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NSW Climate and Energy Action

Energy Security Safeguard

Energy Security Safeguard provides financial incentives for cost-effective energy savings and peak demand reduction measures.

The NSW Electricity Supply Act 1995 was amended in May 2020 to establish the Safeguard, as part of the second emergency COVID-19 response bill package, passed by Parliament.   

In September 2021, the NSW Government released the Energy Security Safeguard position paper. It sets out the Government’s final position on the design of the ESS and the PDRS, including reforms to the ESS, the design of the new PDRS, and reforms to improve scheme administration. The paper also summarised stakeholder feedback received in response to the Energy Security Target and Safeguard consultation paper.   

Targets set by the Safeguard are expected to deliver New South Wales a $1.2 billion net economic benefit. Households and businesses choosing to take advantage of energy savings could also save an additional $3.6 billion on their bills between 2022 and 2040.

The Safeguard aims to improve the affordability, reliability and sustainability of energy and includes 3 separate schemes:

Energy Savings Scheme

The Energy Savings Scheme (ESS) supports energy saving activities for households and businesses across NSW. It aims to reduce energy usage and costs for participants by installing energy efficient equipment and appliances. Recent scheme changes have expanded the range of eligible activities.

Running since 2009, the scheme has an energy savings target of 13% by 2030.

Peak Demand Reduction Scheme

The Peak Demand Reduction Scheme (PDRS) supports activities that reduce demand at peak times, including flexible demand response. It will help us provide a safe and reliable electricity system while reducing pressure on wholesale electricity prices across NSW. The scheme began in 2022.

Renewable Fuel Scheme

The Renewable Fuel Scheme (RFS) incentivises the production of green hydrogen, with a target of 67,000 tonnes (or 8 million gigajoules) by 2030. Developed as part of the Hydrogen Strategy, the RFS will support industry to grow new green hydrogen supply chains in NSW. It will also help NSW’s regional economies benefit from the State’s first mover advantage. The RFS will commence in 2024.

Find out more about the Safeguard and its 3 schemes:

For more information about the Safeguard, please contact us at sustainability@environment.nsw.gov.au.