Market Update | 22 September

• NSW Government held two consultation sessions on proposed to changes to Commercial Lighting and Heat Pump programs under the Energy Savings Scheme (ESS)
• Both the ACT and QLD have delayed implementation of the NCC energy efficiency standards
• LGCs trended downward in all periods
• ESCs rally in all periods following the ESS consultation sessions

This week the ESC market rallied following two rule change consultations were held. The market rose to 30.50 after the spot had sat below $30.00 for 18 consecutive weeks. In stark comparison, the LGC market slid over the week with moderate trade volumes. Creation of NSW PRCs was at a distinct high, with 2.79 million certificates registered over the past 7 days. Generic ACCUs traded with minor fluctuations through the week while the HIR spot saw in increase in a single spot trade.

This week’s wider news covers the primary changes announced by the NSW Government for the Energy Saving Scheme:

ESS Rule Change Part One Consultation: Heat Pump Hot Water

This week the NSW Government held a Part 1 of the Energy Savings Scheme Rule Change for 2023. The consultation focussed on Hot Water Heat Pumps, proposing changes to the HEER and IHEAB methods for Heat Pump installations. These proposed changes are outlined below.

Reduction to the Baseline
(a) The baseline consumption of 60 litres per person, per day, referenced in the current rule for the residential water heating activities was found to be unaligned with real-life consumption levels, and is proposed to be updated to 45 litres per person, per day.
(b) Baseline calculations will consider heat loss in the various heat pump climate zones with higher baselines in alpine versus non-alpine regions.

Copayments
A co-payment of $200 excluding GST is to be introduced across all hot water activities.

Transition Time Proposals
Two transition timelines have been proposed for industry feedback:
(a) New Rule Provisions to apply to installations occurring from 3 months after the rule change implementation
(b) New Rule Provisions to apply to projects with a contract in place from 3 months after the rule change implementation

ESS Preliminary Consultation: Commercial Lighting 

On Thursday the NSW Government held a consultation session to release an initial set of questions for the proposed method changes to the Commercial Lighting Method under the NSW Energy Savings Scheme. The feedback questions have been raised ahead of a formal consultation upcoming toward the end of the year as part of the Stage 2 Rule Change for 2023. The method changes are outlined below: 

Deeming Period Modification 
The primary proposal has been based on the recognisable savings which may be attributed to the ESS rebate, rather than savings that would have occurred without the scheme. The current deeming period is based on the savings realised from the existing product, such as a Metal Halide Highbay, to an LED product for a range between 7-12 years dependent on project specifics. The department has established that the current ‘existing’ non-LED lights are moving toward end of life, and therefore would have to be replaced in the coming 1-4 years without the scheme’s involvement. 

It has also been identified that the product installed without the scheme may be less energy-efficient. Given this, the proposal made looks to recognise energy savings resulting from the ‘existing’ to ‘upgrade’ lights for 1-4 years – called Period One. In addition to this, energy savings may be recognised for additions years after this period for the savings calculated between the ‘upgrade’ light under the scheme and what would have been installed without the scheme – known as the ‘counterfactual’ product in Period Two. 

Therefore, the combined savings over Period One and Period Two may be less that the current method rules, though would not be a complete program reduction. 

The ‘Super LED’ Proposal 
Currently LED to LED changes are allowed under the scheme, provided that the ‘existing’ light is an approved product. The new Super LED proposal would allow for wide spread LED to LED upgrades where additional efficiencies may be realised. 

Control Multipliers 
The control multipliers, for daylight and occupancy sensors, have been suggested to be updated to the National Construction Code standard factors. This would result in higher energy saving recognition, especially in small spaces. 

Public Lighting Method Changes
A change in the calculation of public lighting has been raised, where the programming of lights to varying power levels for period of time may recognise additional savings. 

Copayment Capped at $5,000.00 per Site 
To increase the accessibility of the program, the copayment of $5.00 per MWh saved has been proposed to be capped at $5,000.00 per site. The aim of this is to prevent sites from opting for less efficient lights to decreased the copayment amount. 

Mine Site Hours Clarification 
Two new Space Types have been raised for Mine Sites, where 4500 hours and 7000 hours may be applied dependent on the area upgraded and operating hours of the site.