The Energy Savings Opportunity Scheme (ESOS) Phase 3 introduced several changes that increased the complexity, time and cost of compliance for many organisations. These included a reduced de minimis threshold, the introduction of energy intensity matrices, mandatory Action Plans and annual progress reporting. Late-evolving guidance and stretched internal and external resources compounded these changes, leading to duplication of effort and increased delivery risk.
What’s changing from Phase 3 to Phase 4?
For Phase 4, only minor changes have been announced to date. No major structural changes to the ESOS framework have been confirmed, providing continuity and allowing organisations to apply lessons learned from Phase 3 rather than adapt to a fundamentally new scheme.
Key lessons from Phase 3
Phase 3 showed that challenges rarely stem from the technical requirements themselves. Instead, issues most often arose from timing, data quality and unclear ownership. As organisations enter Phase 4, these lessons provide a clear opportunity to reduce risk and extract greater value.
- Late engagement and compressed timescales. Many organisations delayed engagement until the compliance year, leaving insufficient time for audits, data validation and approvals. ESOS audits can be carried out at any point during the four-year cycle. Organisations that started earlier benefited from higher-quality audits, fewer data gaps and more opportunity to implement savings before the deadline.
- Poor data quality and unclear ownership. Poor or unverifiable data was a major cause of delay and rework in Phase 3. Issues around organisational boundaries, missing energy data and unclear accountability reduced confidence in recommendations. Strong performers invested time early in defining scope, validating data and assigning clear responsibility for data collation and sign-off.
- Action Plans treated as compliance-only. The introduction of Action Plans was a positive step, but plans created purely to meet compliance requirements often failed to gain traction. Where audits were completed early and aligned with wider business priorities, Action Plans became effective delivery tools, supporting capital planning, Net Zero strategies and operational decision-making.
- Weak governance and accountability. Strong governance consistently led to smoother outcomes. Early director engagement, clear accountability and structured progress tracking reduced compliance risk and improved confidence. JRP Solutions’ Phase 3 assessments identified 1,055 energy efficiency opportunities, equating to approximately £29.56 million in potential savings, highlighting the value available when governance supports delivery.
When things went wrong: Phase 3 enforcement
Phase 3 saw increased enforcement activity from the Environment Agency. Late submissions increased risk, errors required resubmission and enforcement action rose, with 36 financial penalties issued at the time of reporting.
Indicative penalties included:
- Up to £5,000 for record-keeping or notification breaches
- Up to £50,000 plus £500 per day (capped at £40,000) for failure to complete audits
- Total potential exposure of up to approximately £90,000, excluding publication and enforcement costs
This reflects greater scrutiny, reduced tolerance for delays and clearer expectations going into Phase 4.
How organisations made ESOS Phase 3 work for them, with support of JRP
- Greencore (Food and Drink Manufacturing). A large multi-site food manufacturer audited 15 sites, identifying 100 opportunities, with 70 implemented. Behaviour change was a major opportunity alongside technical measures. Despite challenges around data quality, increased production and competing priorities, the programme delivered £6.3 million per year in identified savings, an 18% potential energy reduction and over 15,000 tCO₂e in emissions reductions. Phase 4 will focus on earlier engagement, improved data quality and clearer ownership.
- Circle Health Group (Healthcare). A large private healthcare provider with around 50 UK sites audited nine representative sites. Implemented measures have already delivered over £600,000 per annum in savings and reduced emissions by 488 tCO₂e, with further opportunities identified totalling £2.2 million in annual savings. Phase 4 priorities include early engagement, regular progress reviews and earlier implementation.
Preparing for ESOS Phase 4
- Get your house in order. Engage an experienced ESOS Lead Assessor early, ensure auditors understand your sector and confirm organisational structure and site portfolios at the outset. Early director engagement helps avoid sign-off delays.
- Data is your most valuable asset. High-quality, verifiable data is critical. SECR and GHG reporting can provide a strong starting point, but boundaries, metrics and asset data must be clearly defined. Poor data significantly increases risk and rework.
- Maximise ESOS as an opportunity. Complete audits early to enable implementation and savings. Align ESOS with Net Zero and wider business objectives, review opportunities from previous phases and ensure Action Plans are realistic, prioritised and delivery-focused.
How JRP supports Phase 4
JRP delivers ESOS Phase 4 as a structured, proportionate programme that adds value beyond compliance. With experience across all ESOS phases, JRP focus on early readiness, robust data and delivery-focused Action Plans. JRP can also help you implement your plans.
To receive a tailored ESOS Phase 4 Readiness Checklist, email info@jrpsolutions.com with “ESOS Readiness Checklist” in the subject line and your company name in the email body.
This article appeared in the March 2026 issue of Energy Manager magazine. Subscribe here.
