• IPART released a snap rule change immediately ceasing heat pump eligibility for PRCs
• IPART released updates on the BESS1 activity compliance requirements
• Our 2024 Year In Review highlights all primary program updates

2024 Year In Review.

This year saw a high number of program updates, changes and clarifications across all primary state-based certificate programs as they are all set to undergo a Strategic Review in 2025. This created an environment rife with opportunities for further energy efficiency progress in a number of areas, and created challenges requiring agility to adapt in others. The primary program updates that have occurred this year are highlighted below:

 

Peak Demand Reduction Scheme.

The PDRS rule change launched on 01 November was noteworthy, with the introduction of the battery activity and limits put on the creation of PRCs for commercial heat pumps, effectively exchanging the program’s highest source of PRCs. On 19/12 IPART released a snap change effective immediately excluding the eligibility of heat pumps under the program. This comes as products over 425L were readying to be released to market with the prospect of creating significant PRC numbers.

The NSW BESS1 and BESS2 battery programs launched on November 1st this year. In contrast to previous activity launches, the Building Commission and IPART are working closely together to review both desktop submissions in addition to conducting field audits, with both aiming to ensure that installations are compliant with all relevant Australian Standards. The activity has seen a steady positive trend as the requirements are further clarified by the regulator.

 

Victorian Energy Upgrades.

The VEU has continued to see historically high certificate prices as creation levels average below the target. The telemarketing and doorknocking bans were introduced in May and August respectively, which resulted in a shift of the program’s primary activities from high-volume activities such as weather sealing and in-home displays, to air conditioning and commercial heat pumps. Set to undergo a strategic review over the coming 24 months, the program’s intent, greenhouse gas calculation factors, annual targets and activities are all expected to be evaluated. Prior to this review, a consultation for a temporary set of targets to cover the 2025 and 2026 compliance years has been released. This would see a reduction in the number of VEECs required to be surrendered over the coming two years and may ease the upward pressure on the VEEC price.

 

NSW Energy Savings Scheme.

The 2024 ESS Rule Change encompassed the introduction of a minimum co-payment for IHEAB activities such as heat pumps, and the increase of the minimum co-payment from $33 to $200 for HEER activities such as air conditioning and heat pumps. The rule change also saw a revision of the baseline calculation for HEER heat pumps, resulting in a reduced volume of ESCs created per unit. The next ESS rule change with updates to the commercial lighting method is expected in the near term. With a long history of quality installations from partners like you, this year Ecovantage is proud to have secured an additional 3 NSW Government contracts for the delivery of Heat Pumps and Air Conditioning at rates up to 40% above the market rate. This provides an excellent opportunity for stable installation activity within the current ESC climate.

 

South Australian Retailer Energy Productivity Scheme.

The REPS program saw a great year with record activity in the first 6 months that saw many commercial allocations exhausted early, and an exponential uptake in Evaporative AC installations (HC3) and Ducted AC installations (HC2B). The program saw a revision of the transition factors for the 2024 and 2025 calendar years, which effectively lifted the volume of GJs created within certain activities. For some this boosted uptake, while for others it was the factor that allowed viability within the activity to be met. The REPS program is set to undergo a scheduled review in 2025 to set the trajectory for 2026-30. This review is expected to impact the program intent, annual targets, activities and calculation factors.

 

Renewable Energy Target.

This year the Large-scale Renewable Energy Target (LRET) amended the power station application process which has resulted in significantly faster application approval timeframes. A 90-day timeframe from the initial application lodgement (primary information) to all final information needing to be submitted. With this being met, a 6-week timeframe to approval now ensues.

In November the LGC market saw a rapid crash amid speculation of a potential oversupply in 2025 and beyond. This appeared to be a vast overcorrection that saw an abundance of sellers further driving the price down. The market has since begun to recover from its low of $25.00 in the spot, lifting over 25% in the last 30 days to the current spot rate of above $32.

 

Australian Carbon Credit Unit Scheme.

The ACCU scheme continued its work to further enhance project transparency. Several consultations surrounding activity reviews have been released that are due for results to be released in early 2025, including the sunsetting of 19 methods. This includes the Landfill Gas method, Alternative Waste Treatment method, and various other underutilized or not utilised methods. In December the Department made amendments to public information displayed for each program, where the following information is now displayed: crediting start and end dates, enforceable undertakings and estimation approaches used.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.