In our September 2015 Sustainability and Climate Change Quarterly update, we commented on the possible alignment of State Energy Efficiency Schemes (ESS).  Our September 2015 update can be viewed here.

As foreshadowed, on 13 October 2015, the Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 (NSW) (Bill) was introduced into Parliament, and was passed by both Houses on 20 October 2015.

The Bill proposes to amend the compliance and enforcement powers of the ESS’s administrator in relation to instances of non-compliance under the ESS’.

The ESS is a market-based mechanism, which sets legislated targets and provides financial incentives for households and businesses to save energy, but leaves it to the market to innovate and find the lowest-cost way of delivering energy savings and meeting the set targets.[1]

As discussed in our September 2015 update, a Statutory Review Report of the ESS was released in June 2015, which, amongst other matters, recommended the ESS:

  • be expanded to support gas efficiency
  • be expanded to allow gas efficiency activities to access financial incentives from 2016.

During the Second Reading Speech of the Bill, Mr Mark Speakman, Minister for Environment, stated that the Bill ‘will implement the key recommendations from that review and create more opportunities for households and businesses to save energy and reduce the cost of their energy bills’.

Importantly, the Bill proposes to:

  • expand the scope of the ESS, to include gas consumption and facilitate gas saving activities
  • extend the operation of the ESS from 2020 to 2025
  • amend the compliance and enforcement powers of the ESS’s administrator on instances of non-compliance under the ESS
  • increase the energy savings targets to 5% in 2015, 7% in 2016, 7.5% in 2017, 8% in 2018 and 8.5% in 2019, to provide certainty to the energy efficiency industry and facilitate sustainable growth.

As discussed in our September 2015 update, the State government was committed to continuing to work with other jurisdictions to harmonise their respective State-based energy efficiency trading schemes.  This Bill proposes changes with a view to facilitating that harmonisation.