Energy Security Safeguard helps NSW businesses cut costs and emissions
Businesses can lower their energy bills and contribute to emissions reductions with NSW Government programs supporting energy efficiency and renewable technologies.
As the year draws to a close, it’s an ideal time for businesses to review their operations and identify ways to improve efficiency, cut costs, and reduce their environmental impact. With energy bills often a significant expense, exploring opportunities to save money while lowering emissions can deliver immediate and long-term benefits.
The NSW Government’s Energy Security Safeguard offers practical solutions for businesses to upgrade equipment, reduce peak energy use, and embrace cleaner technologies, helping them prepare for a more sustainable and cost-effective future.
The Safeguard operates through three key schemes:
- Energy Savings Scheme (ESS): Provides incentives for installing energy-efficient equipment and appliances.
- Peak Demand Reduction Scheme (PDRS): Focuses on reducing electricity use during peak demand periods.
- Renewable Fuel Scheme: Encourages the production and use of green hydrogen.
Incentives for Energy Efficiency
The Energy Savings Scheme offers businesses access to financial incentives to replace outdated equipment with more energy-efficient alternatives. These upgrades can help reduce electricity and gas consumption, lowering operating costs while cutting emissions.
Since its inception in 2009, the ESS has supported projects that will achieve 48,000 GWh of energy savings by 2033. By December 2022, it had reduced greenhouse gas emissions by 23 megatonnes—equivalent to the transport sector’s emissions in NSW for 2020.
Under the scheme, energy suppliers can generate Energy Savings Certificates (ESCs) by completing approved energy-saving activities. These certificates are updated regularly to reflect new technologies and industry needs.
Tackling Peak Demand
The Peak Demand Reduction Scheme aims to reduce energy use during peak times by offering incentives for installing residential batteries, efficient air conditioners, and large heat pump water heaters. By encouraging flexible energy use, the scheme helps prevent power outages and reduce electricity costs.
Between 2022 and 2040, the PDRS is expected to save households and businesses $1.2 billion on electricity bills. The program also supports NSW’s emission reduction goals: a 70% reduction by 2035 and achieving net zero by 2050.
New Incentives for Batteries
From 1 November 2024, new incentives became available for residential battery installations and Virtual Power Plant (VPP) participation. This includes financial support for behind-the-meter battery energy storage systems and for connecting them to VPPs to stabilise the grid during peak demand.
An updated PDRS Rule, published on 6 September 2024, introduced these changes, specifying equipment requirements for the battery incentives.
