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.

Policy development of the ESS is jointly shared between NSW Department of Industry and the NSW Office of Environment and Heritage. For any questions please contact us at energysavings.scheme@industry.nsw.gov.au

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. Since its inception in 2009, the ESS has supported projects that will deliver more than 19,000 gigawatt hours of energy savings over their lifetimes. These savings are estimated to deliver around $2.9 billion in energy bill savings for NSW households and businesses over the next decade or more.

The ESS is legislated to continue until 2025.

Current ESS Rule

The ESS Rule sets out how Energy Savings Certificates are created.

The current ESS Rule became effective on 28 April 2017 after being published in the NSW Government Gazette on 31 March 2017.

Details about the 28 April 2017 ESS Rule change are maintained at the dedicated Energy Savings Scheme Rule Change 2016-17 webpage. Details about earlier major changes to the ESS Rule are available at the 2015-2016 ESS Rule change page and the 2013-2014 ESS Rule change page.

The NSW Government is committed to managing an annual process to update the ESS Rule.

These annual updates to the ESS Rule are intended to:

  • incorporate stakeholder feedback and evaluation results
  • maintain the effectiveness of the ESS Rule, through updates to savings factors, and adding activity schedules for new technologies
  • complement changes to building and equipment standards
  • incorporate new methods or sub-methods for Energy Savings, and
  • make other enhancements to the ESS Rule to maintain its integrity and/or reduce transaction costs.

ESS Rule change 2017-2018

The NSW Government is now commencing the 2017-18 ESS Rule change. The means we are starting to work on new amendments that can be incorporated in the ESS for commencement in early 2018. We are starting with the scoping phase, which allows us to look at any new ideas that ESS stakeholders may have. These ideas could consist of amendments to existing methods, or could be completely new energy saving activities.

We are inviting stakeholders to submit new ideas for the 2017-18 Rule change. Submissions are welcome by 5 May 2017. To submit an idea, visit the Energy Savings Scheme Rule Change 2017-18 webpage.

ESS Review

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 PDF) 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.

The NSW Government's Review of the ESS position paper (1.09 MB PDF) summarises stakeholder feedback and the NSW Government's final position. Further information is available on the ESS Review webpage.

ESS exemptions 2017

Under Sections 119-122 in Part 9 of the NSW Electricity Supply Act 1995, the Minister 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 2017 ESS Exemptions Order grants exemptions from the ESS.