Energy Efficiency Schemes

There are two tradeable energy efficiency schemes in operation in Australia; The Victorian Energy Efficiency Target (VEET) scheme and the NSW Energy Savings Scheme (ESC).  Both schemes are described below.

Victorian Energy Efficiemcy Target (VEET) Sscheme

An energy efficiency scheme set up in Victoria whereby relevant entities have a legal obligation to surrender Victorian Energy Efficiency Certificates (VEECs) to the Essential Services Commission (Commission) in proportion to their scheme acquisitions.

A scheme acquisition is the purchase for on-sale to prescribed customers in Victoria of electricity from NEMMCO and/or gas from a producer, storage provided or interconnected pipeline operator or from VENCorp.  Prescribed customers are all residential customers of gas and electricity in Victoria. In the next phase of the VEET, from 2012 prescribed customers will also include small and medium sized businesses.

VEECs are electronic certificates which are created when an accredited person completes a prescribed activity.  A prescribed activity is defined in the VEET Regulations and includes measures to increase energy efficiency on common household items such as water and space heating, lighting and shower roses.  Each VEEC represents one tonne of carbon dioxide equivalent (CO₂-e) abated by a prescribed activity.

VEECs can be bought and sold on the open market at a price determined by supply and demand to anyone who is a VEET account holder. Any consideration for the transfer of VEEC ownership is the responsibility of the involved parties.  The Commission does not monitor or regulate this activity.

Energy Savings Scheme (ESS)

The ESS creates annual energy savings targets that must be met through the creation and surrender of Energy Savings Certificates (ESCs) in New South Wales. One ESC represents one tonne of CO₂ saved through reductions in the demand for electricity.

ESCs are supplied by Accredited Certificate Providers (ACPs) who create ESCs when they complete eligible activities to improve the energy efficiency in residential, commercial and industrial settings.

The demand for ESCs must be met from electricity retailers (Scheme Participants), who obtain ESCs from ACPs and then surrender the ESCs in order to meet their legislated requirements.  These requirements are based on the size of their share in the electricity market.

ESCs can be bought and sold on the open market at a price determined by supply and demand.