NSW Energy Savings Scheme Rule of 2009: price starts at $35/MWh

First 9 of 9 paragraphs shown The policy-plan was “the Rule will build on the existing Demand Side Abatement (DSA) Rule of the NSW Greenhouse Gas Reduction Scheme (GGAS), increase the number of activities that are eligible, and make it simpler for businesses to create ESCs”.
After-tax price for energy savings of $35 per MWh: Scheme Participants who do not surrender sufficient ESCs will be subject to a penalty for any shortfall. The penalty rate will be $24.50 per megawatt-hour (MWh) to provide an incentive for compliance. This is equivalent to an after-tax price for energy savings of $35 per MWh and effectively caps the ESS cost at this level.
Savings cost less than $35 per MWh: The ESS target was chosen to deliver optimal levels of both electricity bill savings and net economic benefits. It is expected that these energy savings can be delivered for less than $35 per MWh.
Government may increase or decrease the target: ESS legislation will provide a transparent, rule-based mechanism for adjusting the target while giving stakeholders sufficient notice of any changes. This will allow the NSW Government to increase or decrease the target, depending on the demonstrated availability and cost of energy savings.
Under IPART: The ESS administrator and regulator will be the NSW Independent Pricing and Regulatory Tribunal (IPART), which currently has these roles for GGAS.
Retailers under pressure: The target will be allocated each year to electricity retailers in proportion to their liable electricity sales, which are total sales less sales to exempt emission-intensive trade-exposed activities. The ESS target will start from 0.4 per cent and increase to four per cent of total annual NSW electricity sales over four-and-a-half years to allow time for the market to develop the new business models required to deliver these savings.
Twiddling begins, with Ministerial Order: The NSW Minister for Energy will publish a Ministerial Order that will list the exempt activities for the ESS.Mandated energy savings requirement for retailers start at 0.5 per cent of liable sales, then increase to five per cent by 2014 and continue at that level until 2020.

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