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is one of the energy efficiency schemes
operating across the country to reduce
greenhouse gas emissions.
It is also designed to encourage
investment, employment and technology
development in industries supplying
goods and services that reduce consumer
use of electricity and gas.
The scheme operates by placing a
liability on large energy retailers in
Victoria to surrender a specified number
of VEECs every year. Each certificate
represents one tonne of greenhouse
gas abated.
The VEET Act and regulations allow
for accredited entities to create VEECs
when they help consumers make selected
energy efficiency improvements to their
home or business.
For example, LED lighting that meets
the regulations is eligible for a deemed
quantity of VEECs when installed by an
accredited business.
“Electricians can now register with
the Essential Services Commission
– which administers VEET – so that
installation of energy efficiency
product can attract VEECs,” a Victorian
Department of Primary Industries
spokesman says.
“When electricians involve themselves
in the scheme, either directly or
through a third party, the revenue
created through the sale of certificates
means they can offer discounts to their
customers, thereby making themselves
more competitive.”
VEET is a market-based scheme,
meaning the value of individual
certificates is determined by supply
and demand. Electricity retailers are
required to purchase or generate VEECs
to reach defined targets each year.
Greenbank settlements manager and
head of energy efficiency Ben Redmond
explains that the VEET was established
as a residential scheme. Home owners
could change their incandescent globes
to CFLs or electric water heaters to
instantaneous gas or solar, which would
reduce their energy consumption.
“The number of tonnes of greenhouse
gases you abated is how many
certificates you earned,” Ben says.
“The VEET program was then
expanded into the commercial market,
and the advent of LED meant that the
most common way of earning VEECs was
the replacement of halogen lamps with
LED lighting.”
WHAT IS THE ESS?
Just like its Victorian counterpart,
the NSW ESS reduces electricity
consumption in NSW by creating
financial incentives for organisations to
invest in energy savings projects.
“Energy savings are achieved by
installing, improving or replacing energy
savings equipment,” a spokesman says.
“The ESS is governed by NSW
legislation. It places a mandatory
obligation on ‘liable entities’ (eg: energy
retailers) to obtain and surrender ESCs,
which represent energy savings.
“The development of the policy
framework is the responsibility of the
Office of Environment and Heritage
and the Department of Trade and
Investment, Regional Infrastructure
and Services.
“When businesses invest in reducing
their energy use, ESCs are created by
voluntary scheme participants that
have helped to implement those energy
savings activities.
“Electricity retailers, which are
mandatory scheme participants,
then buy the ESCs to meet their own
legislated targets, as required by law.
“The price of certificates varies due
to supply and demand and can fluctuate
considerably depending on market
conditions. Historically, ESCs have
traded between $14 and $32.
“There is no maximum price for an
ESC; however, the penalty price acts as
a practical maximum price: if a liable
entity does not surrender the required
number of certificates in a given year
(excluding any shortfall it is allowed to
carry forward to the next compliance
year), it must pay a penalty.”
THE SOUTHAUSTRALIANSOLUTION
Most recently, in December 2015, the
South Australian Government passed its
own legislation that would make similar
savings possible in the South.
The
Local Government (Building
Upgrade Agreements) Amendment
Bill 2015
is designed to overcome
barriers to environmental upgrades
of existing commercial buildings
– upgrades that can reduce costs
for tenants while improving the
carbon footprint and environmental
performance of existing buildings.
“This Bill has the potential to create
hundreds – if not thousands – of
important jobs and free up more than
half a billion dollars in potential CBD
capital investment,” Climate Change
Minister Ian Hunter says.
“It clears the way for building owners
to begin revitalising our ageing building
stock, which will have the added benefit
of advancing our plans for Adelaide
to become the world’s first carbon
neutral city.
“For commercial property owners,
building upgrades can reduce operating
costs, increase yields, help attract and
retain tenants and improve asset values.
“Benefits to tenants include net
reductions in operating costs, improved
indoor amenity, staff productivity and
contributions towards corporate social
responsibility goals – not to mention
greenhouse gas savings of up to 32%.”
The Property Council of Australia’s SA
executive director Daniel Gannon says
the legislation will lead to a number of
benefits, in particular to tradespeople.
“The Building Upgrade Finance
mechanism makes economic sense, not
only for building owners and occupiers as
a means of managing their utility costs,
but for the businesses that can provide
the clean technologies and solutions