Energy Savings Scheme (ESS)

Introduction to the Scheme and its functions

The Energy Savings Scheme (ESS) provides financial rewards for energy efficiency improvements in NSW. The ESS is administered and regulated by the Independent Pricing and Regulatory Tribunal (IPART), which accredits parties to create Energy Savings Certificates. (ESCs) and monitors compliance and performance. 

Under the Scheme:

1. Eligible energy-saving projects reduce electricity consumption by installing, upgrading or replacing energy-using equipment. The customer undertaking these projects is called the “Original Energy Saver”. They normally nominate an Accredited Certificate Provider (ACP).  An eligible energy saving project is called a “Recognised Energy Savings Activity” (RESA). 
2. Once an energy saving project is implemented and all documents are collected and checked, the ACP can calculate savings and create ESCs.  One ESC can be created for every tonne of carbon equivalent emissions (tCO2e) that is avoided as a result of the activity, using the rate of 1 MWh =1.06 tCO2e.
3. The ACP sells the ESCs to the market. Liable Entities, who are electricity retailers, must obtain ESCs and surrender them to IPART to meet targets required by legislation. ESC price varies over time according to market rates.
4. The ACP retains some of the sale value of the ESCs and passes the remaining funds to the Original Energy Saver, or to an installer or supplier who has given a discount to the Original Energy Saver for their products and services in anticipation of receiving the ESC value.

The Energy Savings Scheme is not a mandatory program of the NSW Government. Participation in the Scheme is entirely voluntary (except for Liable Entities). The Scheme is delivered by ACPs and their representatives, who do not represent, or operate on behalf of, the NSW government.  The government’s role is only to regulate the Scheme and monitor the compliance of ACPs and Liable Parties.

To become an ACP, Energy Conservation undertook a comprehensive accreditation process to demonstrate that it has full processes to prove the validity of the ESCs we create. We assume significant risks and responsibilities associated with ESC creation. We are required by IPART to enter into contractual relationships with our ESS representatives who may include installers, electricians and lighting suppliers

Record Keeping

Reliable record-keeping arrangements are critical to comply with the ESS. The assistance and cooperation of our representatives is vital to make sure that true and accurate records are kept at all times. The following are key documents we require to make ESCs. Others may also be requested in some cases.

Documents required to generate ESCs

1. Prior to Installation

Nomination Form - must be signed by the original energy saver (client) before project implementation

Copy of relevant licenses and Public Liability Insurance

Completed Agreement with Representatives and Training Pack.  

2. Details of Original and Upgraded EUE

Scope of Works and/or

Asset registers and/or

Equipment specifications and/or

Photographs

3. Site Constants

Type of documents depends on the site constants; however, it must be documented i.e. not verbal. May include:

Asset register and/or

Photographs and/or

Screenshots and/or

Production records and/or

Signed written client declaration

4. Meter specifications

Precision rating and/or

Calibration certificates and/or

Photographs

5. Independent Variable Records

Data files and/or

Production records

6. Dependent Variable Records

Data files and/or

Billing records

7. Upgrade Commencement

Documentation showing when upgrade works began which disrupted the normal functioning of the EUE such as:

Program of works and/or

Maintenance reports and/or

Photographs 

8. Certificate of Practical Completion or Equivalent Document

The document must:

Be produced by the party responsible for the design and commissioning of the equipment; 

clearly identify the location where the implementation occurred; 

show the implementation date and is signed by an appropriately qualified and responsible person.

9. Evidence of Recycling

Recycling Certificate from a qualified recycler

10. Purchaser Evidence

A valid tax invoice issued by supplier/installer addressed to the OES with a reference to the upgrade.   

The ACP must keep all this information in an approved, secure form for at least 6 years. It is desirable representatives keep their own records for at least two years.

Work Health Safety and Electrical Safety Issues

The safety of workers and customers is a priority concern under the ESS. Energy Conservation relies on our representative suppliers and installers to keep up to date with and comply with the requirements of relevant legislation and rules including:

• Work Health and Safety Regulation 2017 (NSW),
• Australian/New Zealand Wiring Rules 3000:2018,
• Gas and Electrical (Consumer Safety) Act 2017 (NSW)

Any worksite accidents, product failures or customer complaints relating to ESS projects should be reported to the ACP. 

Nomination of the Energy Saver

The Original Energy Saver (i.e. the purchaser of the End-User Equipment who will save energy from the proposed upgrade) must nominate Energy Conservation as their ACP using the correct Nomination Form. Nominations forms must be dated on the day that they are signed. It is essential that the Nomination form is lodged with the ACP or their representative prior to completion of the equipment upgrade.   

An Original Energy Saver cannot nominate more than one party to create ESCs for the same project. If a Nomination Form for the same equipment upgrade was signed previously, this should be clearly stated on any subsequent Nomination Form with a note on the reasons why and the current status of the relationship with the previous nominees. 

Recycling Requirements

A condition of the Energy Savings Scheme is that equipment removed during an upgrade must not be re-used and that, if the upgrade site is located within a Metropolitan Levy Area, lighting equipment containing mercury must be recycled in accordance with the recycling requirements of a recycling program such as ‘Fluorocycle’ or equivalent. Any refrigerants disposed of in the course of the upgrade must be recycled and evidence of the recycling must be obtained.

Audit of ACP

Mandatory third-party auditing of ACPs by a member of IPART’s Audit Services Panel is conducted to ensure the validity of energy savings certificates.

The Auditor will:

• Ensure that all required documents have been supplied.
• Check the validity and accuracy of documents supplied by the customer, installer and ACP
• Verify the calculations carried out by ACP to create ESCs.
• Conduct site inspections of a sample of energy savings project sites.
• Contact a selection of Original Energy Savers and ask them to confirm payments

If an auditor finds that any records are false, incomplete or inaccurate, the ACP forfeits the invalid certificates, which may involve substantial expense for all parties involved. Invalid or fraudulent ESC creation can also lead to restrictions in the ACPs accreditation, penalties or loss of accreditation.

For example:

• One ACP forfeited over 40,000 ESCs with a value over $800,000 and paid a fine of $20,000 because the Original Energy Savers did not meet the $5 co-payment rule.
• Another ACP forfeited over 1200 ESCs with a value over $25,000 and paid a fine of $20,000 because of concerns that the Original Energy Saver had not properly nominated the ACP prior to the completion of the energy savings project.

The ACP bears a substantial financial risk in the creation of certificates and this risk is tested with every audit. Accurate and reliable records are essential in protecting our integrity and keeping our accreditation.

Customer Service

In presenting the Energy Savings Scheme to customers, Energy Conservation requires its partners and representatives to:

• Explain that they are acting as a representative of Energy Conservation for purposes of delivering the ESS to the Original Energy Saver. 
• Accurately explain the Scheme to the Original Energy Saver. Energy Conservation can assist you with this by supplying brochures, fact sheets and by discussing the ESS directly with your customers.
• Fully explain the contents of the Nomination Form to the Original Energy Saver or their authorised representative before obtaining that person’s signature
• Provide details of the make, model and electrical characteristics of the End-User equipment being sold or installed
• Explain and demonstrate the End-User Equipment features, installation work and process of installation to the Original Energy Saver.
• Notify the ACP of any complaints or warranty issues associated with the implementation of the RESA. Under the Scheme Rules, such issues must be recorded in our register including whether these issues have been resolved and how they were resolved.