About the Energy Security Safeguard

The Energy Security Safeguard (the Safeguard) helps ensure our energy system is more reliable, affordable and sustainable.

This is being achieved through 3 certificate schemes under the Safeguard, creating financial incentives for households, businesses and industry:

• Energy Savings Scheme (ESS): incentives to improve energy efficiency.
• Peak Demand Reduction Scheme (PDRS): incentives to reduce energy usage during periods of peak demand.
• Renewable Fuel Scheme (RFS): incentives to produce green hydrogen from 2026.

These schemes were established under the NSW Electricity Supply Act 1995. The Electricity Supply (General) Regulation 2014 details how the schemes work.

We review the Safeguard’s schemes every 5 years to check they are meeting their objectives and make adjustments where needed.

The most recent statutory reviews of the Energy Savings Scheme and Peak Demand Reduction Scheme were published in 2025. The first review of the Renewable Fuel Scheme will be published in 2031.

Rule change process

Rules published for each Safeguard scheme set out how certificates are created, how they can be accessed and what specific activities are included.

The Rules are reviewed and updated annually and as required to ensure they stay relevant to the technical and market conditions in which they operate.

We start each Rule change process by researching market conditions, new developments and technologies, and consulting with our stakeholders. This helps us decide what Rule changes may be needed to ensure each scheme remains relevant to market conditions.

We then hold a public consultation explaining our proposed Rule changes to ensure the wider NSW community can have their say.

The Rule is finalised and published in the NSW Government Gazette after consultation, meaning the Rule is now legislated and being implemented.

Through the Rule change process we can:

• incorporate stakeholder feedback and evaluation results
• make changes to Rule requirements, such as adding new equipment standards
• add activity schedules for new technologies
• make enhancements that maintain Rule integrity and/or reduce transaction costs
• improve harmonisation with other schemes.

Planned changes as of August 2025

Below are planned changes for each of the Energy Security Safeguard’s schemes until 2026. The dates are correct as of August 2025, and we will update them if timelines change or if we have new information.

In the figure below, ‘Gazettal’ is the Rule publication date and ‘Rule commences’ indicates the date that these changes come into effect.

Establishing the Energy Security Safeguard

The Safeguard was established after we amended the NSW Electricity Supply Act 1995, as part of the second emergency COVID-19 response bill package, passed by NSW Parliament.

In September 2021, we released the Energy Security Safeguard position paper (PDF, 0.7MB). It set out our final position on the design of the Energy Savings Scheme and the Peak Demand Reduction Scheme. This included reforms to the Energy Savings Scheme, the new Peak Demand Reduction Scheme design and improvements to scheme administration. This paper also summarised stakeholder feedback in response to the Energy Security Target and Safeguard consultation paper (PDF, 3MB).

In December 2021, we amended the NSW Electricity Supply Act 1995 to include the Renewable Fuel Scheme, which was introduced in the NSW Hydrogen Strategy (PDF, 9MB).  

In October 2022, we amended the Electricity Supply (General) Regulation 2014 to implement reforms announced in the ESS position paper and to create regulations for the PDRS.

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. 

Sign up for updates or email us to get involved in our research and consultation at [email protected]