Mandatory Energy Efficiency Audit Proposals: Deadline Approaches

DECC's ESOS Consultation Paper
DECC’s ESOS Consultation Paper

Until 3 October 2013, The Department for Energy and Climate Change (DECC) has been consulting on the implementation of Article 8 of the EU Energy Efficiency Directive 2012/27/EU which requires the promotion of the availability of high-quality energy audits designed to identify energy-saving recommendations, and imposes an obligation on all Member States to introduce a programme of regular audits for “large enterprises”.

It is proposed that “large enterprises” are those: (i) employing over 250 full-time equivalent employees (ii) with an annual turnover exceeding €50 million and/or an annual balance sheet total exceeding €43 million and (iii) which are registered for VAT/PAYE.

Whilst many organisations may have reviewed energy use in buildings an interesting aspect of the consultation is that the audit must also cover industrial processes and transportation. The extent to which such audits must be disclosed is raised in the consultation and it is not inconceivable that they may form part of company reporting or be disclosable to the public depending on legislative developments in the future.

Energy Audits 

The minimum criteria require energy audits to:-

  • be based on up-to-date, measured, traceable operational data on energy consumption and (for electricity) load profiles;
  • include a detailed review of the energy consumption profile of buildings or groups of buildings, industrial operations or installations, including transportation (this may include building fabric, lighting, heating systems, vehicle types and fuel efficiency and process review);
  • build, wherever possible, upon life-cycle cost analysis instead of simple payback periods in order to take account of long-term savings, residual values of long-term investments and discount rates; and
  • be proportionate, and sufficiently representative to permit the drawing of a reliable picture of overall energy performance and the reliable identification of the most significant opportunities for improvement.

Energy audits are to allow detailed and validated calculations for the proposed measures so as to provide clear information on potential savings. Energy audits must be undertaken by 5 December 2015, and then at least every four years from the date of the previous audit. The data used in energy audits shall be maintained for historical analysis and tracking performance. It has been estimated, in the consultation, that these energy audits would cost in the region of £15,000 – 25,000.

There is a potential exemption within the Directive from the energy auditing requirement for ‘enterprises that are implementing an energy or environmental management system certified by an independent body according to the relevant European or International Standards’, the principle being to avoid double regulation. On this basis, the consultation proposes that any organisation with a current EN ISO50001, EN 16247 or ISO14001 certificate would be deemed in compliance with ESOS (providing the approach taken to ISO14001 has included an energy audit that meets the minimum standards of the Directive).

A copy of the consultation document can be found at with a copy of the consultation response form and the Impact Assessment at

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