Market Update | 31 May

• NSW Government announced a second round of changes to the ESS Rule this morning
• Battery ‘Perks’ – The NSW battery rebate under the PDRS explained
• The National Energy Performance Stratey (NEPS) summary
• Victorian Minister Lily De’Ambrosio confirms the VEU will remain an integral part of the Victorian transition plan ahead of the program review scheduled for next year

On the certificate market front this week, VEECs reached a new high of $115 amid below-target creation, PRCs experienced another period of very high volatility, and ESCs found stability following a brief rally last week. LGCs continued to soften in the near term, while ACCUs strengthened in the HIR spot. On a policy front, the primary changes this week centre around the NSW Energy Savings Scheme and Peak Demand Reduction Scheme. Both programs have been the subject of new policy (known the ‘Rule’) released in the past 7 days. A summary of all relevant changes are included below:

Additional Energy Savings Scheme Program Changes to Become Effective June 19th

This morning the NSW Government released a second series of program changes under the ESS to complement existing changes coming into effect in just shy of three weeks time. Many of these changes are in alignment with the recent PDRS rule announcements, and will alter ESC creation for a number of activities. Most notably, new pool pumps will now be eligible to create ESCs and new Refrigerated Display Cabinets (RDCs) will no longer be an available method. The changes are reviewed below:

• • Installation of a New Pool Pump introduced for ESC creation
  • Pool Pump installs will require a $200 copayment, lifted from $30
  • Pool Pump star ratings requirement dropped from 4.5 stars to 4.0 stars
  • Climate Zones for IHEAB heat pumps will now be drawn from AS/NZS 4234 (Standard for Heated water systems — Calculation of energy consumption)
  • Removal of New RDC installations as an eligible activity
  • 4 Sided RDCs will no longer be eligible
  • Reduced lifetime of RDCs with a display area exceeding 3.3m2 from 12 years to 8 years, resulting in a lowered ESC creation of 33%
  • Small business sites must now be evidenced by an ABN (HEER)

Battery ‘Perks’ for NSW Consumers

On Friday 24 May, the NSW Government announced the new battery rebate program for residential and small business batteries installed from 1 November 2024. A full review is available here. The rebate sits under the existing Peak Demand Reduction Scheme (PDRS), a NSW Government program that sits parallel to the NSW Energy Savings Scheme (ESS).

The PDRS will introduce residential and small business battery installations as an eligible technology from 1 November 2024. For eligible installations, ACPs such as Ecovantage can create PRCs where a battery is installed at a home or small business in three circumstances:

1. For a new battery installation

2. For a new battery installation being connected to a VPP

3. For an existing battery being connected to a VPP

The primary question fielded from many installers over the past week has been why the program has been announced 5 months in advance of its November 1st launch. Under certificate programs, a 3-6 month period from the date of policy release to the implementation (known as Gazettal) is both routine and necessary. The timeframe allows for Accredited Certificate Providers (ACPs) to gain accreditation for the activity, prepare compliance processes and onboard installers wishing to be involved in the program. This timeframe also allows for Auditors to become accredited under the new activity as necessary, to ensure that installers can smoothly create PRCs from the date of launch within the compliance guidelines. To date, the Government has not yet released the evidence requirements for the new program.

National Energy Performance Strategy (The NEPS)

In early April Australia’s National Energy Performance Strategy was released, and 8 weeks on both industry discussion and Department commentary have provided clarity to the intent and purpose of the NEPS. The NEPS is as per its name a Stategy – including a series of principles and outcomes. It is not a target and sits independently to the Net Zero target, allowing it to be flexed as required to meet nationally set targets. The below outlines the key items within the NEPS:

1. National Construction Code (NCC) to be updated. The plan has highlighted the importance of updating the NCC, with a view to heighten the minimum energy efficiency requirements.

2. Sector decarbonisation plans to continue development . The development of sectoral decarbonisation plans allows for the recognition of the vast difference in decarbonisation requirements across different industries and the challenges that each industry individually faces.

3. $300m allocated for Social Housing Upgrades

4. Expansion of the NABERS program for the built environment

5. Stocktake of industrial equipment requiring fuel switching to be completed to assist in further policy development

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.