The Peak Demand Reduction Scheme aims to reduce peak electricity demand in NSW.
The scheme does this by providing financial incentives to households and businesses to reduce energy consumption during hours of high peak demand. The scheme started with a demand reduction target of 0.5% in 2022. This will increase to 10% by 2030.
By reducing demand for electricity at times when demand is high, we will reduce the risk of power outages and reduce pressure on wholesale electricity prices across NSW. In addition, households and businesses across NSW could also save a total of $1.2 billion on their bills between 2022 and 2040.
By improving the flexibility of when electricity is used, we will also be able to use more renewable energy generation in the system. This will help NSW reduce emissions by 70% by 2035 and achieve net zero by 2050.
Notice to Market
A notice to market was released in April 2024 that outlined changes to the PDRS that were not consulted on in the October and November 2023 public consultation.
These changes include:
- limiting the commercial water heater activity to larger units that cannot receive Small Scale Renewable Energy Scheme incentives
- removing the removal of old fridges and freezers activity
- removing the installation of high efficiency motors activity.
These changes will take effect when the Peak Demand Reduction Scheme Rule commences approximately 3 months after publication. We expect this to occur in early Q3 2024. To find out more, including the rationale, read the Notice to Market.
The 2023 Peak Demand Reduction Scheme consultation
The consultation for the Rule 2 change is now closed.
The Peak Demand Reduction Scheme is updated annually. We are making changes to Rule 2, amending existing activities and providing suppliers with the opportunity to reach new customers and increase revenue generated through the scheme. To find out more about the proposed changes you can read the consultation, watch the recording of our public consultation webinar, or read the presentation slides.
The Peak Demand Reduction Scheme Rule
The Peak Demand Reduction Scheme (PDRS) Rule was amended on 17 February 2023. This ensures small businesses are eligible for specific activities related to commercial air conditioning, commercial water heating, refrigerated cabinets and motors. These are defined as HVAC2, WH1, RF2 and SYS1 in the rule.
The first rule was published in September 2022.
The focus of the first PDRS Rule is on:
- air conditioners
- heat pump water heaters
- refrigerated cabinets
- ventilation motors
- refrigeration motors
- pool pumps
- spare fridges and freezers.
- You can read more about the rule in the position paper.
The Peak Demand Reduction Scheme Compliance Rule
We published the Peak Demand Reduction Scheme Compliance Rule in October 2022. It is distinct 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 for the purpose of calculating individual liable demand.
Get involved
We look forward to collaborating with industry through targeted research, stakeholder engagement, and prototyping activities. We will provide regular updates about these activities on our website and via email.
If you have any questions about the Peak Demand Reduction Scheme, please contact us at [email protected].