Mandatory obligation schemes require liable entities (generally energy retailers) to meet certain targets in relation to energy efficiency or renewable energy use.

Some of the schemes enable the trading of certificates for eligible activities which are bought by liable entities to enable them to reach their targets.

The schemes provide a financial incentive for energy users to invest in clean energy initiatives, on top of the ongoing benefits which accrue to the business through the energy savings or emission reductions generated by the project.In this section

State-based schemes

NSW Energy Savings Scheme

The ESS has replaced GGAS in NSW for energy reduction processes. ESS provides financial incentives to to companies who undertake eligible projects that either reduce electricity consumption or improve the efficiency of energy use.

Electricity retailers and other liable parties must obtain and surrender Energy Savings Certificates (ESCs or es-keys) to meet their energy efficiency targets , which are calculated in tonnes of carbon dioxide equivalent.

Victorian Energy Efficiency Target

VEET is a ‘tradeable certificate’ scheme aimed at increasing consumer energy efficiency, reducing emissions, and promoting investment, employment and innovation in energy efficiency industries.

Accredited installers offer householders and businesses a range of prescribed energy efficiency activities designed to reduce their energy use. The installers can convert these to Victorian Energy Efficiency Certificates (VEEC). The VEECs are typically sold to large energy retailers in Victoria which are required by law to surrender a certain number each year.

SA Retailer Energy Efficiency Scheme

The REES is a South Australian Government initiative that requires energy retailers to help households and businesses save on energy use and costs, and lower their greenhouse gas emissions. 

ACT Energy Efficiency Improvement Scheme

The EEIS aims to:

  • maintain momentum on ambitious, but achievable targets for low cost and high electricity and gas savings. Households and businesses should see a decrease in their energy bills as a result of energy efficiency improvements
  • deliver economic benefits of around $40 Million in Net Present Value to the ACT economy, and $106 Million in Present Value to householders (as modelled for the 2015 Regulatory Impact Statement)
  • give even greater certainty to energy retailers about their obligations under the scheme
  • harmonise the ACT system with those of other jurisdictions

National scheme

Large-scale Renewable Energy Target Scheme

Companies generating energy on site using renewable energy sources may be eligible to create large-scale generation certificates (LGC) through the Large-scale Renewable Energy Target Scheme. LGCs can be sold or traded to liable entities, in addition to the any sale of electricity to the grid.

To be eligible, companies must generate their electricity from approved renewable sources and feed that into the electricity grid.

The scheme was established to ensure that 20% of Australia’s electricity supply comes from renewable sources by 2020. It is divided into Large and Small-scale Renewable Energy schemes with a large-scale scheme target of 41 000 GWh by 2020.  One LGC is equivalent to 1 MWh (megawatt hour) of eligible renewable electricity generated above the power station’s baseline. LGCs are created in the online REC Registry. Liable entities have a legal obligation to buy LGCs and surrender them to ORER on an annual basis.