Energy efficiency or demand side abatement (DSA) projects can take a wide variety of forms. In all cases, these types of projects result in a reduction in the use of electricity and consequently a reduction in greenhouse gas emissions.

The Greenhouse Gas Reduction Scheme (GGAS) recognises seven different methods for claiming abatement under the DSA Rule. Proponents of DSA projects should carefully consider the most appropriate methodology to suit the circumstances of their particular project. In some cases, the Scheme Administrator may recommend a different approach, and this would be following a period of assessment and consultation with the proponent.

Eligible Demand Side Abatement projects

Under the GGAS, project proponents undertake energy efficiency or demand management projects (DSA activities) to create NSW Greenhouse Abatement Certificates (NGACs). DSA is a reduction in greenhouse gas emissions resulting from actions taken on the customer side of an electricity meter (ie the ‘demand side’).

Six types of project are eligible for accreditation:

• energy efficiency projects that modify existing energy consuming equipment, processes or systems (called ‘Installations’ in the DSA rule), or which modify the usage of those Installations
• energy efficiency projects that replace existing Installations, with other Installations
• energy efficiency projects that install new Installations that consume less electricity than other Installations of the same type
• energy efficiency projects that reduce electricity consumption where there is no negative effect on producion or service levels
• fuel switching projects that substitute one source of energy for another
  
• on-site electricity generation that replaces supply from the National Electricity Market

DSA projects must be either implemented in NSW after 1 January 2002 or implemented in the ACT after 1 January 2004 (with some exceptions for on-site electricity generation projects and projects claimed under the previous voluntary scheme).

Ineligible Demand Side Abatement projects

The DSA Rule excludes certain activities from making NGACs, such as:

• those which can create certificates under another Rule
• activities which reduce electricity consumption by reducing the economic benefit from the use of the electricity
• Green Power purchases (or purchases of similar products)
• activities to reduce losses in electricity transmission or distribution networks, and
• installation of solar water heaters for which Renewable Energy Certificates can be created.

Applications for accreditation

In the DSA Rule, the person entitled to create certificates is called ‘the Abator’. In general, the Abator is the person responsible for the payment for energy consumed at the abatement site (the name of the person that appears on the electricity bills). However, this is slightly different for on-site electricity generation projects and projects claimed under the previous voluntary scheme.

Where the project involves on-site electricity generation, to calculate the total greenhouse gas intensity of the project, the application must be prepared using the Generation Rule. In this case, the Abator is the Generator as defined in the Generation Rule. Where projects were claimed under the previous voluntary scheme by an electricity retailer, referred to as ‘Electricity Sales Foregone’, this allows the retailer to qualify as the Abator.

The person who pays the electricity bills may choose to give written permission to someone else to create NGACs on their behalf. This process is called ‘nomination’ and there are standard words in the Guide to Applying - DSA to use when gaining nomination.

While the benefit of the nomination flows to the nominated Abator, so does the burden. The nominated Abator must ensure the DSA project is properly implemented and must keep records of this.

Before applying for accreditation, the project proponent needs to:

• establish that their project is eligible
• establish that they are the Abator
• decide which calculation method to apply
• generate enough data and records to apply that method
• contact the Independent Pricing and Regulatory Tribunal (IPART) for more detailed guidance.

Once these steps have been completed, the project proponent should submit the Application Form – DSA along with the application fee and the appropriate documentation outlined in the Guide to Applying – DSA.

Calculation of the number of certificates from DSA projects

DSA projects vary greatly in terms of the nature of the site, the activities carried out, the technologies used, and the size of the project. The DSA Rule accommodates projects ranging from on-site power generation, aluminium smelters, lighting upgrades to star rated washing machines. To accommodate this variability, the Abator can choose between seven different methods for calculating how many certificates can be created from a DSA project:

• Project Impact Assessment Method
• Metered Baseline Method – Baseline per unit of output
• Metered Baseline Method – Baseline unaffected by output
• Metered Baseline Method – Normalised baselines
• Metered Baseline Method – Office Buildings ABGR Method
• Default Abatement Factors Method
• Generation Emissions Method

For a detailed description of how to use each of these calculation methods, please see the Guide to Applying - DSA. Project proponents should contact IPART prior to submitting an application.

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