The Energy Savings Scheme (ESS) is a NSW-based, mandatory scheme for electricity retailers and other participants under the Electricity Supply Act 1995 and the Electricity Supply (General) Regulation 2014.
The ESS reduces energy consumption in NSW by creating financial incentives to invest in energy savings. The ESS Rule sets out how Energy Savings Certificates are created.
Under the ESS, households and businesses can receive financial incentives to save energy and reduce energy bills by installing, improving or replacing energy savings equipment.
The web page below 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.
ESS Rule change
The NSW Government is preparing to amend the ESS Rule to enable commencement of the recent reforms to the ESS passed by the NSW Parliament. The change will also update saving factors and activity schedules for new technologies and complement changes to building and equipment standards.
A public consultation forum was held on 12 November 2015.
Consultation has now closed and the NSW Government is presently assessing feedback received on the proposed changes to the ESS Rule.
About the ESS
The Energy Saving 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 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 NSW Government's Review of the ESS position paper (1.09 MB PDF) summarises stakeholder feedback and the NSW Government's final position.
The Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 was introduced into the Parliament of NSW on 13 October 2015.
Current ESS Rule
The current ESS Rule became effective on 1 October 2015. Major changes were also made to the rule in 2013 and 2014.
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.