explains how to adjust the baseline for production.

Gas volume from the fiscal meter converts to energy as m³ × 1.02264 × calorific value (MJ/m³) ÷ 3.6. The gas m³ to kWh calculator does this conversion. Fleet diesel comes from fuel card litres, converted to kWh with the calorific values in the UK government conversion factors. The carbon emissions calculator uses the same factors.

Timing the reference period and the audit data

ESOS uses two 12-month windows. The reference period applies to total energy consumption, the areas of significant energy consumption and the energy intensity ratios. It must include 31 December 2026, end before 5 December 2027, and be the same 12 months for every supply. Calendar 2026 works, and utility bills and fiscal half-hourly data cover it.

Each audit uses its own 12 consecutive months of data. That period must begin no earlier than 6 December 2022, and no earlier than 24 months before the audit starts. It must end by 5 December 2027. Different audits can use different periods. Submeters installed in October 2026 can therefore give a full measured year, 1 October 2026 to 30 September 2027, for the audit of the areas they cover.

With a calendar 2026 reference period, the split of the total by purpose still needs estimates for the nine months before the submeters. A reference period of 1 October 2026 to 30 September 2027 also includes 31 December 2026, and puts both windows on the same measured year. It leaves about nine weeks for the audit report, the lead assessor review and director sign-off before 5 December 2027.

An audit can use a shorter period of verifiable data, or a reasonable estimate for the 12 months. The participant must then record the reasons, and must notify the use of an estimate. Choose the periods before you install, and plan the audit dates backwards from the deadline.

Metering for ESOS with EpiSensor

ZEM electricity monitors submeter the boards and plant items. A ZPC pulse counter reads the pulse output of an existing gas or water meter. The devices report over the Zigbee mesh to a Gateway, so no data cable runs back to each panel. A ZEM ships with its current sensors connected and calibrated, and Class 0.5S to IEC 62053-22 applies to the meter and its sensors together.

Edge on the Gateway keeps the history on site. The Data page exports the loaded chart as CSV, with a timestamp in milliseconds for each row and a blank cell, not a zero, for a missing reading. The export holds the chart as loaded, so check the time range and aggregation before you send it to an assessor. Edge can also send the readings over MQTT or HTTPS to the energy platform that the site already uses. EpiSensor hardware does not meter vehicles, so fleet fuel stays in the fuel card records.