Energy Savings Scheme
Last updated: 25 Jan 2011
The Energy Savings Scheme ('the Scheme') is a NSW-based mandatory energy efficiency scheme for electricity retailers and other liable parties under the Scheme (see Energy Savings Scheme website).
The Scheme commenced on 1 July 2009 with an energy efficiency target of 0.4 per cent of total electricity sales, which will increase to 4 per cent in 2014.
Liable parties meet the target by undertaking energy efficiency activities or contracting specialist companies to undertake them.
The Scheme creates a separate class of tradeable certificates. Parties who participate in eligible energy efficiency activities and projects under the Scheme can create certificates. In order to comply with their liability under the Scheme, liable parties can either create these certificates themselves or purchase certificates from other parties.
In the first four years of the Scheme an estimated 8.5 million megawatt-hours of electricity will be saved. This is equivalent to around 8.5 million tonnes of carbon dioxide.
The NSW Greenhouse Gas Reduction Scheme (GGAS) previously provided incentives for energy efficiency through its Demand Side Abatement component. This part of GGAS was successful in delivering low-cost energy efficiency activity.
The Division of Resources and Energy, NSW Trade & Investment and the Office of Environment and Heritage have led the development of a detailed policy and legislative framework to ensure the efficient operation of the Energy Savings Scheme.
The Energy Savings Scheme will operate until 2020 unless replaced by a national energy efficiency trading scheme.
Energy Savings Scheme Rule Change Consultation
On 22 December 2011 a new ESS Rule (160kb, PDF) was gazetted and came into effect.
The NSW Government consulted on the changes that were made to the Energy Savings Scheme (ESS) Rule from November to December 2011. The changes are designed to broaden the scope of energy saving activities and projects conducted under the Scheme, as well as to maintain the integrity of the Scheme.
The new ESS Rule expands the types of projects that are eligible under the Scheme, providing new incentives for hotels, motels and electricity networks to participate in energy saving activities. In addition, showerhead replacement activities were removed from the Scheme.
Details of the proposed changes can be found at:
2012 Exemptions – Ministerial Order
The Minister for Resources and Energy has approved a Ministerial Order for 2012 granting exemptions from the Energy Savings Scheme for emissions-intensive and trade-exposed activities or industries for 2012. More information is available from the links below.
- 2012 Exemptions Order (43kb, PDF) published in the NSW Government Gazette on Friday 16 December 2011.
- ESS Exemptions - Policy Framework (1.9Mb, PDF) provides background and explanatory material in relation to the new 2012 Ministerial Order.
Previous Ministerial Orders for Exemptions
Key Scheme documents
Preparing for the Energy Savings Scheme (PDF 53 KB) provides an overview of the Scheme.
The legislation for the Energy Savings Scheme is contained in Part 9 of the Electricity Supply Act 1995. See Part 9 of the Act.
The Regulation for the Energy Savings Scheme is contained in Part 9A of the Electricity Supply (General) Regulation 2001. See Part 9A of the Regulation.
The Energy Savings Rule determines the activities that are eligible under the Scheme for certificate creation and outlines methods for calculating the number of certificates a given activity can generate.
The Better Regulation Statement (PDF 231 KB) provides more detail on the case for the Energy Savings Scheme.
For more information on how the Scheme was developed and past Rule changes see Scheme design and background.