About the Initiative
Under the Clean Energy Future (CEF) plan the Australian Government committed to further work to investigate the merits of a possible national Energy Savings Initiative (ESI).
An ESI is a market-based tool for driving economy wide improvements in energy efficiency. An ESI would help 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 the Australian Capital Territory.
The CEF 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'. This further work is currently underway.
Subject to the economic modelling and a regulatory impact analysis, the Australian Government will make a final decision on whether to progress a national ESI. Adoption of a national ESI would be conditional on the agreement of the Council of Australian Governments and the abolition of existing and planned state schemes.
How is RET involved?
The Department of Resources, Energy and Tourism is working with the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education to further investigate the merits of a possible national Energy Savings Initiative (ESI).
In line with the commitment made in the CEF plan, the Government has established an ESI Working Group to lead the further work, comprising senior officials from the Department of Resources, Energy and Tourism and the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (ESI Working Group terms of reference).
The ESI Working Group's investigations are being informed by an Advisory Group comprising state and territory government officials and representatives of peak industry groups, energy market organisations, and environmental, union, community and welfare organisations.
An information paper Investigation of a national Energy Savings Initiative: economic modelling and potential regulatory impacts [DOCX 88 kB] has been prepared.
The information paper presents the results of the analysis into a possible national Energy Savings Initiative and includes input from economic and energy market modelling and stakeholder consultation. The information paper was developed by the ESI Working Group with the assistance of many stakeholders and the working group would like to thank all contributors.
If you would like to comment on the information paper, please send an email to firstname.lastname@example.org. 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 Australian Government. 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 information paper follows the approach and structure of a regulatory impact analysis. However, in the interest of avoiding confusion with a formal regulatory impact analysis, the information paper is called the Investigation into 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 the Council of Australian Governments through the Standing Council on Energy and Resources for agreement, and the information paper could be used to inform a formal regulatory impact analysis.
Release of consultant reports
Reports have been prepared by consultants to assist with design work on a possible ESI. However:
- these reports should not be interpreted as reflecting Government thinking on the design of a possible national ESI (for example, comments by consultants about the eligibility of activities for creating certificates should not be interpreted as a proposed list of eligible activities under a possible national scheme)
- the reports should not be interpreted as a commitment by Government to a policy or course of action.
Release of the progress report
The ESI Working Group released a progress report in August 2012 to update the Australian Government on the progress of work investigating the costs and benefits of a possible national ESI. It outlines the ESI working group's preliminary views on a range of issues relevant to a possible national ESI, including:
- an objective for a possible national scheme
- a proposed approach to complementarity with the carbon pricing mechanism, the Renewable Energy Target and the national energy markets
- sectoral and fuel coverage issues
- scheme architecture
- options within a national ESI for specifically targeting energy efficiency activities at low-income households or in ways that help reduce peak electricity demand.
The purpose of the progress report is not to present the ESI working group's final recommendations for a national scheme. Rather, this report narrows down options to underpin further cost-benefit analysis through the regulatory impact analysis.
The ESI working group released an issues paper in December 2011 and following that a series of consultation events, including public workshops and one-on-one meetings, were undertaken during January and February 2012. A public presentation on the modelling approach was held in Melbourne on 2 February 2012.