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Market Recap | June 2024

In case you missed it, here’s a recap on what’s been happening in the energy market over the last month.

Victoria Proposes New Minimum Rental Standards

This week saw Victoria propose new rules to improve rental properties. These rules aim to set minimum standards for basic technologies like ceiling insulation, draught proofing and efficient electric hot water heaters for all Victorian renters. This would make rentals warmer in winter, cooler in summer, and cheaper to run. Supporters say this is important for renters’ health and wallets, especially during a cost of living crisis. The Energy Efficiency Council’s (EEC) CEO, Luke Menzel, said these changes are a game changer for millions of renters around the state: “With more and more Victorians renting, it is more important than ever that those rentals pass the pub test in terms of health, comfort and affordability.” Those proposing the changes believe most landlords want to do the right thing and will be happy to follow the proposed changes on the basis that the upgrades are affordable and the changes provide clear guidance on what the minimum requirements are.

Measurement and Verification Business Impacts Explained

Ecovantage’s Arlen East recently presented to industry peers and State Government on the impacts Measurement and Verification claims can have on Commercial and Industrial Upgrades at the ESIA VEU Seminar. This week saw Arlen’s presentation published into an article unpacking the influence of measurement and verification (M&V) on project finances, particularly those undertaken under Victoria’s energy upgrade program, the Victorian Energy Upgrades (VEU). M&V, which assesses a project’s actual energy savings, is often a poorly understood concept by first-time decision makers, this article clarifies its role in ensuring a project’s financial viability. Understanding how M&V impacts financial returns is crucial, especially for Victorian businesses contemplating energy efficiency upgrades. The article explores and demonstrates how accurately measuring the energy saved through these upgrades can significantly impact the project’s financial attractiveness. With record-high VEEC prices occurring, M&V projects are becoming highly rewarding for educated participants. Read the full article here.

$190 Million in Industrial Funding Released Under ARENA

Industrial facilities, particularly those in regional areas, have a new round of funding available to them. Applications are now open for the first funding round of the $400 million Powering the Regions – Industrial Transformation Stream (ITS). ARENA is managing this program, with $150 million being made available to support regional industries that want to reduce emissions from their heating processes and off-road transportation. The funding round is expected to run until the end of 2024. Industrial facilities not located in regional areas can access funding through the separate $40 million set aside under the National Industrial Transformation Program. For full details and application resources, visit the ARENA ITS webpage.

All-time high VEECs pricing surge halted

After reaching historic highs week after week, the VEEC market experienced a sudden drop from $115.00 down to $105.00 and falling.

This comes despite increased weekly creation volumes failing to reach weekly creation targets required to meet annual surrender targets for liable entities.

Consequently, the market’s liquidity surplus continues to erode and is forecasted to be exhausted in mid-2025 should creation volumes maintain their current trendline.

Commercial Building Disclosure Program to be expanded, consultation released

In exciting news this week, the National Australian Built Environment Rating System (NABERS) program is set to be expanded to cover commercial buildings over 1000sqm under the Commercial Building Disclosure (CBD) Program.

The announcement was released this week following a report commissioned by KPMG, which recommended a formal cost-benefit analysis and a regulatory impact assessment process for each three of the seven policies assessed in their report with option two leveraging NABERS.

Anyone reading this who is interested in a NABERS rating for their business, please reach out to our Account Management Team for more information.

Decarbonisation Survey for Victorian Businesses

The Victorian Chamber of Commerce and Industry is currently conducting a survey aimed at gaining deeper insights into the needs of Victorian businesses as they navigate the transition to low-carbon energy alternatives. This initiative aims to uncover key opportunities and potential barriers to assist in further developing the state’s degasification roadmap for a lowered dependence on Natural Gas.

Understanding the complexities associated with fuel switching, gas efficiency and electriciation for industry is paramount in ensuring the Government plans and targets are considered. Ecovantage assists businesses with diverse needs through our expertise in Measurement and Verification (M&V) projects as they undertake these projects. These initiatives are tailored to facilitate fuel switching and support businesses in their decarbonisation efforts to adopt cleaner energy solutions. If your business is directly impacted, we encourage you to participate in the survey to ensure your voice is heard.

