The Energy Savings Scheme (ESS) commenced on 1 July 2009.

The new ESS website http://www.ess.nsw.gov.au contains all current information related to implementation and operation of the ESS.

The Energy Savings Scheme is designed to increase opportunities to improve energy efficiency by rewarding companies who undertake eligible projects that either reduce electricity consumption or improve the efficiency of energy use.  Reducing electricity use will help NSW families and businesses to save money on their power bills and will shield customers from rising electricity prices and from future electricity price increases.

The scheme works by setting a target for electricity retailers and other liable parties, known as Scheme Participants. Scheme Participants meet their energy savings target by obtaining and surrendering tradable Energy Saving Certificates (ESCs) – called “es-keys”. ESCs will be calculated in tonnes of carbon dioxide equivalent, just like NGACs in GGAS.

Scheme Participants in the ESS are the same persons required to participate in GGAS; that is any supplier of electricity in NSW. This includes electricity retailers, electricity generators who supply direct to a customer, and any market customer.

Companies that become Accredited Certificate Providers (ACPs) will be able to create ESCs when they undertake specific actions to improve energy efficiency in a variety of residential, commercial or industrial settings. Applications to become an ACP will be managed by IPART in its role as Scheme Administrator and will be available after 1 July 2009.

The ESS will commence with an energy efficiency target of 0.4% of total electricity sales in NSW. As some Trade-Exposed Emissions Intensive industries will be exempt from the Scheme, this translates into 0.5% of the liable electricity sales in NSW. The Minister will publish a Ministerial Order which will list those activities that will be exempt from the ESS. The Order will also allow the Scheme Regulator to make rules regarding how Scheme Participants may identify and deduct any exempt loads.

The energy efficiency target will increase incrementally to 4% total electricity sales (5% of liable electricity sales) by 2014 and will continue at that level until the ESS ends in 2020 or is replaced by a national energy efficiency trading scheme. ESS Scheme Participants will be required to surrender 2009 vintage ESCs in March 2010 for the first compliance period from 1 July 2009 to 31 December 2009.


Arrangements for participants in GGAS transitioning into the ESS

The ESS is modelled on the end-use energy efficiency parts of the Demand Side Abatement (DSA) component of GGAS. As a result, ESS eligible projects currently accredited under the GGAS DSA Rule will be able to transition into the ESS.

In its capacity as Scheme Administrator of both ESS and GGAS, IPART is working to ensure a smooth transition for those projects eligible to transition from GGAS into the ESS.  Eligible projects can create NGACs for activities up to 30 June 2009 and will be able to create ESCs for those same activities under the new ESS Rule from 1 July 2009.

The energy efficiency component of GGAS ceased on 30 June 2009, with only ‘On-Site Generation’ activities being able to create NGACs for activities taking place under the DSA Rule from 1 July 2009.  A new version of the DSA Rule has been released and is available here.

It is intended that companies currently accredited under the GGAS DSA Rule, for activities that are eligible under the ESS Rule, will be automatically issued with an equivalent accreditation under the ESS for that activity (subject to the Scheme Administrator being satisfied that the project meets the requirements of the ESS).

Remaining DSA Rule accreditations under GGAS will be cancelled by the Scheme Administrator following a final registration of 2009 NGACs and completion of any outstanding audit and reporting requirements.
Apart from changes to the DSA Rule, all other aspects of GGAS will continue to function from 1 July 2009. This means NGAC creation from the Carbon Sequestration Rule, Generation Rule and Large User Rule will continue as normal.

If you wish to find out more about implementation of the ESS and specifics relating to transitions from GGAS to the ESS, please contact the GGAS Scheme Administrator at ess@ipart.nsw.gov.au.