Victorian Energy Efficiency Certificates (VEECs) | FAQ

What is a VEEC?

A VEEC is a Victorian Energy Efficiency Certificate, which is created under the Victorian Energy Efficiency Target (VEET) Scheme.

How is a VEEC generated?

VEECs are based on the amount of external energy previously consumed by a site that is reduced via a solar array, fuel switching away from fossil fuels, or by onsite energy efficiency upgrades like HVAC, Lighting, BMS and so on. The more energy saved by a facility, the more VEECs you are able to create.

Each VEEC is representative of a volume of energy saved measured in megawatt hours.

1MW/h of reduced grid energy consumption = 0.53 VEEC

Alternatively, 1.89MW/h of energy created equals 1 VEEC.

To determine how many VEECs can be created from an upgrade, we calculate the amount of energy reduced at a facility over a year in MW/h by the performed upgrades array and multiply it by 0.53. This gives us the volume of VEECs generated for one year. We then claim this volume of VEECs for the calculated asset lifetime of the technology. For example the calculated asset lifetime for solar is 9.91 years, therefore creating 9.91 years of certificates upfront.

This process is different to the creation of Large-Scale Generation Certificates (LGCs) or Australian Carbon Credit Units (ACCUs) which both require site monitoring on an ongoing basis, with the financial incentives spread out over the coming years.

When is the VEEC rebate paid?

The major point of difference when it comes to VEECs is that they are a “hybrid certificate” in that they are measured for a year (like LGCs or ACCUs) but are then forward paid or “deemed” for the next 9.91 years – much the same as a VEEC is for a domestic hot water heat pump. In terms of offsetting a project outlay, having over 9 years of certificates paid at once is extremely attractive. Couple that with a higher certificate price when compared to ACCUs, VCUs or LGCs and you start to see why VEECs for commercial and industrial facilities are so appealing.

Can I claim VEECs for any project?

Due to the input required to claim VEECs, the scheme only becomes financially viable for larger-scale upgrades reducing site energy use by a minimum of 180 MWh of electricity or 1,000GJ per annum of natural gas.

Can I submit the VEEC claim myself?

Certificates can only be created by entities accredited by the Essential Services Commission (ESC) under the Victorian Energy Upgrade (VEU) system, such as Ecovantage. These entities are known as Accredited Certificate Providers (ACPs).

Is the certificate market volatile?

VEECs are some of the most financially lucrative certificates on the market, with returns that easily outweigh alternative schemes available. However, there is no doubt that the market can be volatile. 

At Ecovantage, we understand this, which is why we have options available that mitigate this risk for you. In all VEEC contracts, we are able to offer to lock in a fixed price per VEEC as well as support facilities apply for funding to provide an upfront (pre-measurement and verification) option, which means we are able to guarantee you locked-in rates when the market is strong. This allows you the peace of mind that your rebate pricing won’t be affected by changing prices. 

Can existing solar arrays or site upgrades claim VEECs?

VEECs are only available to new projects which have not yet begun any construction or works. The scheme is not available to existing solar systems or recent plant upgrades. 

It is vital to note that projects will be denied by the regulator if any site works have started prior to their approval of an application. This is why it is critical to engage an ACP, like Ecovantage, to obtain approval from the Regulator before construction works begin.

What is the 12 month Measurement & Verification for?

To accurately calculate the facility’s energy reduction, we have to establish a consumption baseline by gaining 12-18 months of data from your business’ energy usage.

Following an upgrade’s energisation, there is a 12 month measurement and verification period that ensues. Because a VEEC is representative of energy consumed that has been saved from the grid, each VEEC created is linked to a unit of site activity. 

Let’s take a toothbrush factory as an example, we would link every 1 tonne of toothbrushes produced to a unit of energy. Alternatively, if it was a shopping centre, each person who walks through the door is linked to a unit of energy. This process is undertaken by one of our skilled engineers who makes an equation to guarantee you the best outcome in your VEEC claim. 

What happens if the company’s production changes in the M&V period?

In this period we need to ensure that there are no scheduled or foreseeable disruptions to production or usage. With unpredictable events such as COVID, it begs the question, what happens if due to unforeseeable circumstances, a factory or company needs to shut down or drastically reduce its usage for a period within the measurement and verification time frame? 

Fortunately, the Regulator has released a policy for this. Whether energy production is halted, slowed, adjusted or establishes a ‘new normal’ baseline, there are policies that cover this. As long as the disruption can be directly linked to a state of emergency or state of disaster, it can be handled. 

As your ACP, we take care of this for you, so it’s not something you have to be concerned about navigating on your own. Our experienced engineers and compliance teams at Ecovantage will support your claim through every step to approval. They are experts in the ever-changing VEEC landscape, here to assist you to gain the best possible outcome through the VEU Scheme.

Who can claim VEECs?

With the clear financial benefits, there are a few eligibility caveats. 

First, the program is only available to Victorian sites. The site needs to have 12 months of energy usage data available prior to system installation to form a ‘baseline consumption’. As long as your site or business has been in operation for at least 12 months prior to installation of any upgraded plant, this data can be obtained.

The site cannot be a registered Scheduled Activity Premises (SAP). The VEU program reduces greenhouse gases by providing access to discounted energy efficient products and services. Scheduled activity premises are exempt from the program, unless the occupier opts into the program. Once the occupier opts into the program, they will be eligible to generate VEECs. 

VEECs only become viable for larger-scale upgrades that result in the needed energy savings as listed above. They can only be created by entities accredited by the Essential Services Commission (ESC) under the VEU program. 

At Ecovantage, we have several highly-experienced engineers and compliance officers who take care of the project from start to finish for you ensuring all of the boxes are ticked. They check that everything is generated, compiled and submitted to fulfil the regulatory requirements so that before a project begins, it has been approved and marked as eligible by the Regulator.

How can we explore VEECs for our planned upgrades?

Our experienced team at Ecovantage can guide you through your eligibility, what is required and your estimated VEEC rebate. 

To receive a VEEC quote for your project, or would like to explore your options for future projects, simply enter your details into the form below and one of our team will be in touch with you.