NSW Energy Savings Scheme
The NSW Energy Savings Scheme (ESS) provides financial incentives to install energy efficient equipment and appliances in NSW households and businesses.
The ESS was established in 2009 under the NSW Electricity Supply Act 1995 and has been highly successful. Since its inception, the ESS has supported projects that will deliver more than 32,500 gigawatt hours of energy savings and over $6.1 billion in bill savings by 2029.
In September 2021, the NSW Government released a position paper that sets out the Government’s final position on the design of the Energy Security Safeguard, including major reforms to the ESS. See Review and reform of the Energy Savings Scheme for further information.
The Energy Savings Scheme Rule (ESS Rule) details how Energy Savings Certificates are created. The current ESS Rule became effective on 30 March 2020, and now includes the 4 September 2020 Amendment to Activity Definition F1 of Schedule 1.
The NSW Government has committed to updating the ESS Rule on an annual basis. The 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, changes to the Rule requirements and adding activity schedules for new technologies
- complement changes to building and equipment standards
- incorporate new methods for Energy Savings
- make other enhancements to the ESS Rule to maintain its integrity and/or reduce transaction costs.
The 2020-21 ESS Rule change consultation closed on Friday 23 July. Find more details on the proposed changes.
The ESS has incentivised the uptake of energy efficient lighting in NSW since the scheme’s inception in 2009. Lighting upgrades make up the majority of energy savings delivered through the scheme to date.
In 2017, the Department of Planning, Industry and Environment commissioned the Lighting Market Impact Evaluation (LMIE) study, which was supported by a quantitative model: LMIE report (PDF 6.84MB) and accompanying Modelling assumptions report (PDF 2MB).
The evaluation found that the ESS has brought forward the uptake of LED lighting technologies and upgrades in NSW by 7 to 10 years. With LED lighting becoming the norm for new product sales, at current trends LEDs will soon replace most common lighting technologies.
In mid-2020, the NSW Government commissioned Beletich Associates, Common Capital and Light Naturally to review and update all 3 ESS-deemed lighting methods to reflect the latest market and policy developments, and to provide detailed recommendations on the improved delivery of the lighting upgrades.
A targeted consultation workshop was held on Wednesday 9 September 2020 where Beletich Associates, Common Capital and Light Naturally presented their draft findings along with future options for lighting in the ESS: see a recording of the webinar, presentation slides (PDF 1.54MB), and Workshop questions and answers: Targeted consultation workshop - lighting in the Energy Savings Scheme (PDF 246kB).
Discussion papers on final ESS Rule changes, draft ESS Rule versions and public submissions can be downloaded via the links in the table below.
The documents linked below are only a guide and are not intended for any official ESS purposes. Older versions of the ESS Rule can be found at the Scheme Administrator’s website.
|Rule change||New version of ESS Rule in effect from:||ESS Rule with tracked changes from previous version (for guidance only)||Discussion paper – final changes made||Draft Rule for public consultation released on||Consultation paper - draft Rule changes||Public submissions|
|2019-20||30 March 2020||Download||Download||24 July 2019||Download||Download|
|2017-18||20 April 2018||Download||Download||8 December 2017||Download|
|2016-17||28 April 2017||Download||Download||25 November 2016||Download|
|2015-16||15 April 2016||Download||Download||6 November 2015||Download||Download|
|2013-14||1 June 2014||N/A||Download||30 October 2013||Download|
In December 2020, the NSW Government increased the existing energy savings targets of the ESS for the years 2022 to 2025 and set new targets for the years 2026 to 2050.
Schedule 5 of the NSW Electricity Supply Act 1995 sets out the new energy savings targets for the scheme. The target will increase by 0.5% each year from 2022, reaching 13% in 2030. The target will then remain at 13% until the end of the scheme in 2050.
In September 2021, the NSW Government announced expansion of the scheme to cover a wider range of fuel switching activities.
Increasing the energy savings targets and introducing a wider range of fuel switching activities is expected to save households and businesses choosing to implement energy savings projects an additional $2.4 billion on their bills between 2022 and 2040.
The Energy Security Safeguard position paper sets out the Government’s final position on the design of the Safeguard, including these reforms to the ESS.
The paper also summarises stakeholder feedback received in response to the Energy Security Target and Safeguard consultation paper. The consultation was open from April to June 2020.
In April 2020, the Minister for Energy and Environment released the ESS Draft Statutory Review and Energy Security Target and Safeguard consultation paper (PDF 670kB). Submissions closed in May and the ESS Final Statutory Review Report 2020 was tabled in parliament in June 2020.
Further information about the Energy Security Safeguard and recent reforms to the ESS:
- Overview of the Energy Security Safeguard position paper (PDF 739KB)
- Energy Security Safeguard position paper (PDF 2.7MB)
- Energy Security Target and Safeguard consultation paper (PDF 671KB)
- Submissions on the Energy Security Target and Safeguard consultation paper (ZIP 15MB)
For more information about the 2020 ESS Statutory Review, see:
- NSW Energy Savings Scheme – Final Statutory Review Report 2020 (PDF 775kB)
- Energy Savings Scheme Statutory Review 2020: Stakeholder submissions (PDF 752kB)
Energy Savings Scheme review 2015
In 2014 and 2015, the NSW Government carried out a Statutory Review of the ESS and consulted on reforms. The ESS Statutory Review was completed in June 2015 and reforms to the scheme were introduced in October 2015.
For further information about the 2015 Statutory Review and scheme reforms, see:
Under the NSW Electricity Supply Act 1995, the Minister can grant full or partial exemption from ESS liabilities for an industry or activity that is both emissions intensive and trade-exposed.
Exemptions from the ESS are intended to ensure that NSW industrial energy users are not at a competitive disadvantage.
The Energy Savings Scheme exemptions process paper (PDF 126kB) outlines the exemption process. ESS exemptions are based on the framework used for the Australian Government's Renewable Energy Target.
The ESS Exemptions Order 2020 effective 1 January 2021 grants current exemptions from the Energy Savings Scheme.
In response to the COVID-19 pandemic, the NSW Government provided relief to small retailers by reducing their individual energy savings target for the 2020 compliance year through the Energy Savings Scheme (Small Retailer) Order 2020.
For more information about exemptions from the ESS, email sustainability [at] environment.nsw.gov.au.