Businesses gain a competitive advantage when they join the NSW Government Energy Savings Scheme (ESS) but how can government entities such as TAFEs, councils, hospitals and fire departments make the scheme work for them?
The NSW ESS provides both businesses and government entities with additional financial incentives for energy savings projects, in the form of energy savings certificates (ESCs). Certificates are provided for every megawatt hour (MWh) of electricity saved in eligible activities and can be sold to mandatory participants. Businesses can either bring their own energy savings projects to the scheme or develop their business to allow them to bring other businesses savings to the scheme.
Unlike private businesses, government entities are not able to return savings to customers, so how can they make the scheme work for them?
The Northern Sydney Institute (NSI), part of TAFE NSW, initially took part in the NSW ESS because the scheme provided 70 per cent of the capital required for energy savings programs at three campuses. NSI found the scheme to be a huge success and were impressed by the level of expertise provided, as well as the training support they received from the Office of Environment and Heritage (OEH). Training included a master class on “Developing the business case for sustainability and energy efficiency.” With a strong business case, funding was obtained for implementing the energy efficiency projects identified. These projects have made savings of $383,000 in the first year.
Other OEH training included sustainability marketing, stakeholder engagement, developing a GHG inventory for the Institute’s carbon emissions, energy efficiency training for HVAC and lighting. This training provided Institute staff with the skills to engage staff, make the best energy efficiency decisions and enabled them to implement lighting solutions largely funded by ESCs. NSI has exchanged all of the certificates it has received to reduce the price of upgrades.
Russell Burns, part of the Senior Government Team at OEH, explained that NSI was an unusual case study and the first example of where funding had been accessed and utilised in this way. OEH supports government entities that either come to them with a project budget or require finance.
“Funding usually occurs in the form of rebates through ESCs,” said Burns. “We have been working with the Department of Health on a large scale energy efficiency project, helping them to implement their own revenue streams to access programmes. They have also been accessing funding for upgrades through the Government Energy Efficiency Finance Facility. Additionally, we have a prequalified panel of Energy Services Companies (ESCOs) in place to facilitate energy performance contracts (EPCs) and funding. Within the agreement, we stipulate that the ESCs must be used.”
Some ESCOs are able to provide funding for EPCs. When this route is taken, project financing is built into the return on investment (ROI) from the projects, so both businesses and government entities are able to start making savings straight away with no upfront fee.
Robin Archibald, COO of leading Australian Energy Services Company (ESCO) Ecosave, is an advocate of the ESS.
“ESCs are an additional incentive to the lucrative returns that can be made on EPCs,” Archibald said. “Once energy upgrades are completed, ESCs can be sold on a once off or annual basis to energy companies, which require a minimum amount of certificates to meet their compliance obligations. Anyone can negotiate directly with an electricity retailer to sell the certificates but most energy companies prefer to negotiate with Accredited Certificate Providers (such as ESCOs) directly.”
In 2012 the ESCO worked with Charles Sturt University on a small energy efficiency project, saving the university $65,074 and 222 tonnes of CO2 per year. Had the university been able to take advantage of the NSW ESS, it would have benefited from a further $16 to $32 per MWh of electricity saved.