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. Since its inception in 2009, the ESS has supported projects that will deliver around 14,700 gigawatt hours of energy savings over their lifetimes. These savings are estimated to deliver around $2.1 billion in energy bill savings for NSW households and businesses over the next decade or more.

The ESS is legislated to continue until 2025.

ESS Rule change 2016-2017

The ESS Rule sets out how Energy Savings Certificates are created. The NSW Government is currently undertaking the annual ESS Rule change process.

A consultation paper and a draft amended version of the ESS Rule are available.

The NSW Government sought input from stakeholders to ensure proposed changes were appropriate and reflected industry standards.

As part of this consultation period, the Office of Environment and Heritage and the Department of Industry held an information forum to discuss the proposed changes and answer any stakeholder queries.

Full information about the 2016-2017 Rule change will be maintained at the dedicated Energy Savings Scheme Rule Change 2016-17 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.

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.

Details about the 15 April 2016 ESS Rule change are available at the 2015-2016 ESS Rule change page. This Rule change enabled the outcomes of the ESS Review, for example by expanding the ESS to include gas savings. Details about earlier major changes to the ESS Rule are available at the 2013-2014 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.

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.

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.

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.