A NSW Government website

Peak Demand Reduction Scheme

The Peak Demand Reduction Scheme (PDRS) aims to reduce peak electricity demand in NSW.  

To reduce demand, the scheme is providing financial incentives to households and businesses to reduce energy consumption during hours of high peak demand for: 

  • residential batteries
  • air conditioners
  • pool pumps
  • large heat pump water heaters
  • commercial refrigerated cabinets.

By reducing electricity consumption of households and businesses when demand is high, we'll help lower the cost of electricity and reduce the risk of power outages in NSW. This will help households and businesses in NSW save around $1.2 billion on their bills between 2022 and 2040.  

By shifting the times when electricity is used and using more renewable energy generation in the system, we’ll help hit NSW targets of reducing emissions by 70% by 2035 and achieving net zero by 2050. 

The latest Peak Demand Reduction Scheme Rule

The PDRS Rule was published on 24 May 2024.

We’ve made changes to existing activities, including:

  • limiting the commercial water heater activity to larger units that cannot receive Small Scale Renewable Energy Scheme incentives
  • remove the removal of old fridges and freezers activity
  • remove the installation of high-efficiency motors activity
  • revising the baselines and calculations for installing high-efficiency pool pumps. 

These changes will commence on 1 August 2024.

We've also introduced new incentives for households and small businesses to install and operate residential batteries. These incentives will support:

  • installation of a new behind-the-meter battery energy storage system (BESS)
  • participation in a Virtual Power Plant (VPP) to allow partial dispatch of your battery when it’s needed to support the grid.

These changes will commence on 1 November 2024.  

You can learn more about the changes in the:

You can also learn more about our consultation in the:

The Peak Demand Reduction Compliance Rule

We published the PDRS Compliance Rule (compliance Rule) in October 2022, which is different from the scheme rule. The compliance rule provides more detail on how IPART, as the scheme administrator, must calculate scheme certificate targets.  It also details how electricity retailers and large users must estimate the timing of certain types of electricity purchases to calculate individual liable demand.

Get involved

We collaborate with industry through research and public consultation. We’ll keep you informed by updating activities regularly on our website and via email.  

Email us to learn more about and get involved in our research and consultation at [email protected]

The information you provide in this form will only be used for the purpose for which it was collected. By submitting, you consent to storage, use, and disclosure of your personal information in accordance with our privacy statement.