NSW boosts energy efficiency target, expands scheme to include gas

The NSW government has announced significant changes to its Energy Savings Scheme including a more ambitious efficiency target and new incentives for homes and businesses to save on gas, as well as electricity.

The Scheme, set up in 2009 by the previous Labor government, provides an incentive for homes and businesses to purchase and install energy efficient products, like solar hot water and LED lighting. Eligible energy efficiency activities generate certificates based on how much energy they save.

The changes to the scheme, which were put before the NSW Parliament on Tuesday, will see it expanded to include gas and extended five years to 2025 following a review of its operations.

The Baird government has also raised the state’s energy savings goal by 70 per cent by 2020, increasing it from 5 per cent to 7 per cent in 2016 and progressively to 8.5 per cent by 2019.

The extension of the scheme in NSW to include gas presents a further challenge to Australia’s tightening gas market, as it comes under pressure from increasingly cheap renewable energy technologies.

Last week, Professor Iain MacGill – a lead researcher in the CSIRO’s Future Grid program – suggested that the threat of the “energy death spiral” and of grid defection by households and businesses was probably greater to Australia’s gas grid than its electricity grid.

“(Grid) departure is a challenge,” MacGill told the All-Energy Australia conference in Melbourne. “The gas grid should be more scared of departure and the death spiral (than the electricity grid), but we will see how that plays out.”

Meanwhile, the Energy Efficiency Council has welcomed the changes to the NSW Scheme, noting that the changes would save homes and businesses a total of $8.2 billion off their energy bills, while providing more certainty to industry and creating more jobs in the sector.

“Expanding the scheme will create jobs in NSW and help homes and businesses save energy. The scheme makes it cheaper for homes to cut drafts and install efficient lights, hot water systems and appliances”, said Energy Efficiency Council CEO, Luke Menzel.