The Energy Savings Initiative Working Group released a Progress Report in August 2012. Further detail about the Progress Report can be found on the Energy Savings Initiative Reports page.
Under the Clean Energy Future Plan the Australian Government committed to do further work to investigate the merits of a national Energy Savings Initiative (ESI). An ESI is a market-based tool for driving economy-wide improvements in energy efficiency. It would place a requirement on obligated parties (typically energy retailers) to find and implement energy savings in households and businesses. An ESI would help energy consumers to save money by encouraging the identification and take-up of energy efficient technologies.
Schemes currently operate in New South Wales, Victoria and South Australia and one is planned to commence in the Australian Capital Territory in 2013. The further work under the Clean Energy Future Plan will explore the costs and benefits of replacing existing and planned schemes with a national scheme. The work will include whether this would reduce complexity and duplication, and allow energy consumers in states without existing schemes to benefit.
The Clean Energy Future Plan states that the further work on a national ESI will be 'the subject of detailed policy analysis, economic modelling and consultation with the community, industry and state and territory governments'. The commitment outlines a number of key policy issues that the design work will consider:
- the annual targets that would apply
- sectoral and fuel coverage issues
- energy savings activities to be considered eligible activities
- how a smooth transition from state-based schemes could be managed.
Further, the Australian Government's analysis of a national ESI would explore scheme design options that:
- have broad coverage (that is, residential, commercial and industrial sectors), and
- create an incentive or a requirement to create certificates in both low-income households and in ways which reduce peak demand.
Subject to the findings of economic modelling and regulatory impact analysis, the Australian Government will make a final decision on whether to adopt a national ESI. A national scheme would be conditional on the endorsement of the Council of Australian Governments and agreement that existing and planned state schemes are folded into any national scheme.
The commitment within the Clean Energy Future Plan formed part of the Australian Government's response to the report of the Prime Minister's Task Group on Energy Efficiency. The Task Group recommended the 'introduction of a transitional national energy saving initiative to replace existing and planned state energy efficiency schemes, subject to detailed consultation on design, in the Task Group's final report.
The Energy Savings Initiative Working Group and Advisory Group
In line with the commitment made in the Clean Energy Future Plan, the Australian Government has established an ESI Working Group to lead the further work. The Working Group comprises senior officials from the Department of Climate Change and Energy Efficiency and the Department of Resources, Energy and Tourism.
The ESI Working Group:
- is drawing together the experiences and lessons learned from Australian and international energy savings schemes
- has commissioned economic and energy market modelling, and
- is undertaking comprehensive consultation with state and territory governments, industry and the community on the design of a possible national ESI.
The ESI Working Group released an Issues Paper in December 2011, and a Progress Report in August 2012.
The ESI Working Group's terms of reference and key dates of its work plan are available. The terms of reference reflect the Working Group's focus on a thorough cost-benefit analysis of a national ESI. The ESI Working Group's investigations are being assisted by an Advisory Group comprising state and territory government officials and representatives from peak industry groups, energy market organisations, and environmental, union, community and welfare organisations.
Stakeholder and public consultations are an integral part of the investigation. There have been a number of consultation processes to inform work on a possible national ESI. In late 2011, a series of workshops with stakeholders were held to discuss peak demand, low-income households, possible objectives of a national Energy Savings Initiative, and lessons learnt from Australian and international schemes.
Following the release of the Issues Paper in late 2011, a series of public workshops were held in capital cities to seek feedback on the Paper and more than 80 submissions were received through an open consultation process. Further feedback was received through workshops and submissions following the release of the Modelling Assumptions Report.
These consultation events proved valuable, with a range of stakeholders in attendance including individual businesses, industry associations, social welfare groups, and research organisations.
There has also been consultation with the ESI Advisory Group, including state and territory governments, and other industry and community stakeholders throughout 2011 and 2012.
An Information Paper titled 'Investigation of a National Energy Savings Initiative: economic modelling and potential regulatory impacts' is currently being prepared. The paper will present the results of the regulatory impact analysis of a national ESI, including the economic and energy market modelling, and stakeholders will have the opportunity to comment on the paper.
Reference has previously been made to a 'Regulatory Impact Analysis – Consultation Paper'. A regulatory impact analysis 'is the process of examining the likely impacts of a proposed regulation and a range of alternative options which could meet the government's policy objectives'. It is important to note that a formal regulatory impact analysis is not necessary at this time as the Australian Government is not proposing regulation but is undertaking further work to investigate the merits of a possible national Energy Savings Initiative.
The results of the Energy Savings Initiative investigation will be in an Information Paper which follows the standard approach and structure of a regulatory impact analysis. However, in the interest of avoiding confusion with a formal regulatory impact analysis, the Information Paper will be titled 'Investigation of a National Energy Savings Initiative: economic modelling and potential regulatory impacts'.
If the Australian Government decides to support a proposal for a national Energy Savings Initiative, it would take the proposal to COAG for agreement, and the Information Paper could be used to inform a formal regulatory impact analysis.
The Information Paper will be available on this website and stakeholders may provide comments on the paper. These comments may be used in conjunction with the Information Paper when presenting the results of the investigation about the merits of a possible Energy Savings Initiative to the Government.