Environment Minister Rob Stokes unveiled the amendments, to take effect from January 2016, at the Energy Efficiency Council national conference this morning.
“The scheme will now give customers access to financial incentives to save on their gas bills through measures such as purchasing high efficiency gas heaters and hot water systems or upgrading their building to be more energy efficient," he said.
It will also free up gas supply for large gas users, a fast emerging strategic issue for NSW in particular as gas export capacity coming on line from next year will for the first time open gas markets to international competition. It will drive up prices and potentially threaten security of supply.
Gas will be incorporated through an increase in ESS targets and the introduction of a new conversion factor in the ESS Rule to enable gas savings activities to generate energy savings certificates without additional obligations on gas customers.
But Stokes pushed the review of ESS targets and penalty rates to next year, rolling it into the statutory review of the Electricity Supply Act due by June 30 that will also consider proposals such as improving IPART’s compliance powers to target poor performers and reduce costs to business.
"The extension of the scheme for a further five years demonstrates our commitment to the scheme. It is also intended to provide greater certainty for business investing in this area," he said.
The government will also introduce a 3% regional top-up to give added weight to activities in regional NSW, which face higher costs and smaller economies of scale. An information paper also notes it will strengthen administration with a detailed monitoring and evaluation framework, plus regular reviews of the ESS Rule.
Energy Efficiency Council acting CEO Luke Menzel welcomed the reforms of the "world leading program", particularly the extension to gas.
"The NSW Government has become Australia's leader in energy policy. While other governments are making policy on the run, the NSW Government is making steady, sensible decisions to keep energy affordable."
He also tied it to the G20 meeting in Brisbane on the weekend, which includes energy efficiency as one of three items under the energy and sustainability agenda, though climate change was notably removed.
"Energy efficiency has become a major global issue, which is why it's being discussed at G20. A recent report by the International Energy Agency found that energy efficiency has become the world's 'first fuel'. In 2012 global investment in energy efficiency was over US$310 billion, which was more than investment in either renewable energy or fossil fuel generation," said Menzel.