Peak Demand Reduction Scheme (PDRS) updates

Announcement: 2026-27 PDRS target change

On 31 October 2025, we revised the 2026-27 Peak Demand Reduction Scheme (PDRS) target to 0.5%. This new target reflects changed market conditions and aims to help avoid scheme participants facing penalties due to a shortage of certificates. Read more about the new target. 

Expanding the PDRS to new activities

We intend to consult before the end of the year on expanding the PDRS to new activities. New activities may include commercial and industrial-scale batteries, batteries for apartments, electric vehicle charging, and combining PDRS incentives with the Australian Government’s Cheaper Home Batteries Program (CHBP) for households and groups that face additional barriers to accessing batteries. 

Supporting existing activities

From 1 July 2025, we increased the up-front incentive to register a battery as part of a virtual power plant (VPP). This builds on the success of the CHBP, encouraging households and businesses to register their spare battery capacity as part of a VPP. 

Between July and October 2025, we estimate that around 35,000 VPP-enabled batteries have been installed in NSW through the CHBP. This nation-leading uptake is nearly double that of any other state or territory, with Western Sydney and the Shoalhaven leading the country.  

Initial data suggests that certificates created each month from the PDRS VPP activity has doubled since 1 July. We expect this to increase as additional certificates are created for VPP implementations that occurred between July and September 2025.  

PDRS targets revised to support new and existing activities

On 31 October 2025, we revised the 2026-27 PDRS target to 0.5%. Significant growth in existing and new activities will be required to meet the 2025-26 and revised 2026-27 target. We estimate 22 million additional certificates will be needed by March 2028, with at least 13.5 million by March 2027.  

However, without target adjustment, around 80 million additional certificates would need to have been created and surrendered by March 2028, risking a shortage of certificates and penalties for scheme participants.  

The chart below illustrates how many certificates have been created to date and an estimate of how many will be required to meet scheme targets. We intend to consult on setting future PDRS targets later this year. 

The latest Peak Demand Reduction Scheme Rule

NSW households and businesses can now access a larger incentive for connecting their battery to a Virtual Power Plant (VPP), as well as the larger battery installation discount under the Australian Government’s Cheaper Home Batteries Program. 

The previous NSW battery installation incentive cannot be combined with the Cheaper Home Batteries Program. 

The latest Peak Demand Reduction Scheme Rule was published on Friday 29 August 2025 and commenced on Friday 12 September 2025. 

We have made changes to the Rule, including: 

• improving the VPP process, increasing the incentive, and allowing 6 years’ worth of incentives to be claimed upfront for connecting to a VPP
• suspending battery installations under the Scheme due to the Australian Government’s Cheaper Home Batteries Program becoming available
• banning unsolicited door-knocking to promote and sell energy-efficient and demand reduction upgrades under the Scheme to support customers in making informed decisions and receiving high-quality upgrades. 

Read the latest Rule 

Read the position paper 

Future changes to the Peak Demand Reduction Scheme will be updated here. Sign up here to also receive email updates about the PDRS.  

Peak Demand Reduction Scheme Compliance Rule

We published the Peak Demand Reduction Scheme Compliance Rule (Compliance Rule) in October 2022, which is different from the Peak Demand Reduction Scheme Rule. The Compliance Rule provides more detail on how the Independent Pricing and Regulatory Tribunal (IPART), as the Peak Demand Reduction Scheme's administrator, calculates certificate targets. The Compliance Rule also details how electricity retailers and large users must estimate individual liability.  

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If you have questions about the Peak Demand Reduction Scheme, email us at [email protected].