NSW HEER Program Changes

This week, anticipated changes to the Energy Saving Scheme (ESS) Rules have taken effect, particularly impacting the Home Energy Efficiency Retrofits (HEER) program. The minimum co-payment under HEER has been increased significantly from $30 + GST to $200 + GST per end-user equipment (EUE). These updates apply to installations of water heaters, air conditioning units, and pool pumps under Activities D5 and D16-D21 of HEER, mandating a minimum co-payment of $200 + GST. Furthermore, Activities D17-D21 will see changes to baseline energy consumption and coefficient adjustments for water heater installations.

NSW IHEAB Program Changes

In addition to HEER, changes to the Installation of High Efficiency Appliances for Business (IHEAB) have also been implemented. Similar to HEER, IHEAB now requires a minimum co-payment of $200 + GST per EUE (Activity F16, F17).

Further effective changes:

    • Four-sided refrigerated display cabinets are no longer eligible for ESC creation
    • New RDC installations are no longer eligible for ESC creation, the RDC must replace an existing product of the same type.
    • RDC asset lifetime has been reduced from 12 years to 8 years for classes 7, 8, and 11.

The VEU announces a delay on Refrigerated Display Cabinets

The Victorian Energy Upgrades (VEU) program has issued an announcement regarding the delay of the Refrigerated Display Cabinet (RDC) Activity. This decision follows concerns raised by the Department of Climate Change, Energy, the Environment, and Water (DCCEEW), prompted by recent issues in New South Wales and historical challenges within the VEU framework. DEECA has advised that the introduction of incentives for plug-in RDC activities will be postponed until further notice. This delay allows for a thorough investigation into the activity to be consistent with the Act and the program. RDCs with GEMS classes 12 to 15 which use a common central condensing system to supply units, requiring a qualified tradesperson to install, remain eligible under the program.

VEU Released Guidance on Recent Telemarketing Ban

On Wednesday, June 26, the VEU released guidance clarifying the compliance requirements under the Telemarketing Ban after receiving feedback from its stakeholders.  The summary of the program update covers the following:

  • Collection of consumer’s email addresses
    • Further clarification that it is not a mandatory requirement for consumers to provide email addresses in order to receive upgrades under the VEU program.
    • In lieu of email addresses, a note on the email field stating ‘Not applicable’ or ‘Did not wish to disclose’ are required and surveys are to be conducted via phone recording instead.
  • When a consumer has been contacted via telephone or call to obtain information in regards to the VEU a written express consent must be maintained.
  • A reminder on the ban of ‘cold-call’ door knocking due to come into effect on 1 August 2024


VIC government considers new standards to improve energy efficiency for rental properties

The Victorian Government raised the possibility of lifting standards for energy-inefficient rental properties in recent times. With rises in cost-of-living, the program is said to save renters hundreds of dollars per year in energy costs, and have a net cost to property owners of $5,000.

Set to commence from 30 October 2025, the proposed new standards would set minimum requirements on ceiling insulation, draught proofing, and replacements of old hot water units and air conditioners reaching end-of-life.

This would also include a minimum star rating system in rooms such as the main living area, showers heads and all external doors to be weather-sealed.

Energy Rebates up to $350 will be available for low-income households in NSW

From the 1st of July 2024, up to $350 in energy rebates will become available to low-income households in NSW.  The state has set aside an additional $100 million in it’s budget to support households in dealing with inflation and escalating costs of living, particularly due to rising energy expenses.

Proposed changes are in the form of:

    • Increases in Family Energy Rebate from $180 to $250
    • Increases in Seniors Energy Rebate from $200 to $250
    • Increases in Low-Income Household Rebate from $285 to $350
    • Increases in Medical Energy Rebate from $285 to $350

While Gas rebates remain unchanged at $110.

The state’s rebates are set to be an addition to the federal government’s $300 energy bill relief for every household.

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.

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