What is the difference between ESOS Phase 1 and ESOS Phase 2? … on the face of it, not a lot.  The law hasn’t changed, the entity enforcing the law hasn’t changed (the Environment Agency) and the need for all of us to live more sustainably and hence lower our carbon footprint hasn’t changed.  You could, in fact, easily be lulled into a false sense of security with the consistency of the law in this area, but, as you may have gathered by the very existence of this article, you’d be wrong.

Whilst the law itself has not changed, the interpretation of the law by the great and the good at the Environment Agency has changed significantly and what used to be frowned upon but tolerated for ESOS Phase 1 will no longer be tolerated for ESOS Phase 2.  Across the board, the requirements for accuracy, completeness and compliance have been tightened up significantly resulting in a great deal of extra work for your ESOS Lead Assessor.

I questioned this additional rigour with one of the senior ESOS officials of the Environment Agency at a conference and the reply I got could be summarised as:

The first time around it was new for everyone.  Companies did not know it was coming and if data was missing or the wrong procedures were applied then there was a degree of tolerance because of this and understanding of the situation.

For ESOS Phase 2, however, companies do know it is coming and there will be no excuses accepted for why the correct data has not been collected or the correct procedures applied. 

To quote directly from my contact:

“… if a company has not got the required data for ESOS Phase 2 we will expect a letter signed by a senior board director explaining why they chose to not comply with the law.” 

Heavy stuff.  This is not an attitude of acceptance and understanding, it is “get it right first time or else”.

The challenge here is that the guidelines issued by the Environment Agency have not been updated in a clear enough fashion to make it obvious what additional rules will now apply for ESOS Phase 2.  So, in an attempt to distil what I have learnt from almost 20 compliance audits with the Environment Agency, here are my tips for what differences to concentrate on as we start ESOS Phase 2.

Complete data records

It sounds rather obvious but please ensure you have a full set of data for ESOS Phase 2.  No gaps in energy billing information for any sites, no gaps in the types of energy used in sites (especially the ones that catch people out such as Oxyacetylene, LPG for forklift trucks etc) and complete records of your centrally owned fleet and grey fleet (more on this below).

Gather and record the actual bills – paper or electronic

For ESOS Phase 1 we accepted spreadsheets of energy data that had been compiled by the participant’s accounting department from their energy bills.

It is now apparent that copies of every energy bill must be included in the evidence pack.  Electronic scans of the bills seem to be acceptable as do summaries produced directly by your energy supplier (which may be easier for some people) but where you have an amount of energy use in a monthly column in your Evidence Pack, be prepared to be able to defend that figure by pointing to a physical bill in your evidence pack.

The devil’s in the detail

The Environment Agency has also made it clear that they need to see *every* energy use, no matter how small.

By way of example, at the request of the Environment Agency, I recently had to go back to an ESOS Phase 1 report and add in 3 company cars that had been used very occasionally 3 years ago.  It increased the company’s energy use by less than 0.1% and was then immediately discounted under the de-minimis exemptions.   So my advice here is to include everything, no matter how small and insignificant it may appear at the time.

Transport fleet analysis

In ESOS Phase 1 there was an acknowledgement that sometimes there is not much you can do to analyse a fleet except by generic desktop analyses.  This was a rather crude approach that applied broad brush savings across the entire fleet using a referenced savings metric, e.g. “a saving of 5% could be achieved by putting staff drivers through a Safe and Fuel Efficient Driving course (“SAFED” courses).”

In ESOS Phase 2 I have been informed that this is not sufficient and we now need to include a more detailed analysis of the composition of the fleet, usage patterns of the fleet and, in larger fleets, detailed interviews with fleet managers to include their input should be included.  Luckily, our ESOS software “Plato” does much of this work automatically but it will take a reasonable amount of time if you don’t have access to tools such as this.

What does this mean in practice?  Well, for a start it means you now need to record not just how many miles were done each month by the fleet but to analyse this either on a vehicle by vehicle basis or to apply a sound statistical analysis to the fleet use.  This becomes especially difficult when we talk about the requirement to know the monthly usage of grey fleet drivers (i.e. those people who claim mileage expenses back from the company).  In my experience, many companies have no idea what their employees’ cars are or, even worse, are concerned that under Data Protection and/or GDPR regulations that information cannot be disclosed.

My advice here is to bite the bullet and if you don’t currently have vehicle type & size recording systems included within your expenses claim system and monthly mileage recording, add them in now.

kWh per unit made / kWh per ton processed etc

For manufacturers, the rules on what the legal minimum amount of analysis that must be done to comply with ESOS has always been unclear.

For ESOS Phase 2 you must now (a) document each manufacturing process you operate (a flow diagram is useful here) and (b) define a unit of measure and regress the energy use data with the production data to give a meaningful “x kWh per widget produced” or similar for each process.

In reality, this involves keeping a record of production volumes for each process you operate and then using a software package (we use Plato, our ESOS platform) to crunch the numbers.

Analysis of sub-meter and smart-meter data

If sub-meters are installed, then in ESOS Phase 2 the data should be analysed to give insight into how different energy consuming items are behaving.  This is also true of smart meters, where an analysis of the half-hourly data should also be included.

Our standard practice in this area is to nominate a “typical” month (September is sometimes a good choice here, not close to normal year ends, not too much like a summer day and not too much like a cold wintery day) and analyse the data for the entire month.  The data from this analysis can then be scaled up to represent the usage over a typical year.


Everything is tightening up for ESOS Phase 2 and you should keep thorough records of your energy use.  Prepare yourself for a greater degree of rigour and greater levels of scrutiny of the data that is required.  Your ESOS Lead Assessor will have to work harder / longer and significantly more data will be needed to be compiled and kept in your evidence pack.

As a final note to ESOS Lead Assessors reading this, with the vast quantities of data involved (one larger client of mine has over 45,000 data bills/data sources to compile and collate) if you are not using a data-automation package to make your life easier, such as Plato, now might be a good time to invest in one.


Want more information?  Download our “Top 5 Tips On How to Make The Most Out Of ESOS”

Enistic help companies manage their energy and have been doing so since 2009.  We are market leaders in ESOS auditing, energy monitoring via meters of all forms and we carried out over 2,000 ESOS site audits during ESOS phase 1.  We develop and maintain Plato, a cloud-based Energy Management Platform that helps a large number of medium-sized and Enterprise level organisations manage their energy in real-time throughout the world, including several listed companies.  We are based in Oxford but have distributors worldwide and have national reach when it comes to ESOS Audits.

If you would like more information about ESOS and see our Top 5 Tips On How to Make The Most Out Of ESOS, click here to download our guide.


Want some help?  Speak to Darryl Mattocks

Darryl is the founder of Enistic and has personally been the responsible ESOS Lead Assessor on over 150 ESOS Audits.  He advises on how to reduce energy use in over 2,000 sites throughout the UK and is doubly certified for ESOS by two independent ESOS approval bodies.   He is an approved ISO50001 Lead Auditor and holds the industry-specific CEM and CMVP qualifications awarded by the Association of Energy Engineers.

He is happy to answer any ESOS or energy management related questions you may have and can be contacted by email at darryl@enistic.com or by phone on 01865 598 776.