The Energy Savings Scheme (ESS) is a NSW-based, mandatory scheme for electricity retailers and other participants under the Electricity Supply Act 1995.
The ESS reduces energy consumption in NSW by creating financial incentives for households and businesses to invest in energy savings by installing, improving or replacing energy savings equipment.
This webpage provides information about review of the ESS and of the ESS Rule, and about exemptions from the ESS. For information about how to participate in the ESS, please visit the Energy Savings Scheme website.
About the ESS
The Energy Savings Scheme was established in 2009 under the Electricity Supply Act 1995. The Act provides that the primary objective of the ESS is to create a financial incentive to reduce the consumption of energy by encouraging energy saving activities. The ESS works by placing an obligation on NSW energy retailers and other liable parties to purchase energy savings in the form of Energy Savings Certificates each year. These certificates are created by an Accredited Certificate Provider when an energy user undertakes an eligible energy savings activity.
The ESS has been highly successful to date. Between mid-2009 and January 2016, the ESS supported projects that will deliver around 12,800 gigawatt hours of energy savings over their lifetimes. These savings are estimated to deliver around $1.8 billion in energy bill savings for NSW households and businesses over the next decade or more.
The ESS is legislated to continue until 2025.
In 2014 and 2015 the NSW Government consulted on a statutory review of the Energy Savings Scheme, and on proposed reforms to the scheme. The Energy Savings Scheme Statutory Review (700 KB ) report is now available.
On 13 October 2015 the Minister for the Environment and the Minister for Industry, Resources and Energy announced the NSW Government's final position on the reforms to the ESS. The Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 was introduced into the Parliament of NSW on 13 October 2015.
ESS Rule change 2015-2016
The NSW Government has amended the ESS Rule to enable the outcomes of the ESS Review, for example expanding the ESS to include gas savings. The amendment also updates saving factors and activity schedules for new technologies, and complements changes to building and equipment standards.
Further information about public consultation on the ESS Rule change consultation is available at the 2015-2016 ESS Rule change webpage.
Current ESS Rule
The ESS Rule sets out how Energy Savings Certificates are created.
The current ESS Rule became effective on 15 April 2016 and was amended on 30 September 2016. The September 2016 amendment extended the pause on new accreditations for the ‘sampling’ sub-method of the Project Impact Assessment with Measurement and Verification method. The NSW Government will consult on opening the sub-method during the next annual ESS Rule amendment process, for which public consultation will be held before the end of 2016.
Details about the April 2016 ESS Rule change are available at the 2015-2016 ESS Rule change page.
As part of the ESS Review in 2015, the NSW Government committed to managing an annual process to update the ESS Rule. For the three years following the amendment on 15 April 2016, the NSW Government intends to limit changes to the ESS Rule to minor amendments. The annual review process will:
- incorporate stakeholder feedback and evaluation results
- maintain the effectiveness of the rule, through updates to savings factors, and adding activity schedules for new technologies, and
- complement changes to building and equipment standards.
For reference, a copy of the Previous Rule (October 2015 – April 2016) is available. A change-tracked version of the current ESS Rule showing differences from the Previous Rule is available (and does not show the minor amendment made in September 2016). This change-tracked version is for guidance only, and will not be considered valid for any official ESS purposes.
Details about previous major changes to the ESS Rule are available at the 2013-2014 ESS Rule change page.
The NSW Government intends to provide annual updates to the ESS Rule to update deemed savings factors and incorporate new products and practices, with a major review of the ESS Rule every three years. Any suggestions for Scheme improvements should be emailed to email@example.com. Suggestions should include available evidence to support the recommendation in line with the Scheme’s objectives.
ESS exemptions 2016
Under Sections 119-122 in Part 9 of the NSW Electricity Supply Act 1995, the Minister for Industry, Resources and Energy may publish an Order in the NSW Government Gazette granting full or partial exemption from ESS liabilities in respect of any electricity load used in connection with an industry or activity that is both emissions intensive and trade exposed.
The Minister must be satisfied that the electricity load is used in connection with an industry or activity that is both emissions intensive and trade exposed and that the exemption is otherwise generally consistent with the objects of Part 9 of the Act.
ESS exemption applications are assessed based on the exempt industries and activities identified by the Australian Government's Clean Energy Regulator.
The 2016 ESS Exemptions Order grants exemptions from the ESS.