Policy status:In Force
Date Effective:2009
Policy Type:Regulatory Instruments>Obligation schemes , Economic Instruments>Market-based instruments>White certificates
Policy Target:Industry, Energy Sector>Electricity Generation
Agency:Independent Pricing and Regulatory Tribunal of NSW (IPART)
Description:Building on the energy efficiency activities under the Greenhouse Gas Reduction Schemes (GGAS) Demand Side Abatement (DSA) Rule, the New South Wales (NSW) government created an Energy Savings Scheme (ESS) affecting electricity use which commenced 1 July 2009. The Scheme sets annual energy savings targets that must be met through the creation and surrender of Energy Savings Certificates (ESCs). Mandatory participants in the Scheme are electricity retailers and other parties such as electricity generators and market customers who buy or sell electricity. Some large electricity users, classified as emissions-intensive trade-exposed industries, are exempt from the Scheme.Total energy savings requirements are fixed for each year of the scheme, as a given percentage of the liable electricity sales for that year. In the first year, the target is set at 0.4% of total electricity sales, and will gradually increase to 4% in 2014. The percentage is then applied directly to each mandatory participant based on their share of the electricity market, who meet their individual targets by undertaking recognised energy saving activities (RESAs) or acquiring ESCs. Failure to meet the target by surrendering sufficient ESCs results in a penalty of AUD 24.50/MWh, which after tax comes to AUD 35/MWh. ESCs are created by certified RESAs, and each certificate represents the energy savings associated with the abatement of one tonne of carbon dioxide equivalent (tCO2-e). RESAs are activities that increase efficiency of electricity consumption or reduce electricity consumption by modifying end-user equipment or its usage, replacing end-use equipment, installing new end-use equipment that consumes less than equivalent equipment, or removing end-use equipment (where there is no negative effect on service or production levels). Three different methods can be used to claim the energy savings from RESAs: Project Impact Assessment Method (PIAM), Metered Baseline Method, and Deemed Energy Savings Method. The Schemes Rule provides guidelines on converting savings as calculated using the different methods into ESCs.

Last modified: Tue, 17 Jul 2012 16:56:09 CEST