New Changes to the ESS

In April 2016 the Energy Saving Scheme rules surrounding Energy Saving Certificates (ESCs) were changed to include gas for the first time.

The NSW Government recognises that overall energy efficiency is a key parameter for success going forwards. By reducing both Electricity and Gas consumption in the State, CO2 emissions can be greatly reduced.

The ESC factors are based on the primary energy equivalence of electricity. By saving electricity or gas, the NSW government reduce the requirement for energy generation in the state.

What does this mean?

By Generating ESCs for energy saving projects, the Capital cost of these projects can be greatly reduced. On the current Market on ESC is worth approximately $25AUD and can be projected over a ten year period.

How can you Generate ESCs?

Electricity – By undertaking an energy saving project that reduces consumption by 1MWhr, 1.06 ESC can be generated. As the electricity that we use is around 35% efficient there is an overall primary energy saving.

63.2 ESC - Elec OEH energy efficiency savings carbon reduction certificates

Gas – By completing an efficiency project that reduces gas consumption by 1GJ, 0.11 ESCs can be generated.

  63.1 ESC - Gas OEH energy efficiency savings carbon reduction certificates

 Fuel switching – By switching from Electricity to Gas (for example boilers) or from gas to electricity (e.g. chillers) there may be the possibility of an overall energy efficiency saving. ESCs can be generated against this energy efficiency.

So how does this apply to Cogeneration?

Using the Fuel switching application, Cogeneration is a perfect example of increasing site energy efficiency and producing ESCs. The following is an example of a Cogeneration system that would be suitable to produce certificates.

Case study

ABC Secondary School operates a 50m outdoor Olympic pool. It costs them 200KW of electrical power and 1GJ/hr of gas.

A 100KW cogeneration engine uses 282KW or 1GJ per hour.

Cogeneration running hours 6000 Hours/year
Existing Electricity consumption 200 KW
Cogeneration engine output 100 KW
Electricity saving 100 KW
Annual electricity saving 600 MW/year
ESC Gain 606 Certificates
Existing gas consumption 1.0 GJ/hour
Existing Boiler efficiency 80 %
Hot water produced 0.80 GJ/hour
Hot water output of Cogen 0.5 GJ/hour
Additional gas required (0.8 – 0.5)/0.8 = 0.37 GJ/hour
ESC cost 248 Certificates
NET ESC Gain 388 ESC per year

Based on standard decay factor of 0.9 and an ESC price of they can expect a rebate of $63,175AUD.


Measurement and verification is an important process in any energy efficiency project. Accurate baselines and models must be created to be able to generate ESCs for electricity, gas or fuel switching projects. Goldman Energy can help with baselining, model creation, ESC applications and certificate generation. By working closely with certified ESC generation companies we can assist our clients in achieving the high rebate available.

 Eligible activities:

  • Increasing the efficiency of consumption of a Gas, where the Gas is combusted for stationary energy
  • Fuel switching from electricity to Gas, or Gas to electricity

 Not eligible:

  • Fuel switching to non-renewable fuels other than gas
  • Saving gas where the gas is flared
  • Generating electricity, except where electricity used for equivalent goods and services and <5 MW nameplate rating
  • Fuel switching that leads to net increase in greenhouse gas emissions


Eligible Not Eligible
  • 4MW Gas fired cogeneration in office building where electricity and heat used on site
  • Cogeneration plant where any electricity exported
  • Burner upgrade on dual fuel fired boiler
  • Saving biogas that is then flared
  • Heat recovery project that saves gas
  • Fuel switching to coal fired boiler
  • Replacing electric resistance hot water heater with gas hot water heater
  • Fuel switching to biomass fired boiler


Source: ESS Rule change consultation forum presentation 12Nov15