Many successful initiatives have been implemented by the government to reduce carbon emissions. Currently there are many ongoing schemes active in the market to assist in becoming carbon neutral by the year 2050. The NSW government has introduced an all-new approach to reach that goal by introducing the Peak Demand Reduction Scheme (PDRS), which falls under the Energy Security Safeguard scheme.
The main goal of the plan will be to incentivize peak demand reduction initiatives while also providing financial incentives to lower energy consumption at its peak.
What is Peak Demand Reduction Scheme
The core idea of the PDRS scheme is to reduce energy usage at the peak hours of the day within the compliance period that is determined by the authority using reliable forecasts from the AEMO (Australian Energy Market Operator). Businesses and households will be motivated by monetary benefits and incentives to participate in the PDRS scheme.
Late last year, the PDRS scheme was integrated into the electricity supply act 1995 with a vision that aligns with the NSW ESS (Energy Saving Scheme).
According to the AEMO findings and forecast (expressed as a percentage of one in ten years maximum demand), the summer heatwave is the peak season when at a certain time length of the day, the demand rises like no other, which puts immense pressure on the power plants to meet the excess demand.
The PDRS focuses on dwindling the energy demand on that certain time length of the season, known as the compliance period. The target is set at half a percentage for this upcoming summer (1st November to 31st March), and eventually, it will increase to 10% by 2030.
The forecast of AEMO shows that the peak demand hours are 2.30pm to 8.30pm AEST which is 3.30pm to 9.30pm in daylight savings time. So, the main objective of the scheme targets that time length and encourages all households and businesses to reduce their energy consumption by offering discounts to install energy-efficient appliances.
Graph (Source)
By installing or replacing power-hungry appliances like refrigerators, heat pumps, air cons, TVs, lights, etc., peak hour energy consumption can be reduced, and a method of calculating the reduction has already been established to create PRCs (Peak Reduction Certificates).
All this process of creating certificates and selling them to a liable party comes into action through the help of ACP (Accredited Certificate Providers).
The liable parties of the PDRS are energy retailers and large energy users. They are responsible for buying and submitting a number of certificates generated by the ACPs to the authority within a certain time period, or else they will face the consequences in the form of financial penalties.
What is PRC? How Are They Calculated?
PRC (Peak Reduction Certificate) is deemed as the currency of the PDRS. Just like other energy-saving schemes and government rebates that generate certificates and are traded in the market to activate the campaign, PDRS also works the same way.
IPART (Independent Pricing and Regulatory Tribunal) is responsible for accrediting ACPs, and later on, ACPs create PRCs to be sold in the market. The process of creating PRCs is regulated by the IPART; however, after the creation of the certificates, ACPs are held responsible for the commercial arrangements of buying and selling the PRC.
0.1kW of peak demand reduction is equivalent to 1 PRC, which is averaged over the span of an hour within the time pre-determined by the compliance period. PRCs have an expiration date of 3 years. The liable parties are at freedom to surrender the certificates in the compliance year they are generated or the two following years after the generation.
Please note that there is an exemption for companies that produce green hydrogen in context to be the liable party. Also, those who have already been exempted by the ESS will be exempted under the PDRS as well.
So, in short, based on implementation, the number of certificates that may be computed is:
- The average reduction capacity was over an hour.
- throughout each of the six hours between 2.30 and 8.30 AEST
- During the compliance term, on one day
What's In It for You? Stack Up on Incentives
With the introduction of PDRS as a homeowner or a business now, there are more reasons for you to adapt to the new ways of electricity generation. As the scheme demands for there to be a reduction of energy use at peak hours, the feasible way to achieve so is to opt for energy-efficient appliances. Also, dividing the use between off-peak hours is also a way to partake.
In this stretch, you can go for such measures and take advantage of the incentives such as ESCs (Energy Saving Certificate), PRCs, and federal rebates like LGCs (Large-scale Generation Certificate), STCs (Small-scale Technology Certificate) so on. These schemes facilitate your transition to renewable energy and low-energy-consuming devices.
However, a project won’t be able to claim both ESCs and Australian carbon credit units. The NSW programs are also meant to complement the Commonwealth emissions reduction fund, offering a distinct avenue to obtaining incentives for energy-saving initiatives.
How Can Cyanergy Help?
We are active participants in many government-initiated projects, which includes all the Federal and state-level rebate schemes. Cyanergy is approved by the CEC also; we are one of the ACPs for the ESS, meaning we had generated many certificates before and successfully delivered them to the liable parties. On top of having all of the accreditations, we have an experienced in-house engineering team and certified skilled installers.
So, we can help you reduce your energy consumption in peak hours by replacing your power-hungry devices with energy-efficient ones and implementing all the scheme incentives to save your hard-earned cash as much as possible. Keep in mind that it costs more to run appliances at peak hours anyways because of the high demand.
Get in touch with us to know more about how you can stack up on the incentives and enjoy the benefits of PDRS.
