New Energy Security Safeguard Rule changes
New Rules under the Energy Security Safeguard are now in effect.
The Peak Demand Reduction Scheme (PDRS) Rule was first published in September 2022. It outlines how Peak Reduction Certificates (PRCs) are managed for activities including:
- batteries for apartment buildings and businesses
- virtual power plants (VPPs)
- air conditioners
- refrigerated cabinets
- pool pumps.
Current Peak Demand Reduction Scheme Rule
The Peak Demand Reduction Scheme gazetted substantive updates on 1 July 2026 including:
- introduction of battery incentives for apartment buildings and businesses
- virtual power plant (VPP) incentive eligibility and onboarding process
- multi-split system and large air conditioner eligibility.
Minor administrative changes to the Peak Demand Reduction Scheme Rule are in effect from 12 October 2026, providing more flexibility for customers joining virtual power plants.
Previous minor administrative changes in effect from 7 September 2026 included:
- minor clarifications to BESS3, 4 and 5 requirements
- aligning BESS2 life support requirements with DNSP and retailer registrations
- removing the cap for HVAC2.
Peak Demand Reduction Scheme Rule (October 2026) (PDF, 904 KB)
Changes to the Peak Demand Reduction Scheme Rule
You can download all Peak Demand Reduction Scheme Rule change discussion papers, draft Rule versions and public submissions below.
These documents are only a guide and are not intended for any official Peak Demand Reduction Scheme purposes.
Before making these changes, we consulted industry for feedback. Our public consultation was open from 17 December 2025 to 20 February 2026.
- Peak Demand Reduction Scheme Rule, October 2026
- Peak Demand Reduction Scheme Rule, August 2026
- Peak Demand Reduction Scheme Rule, June 2026
- Energy Security Safeguard: Position paper, July 2026
- Consultation paper, December 2025
- Peak Demand Reduction Scheme batteries presentation, February 2026
- Energy Savings Scheme and Peak Demand Reduction Scheme Rule changes presentation, February 2026
- Peak Demand Reduction Scheme electric vehicle presentation, February 2026
- Energy Security Safeguard Rule changes combined questions and answers, February 2026
- Public submissions, February 2026 (coming soon)
A minor Rule update has been made to ensure business as usual arrangements continue for our virtual power plant incentive (BESS2) from 1 April 2026.
This change removes an upcoming increase to the minimum battery capacity required, ensuring that there is no change for customers, installers and Accredited Certificate Providers from 1 April 2026.
No changes are required from stakeholders because of this update.
This change to the Peak Demand Reduction Scheme Rule was published on 29 August 2025 and commenced on 12 September 2025.
Changes include:
- Banning unsolicited door-knocking to promote and sell energy-efficient and demand reduction upgrades under the Peak Demand Reduction Scheme to support customers in making informed decisions and receiving high-quality upgrades.
- Extending the lifetime of air conditioner installation activities from 10 to 12 years, increasing the upfront incentive.
This change included:
- improving the Virtual Power Plant (VPP) process, increasing the incentive, and allowing 6 years’ worth of incentives to be claimed upfront for connecting to a Virtual Power Plant
- suspending battery installations under the Peak Demand Reduction Scheme due to the Australian Government’s Cheaper Home Batteries Program becoming available.
The previous NSW battery installation incentive cannot be combined with the Cheaper Home Batteries Program.
This change introduced:
- greater flexibility for compliance with the Distributed Energy Resources (DER) Register requirement when installing batteries
- clarifying the definition of battery energy storage systems
- suspending the heat pump water heater activity until further notice.
This change introduced 2 new battery activities that commenced on 1 November 2024.
This amendment also changed existing activities including:
- limiting the commercial water heater activity to larger units
- revising baselines and calculations for the high-efficiency pool pumps activity (SYS2).
It also removed 2 activities:
- old fridges and freezers (RF1)
- installation of high-efficiency motors (SYS1).
Position Paper, May 2024 (PDF, 849KB)
Consultation paper, October 2023 (PDF, 1.4MB)
Download the Public Submissions, May 2024 (ZIP, 9.5MB)