Submission Guidelines for the Creation of New Activity Categories
September 2011
Table of Contents
- Introduction
- Summary details
- Claims against assessment criteria
- Additional considerations
Appendix A
1. Introduction
The Victorian Government is committed to easing pressures on household budgets. Improving the energy efficiency of households and businesses is a direct method of reducing energy bills. Households participating in the Victorian Energy Saver Incentive (ESI) scheme can receive incentives for undertaking energy efficiency activities that are prescribed under the scheme as well as enjoying the benefits of improved energy efficiency.
From 2012, the scheme will be expanded to permit businesses to receive incentives for undertaking energy efficiency activities and to promote broader industry development.
This document provides information to allow interested parties to propose new energy efficiency activities relevant to households and/or businesses for potential inclusion in the ESI scheme.
The ESI Scheme
The “Energy Saver Incentive” is the public name for one of the first mandatory energy efficiency target schemes in Australia. The target itself is called the Victorian Energy Efficiency Target (VEET) and it is established under the Victorian Energy Efficiency Target Act 2007 (the Act).
The ESI sets a target for achieving lifetime greenhouse gas emissions abatement from implementing energy efficiency activities prescribed by regulations, for which certificates may be created. Energy retailers are required to meet a proportion of the target by acquiring certificates or pay a penalty for any shortfall.
Certificates may only be created for undertaking prescribed activities. Each certificate represents 1 tonne of lifetime greenhouse gas emissions abatement beyond what would have occurred under business as usual (eg in the absence of the scheme). The objectives of the Act are to:
- reduce greenhouse gas emissions;
- encourage the efficient use of electricity and gas; and
- encourage investment, employment and technology development in industries that supply goods and services which reduce the use of electricity and gas by consumers.
Section 15 of the Act describes the kinds of activities which may be prescribed to generate certificates under the ESI. Activities must result in a reduction in greenhouse gas emissions that would not have otherwise occurred.
The ESI scheme commenced on 1 January 2009 and is administered by Victoria’s Essential Services Commission (ESC). The first phase of the scheme 2009-2011, will save 8.1 million tonnes of greenhouse gas emissions from being emitted over the lifetime of the activities undertaken. The first phase incentivises residential energy efficiency activities.
The second phase of the scheme will run from 2012 to 2014 and will save 16.2 million lifetime tonnes of greenhouse gas from being emitted and will be expanded to allow businesses to also receive benefits from undertaking energy efficiency activities under the scheme.
The Victorian Energy Efficiency Target Regulations 2008 (the Regulations) set out, amongst other things, the activities for which certificates may be created. Specific details of current prescribed activities can be accessed from the VEET website.
Assessment of new activities
DPI invites interested parties to provide submissions for new activities that could be considered for inclusion in the ESI scheme.
These Guidelines set out the submission assessment criteria. The criteria have been based on the objectives of the Act and Regulations, and practical administrative considerations. Submissions will be reviewed by the ESI Activities Review Panel chaired by the Department of Primary Industries (DPI).
DPI will provide information on the status of submissions on the DPI website. If activities are considered potentially suitable for inclusion, further public consultation will be undertaken before a final determination is made.
Methodologies: deeming or project based, sectoral coverage
Submissions may propose either a “deeming methodology” or a “project based methodology”, as best suits effective implementation. Submissions may cover activities relevant to residential applications, business applications or both.
Deeming uses an algorithm, supported by evidence, to calculate in advance the number of certificates allocated to an ‘average’ installation of an activity, based the characteristics of the equipment or product which is installed. This approach is most applicable to activities that are widely available, involve few variations to installation, and are part of simple systems, such as domestic lighting and hot water. Deeming reduces the amount of administration required to generate certificates. All eligible residential measures included in Phase 1 of ESI (2009 to 2011) were based on a deeming methodology.
Project-based methodologies use alternative approaches to calculate the number of certificates allocated to an activity. There may be the requirement to undertake metering to justify claims, and/or the use of validated modelling or other measurement techniques. This approach is more applicable to unique or complex integrated applications, such as factory production lines or commercial building heating and cooling systems. Generally the proposed savings would be demonstrated at the particular site where they are generated. This increases flexibility to create savings options and will generate an associated greater requirement to provide evidence of the savings achieved. It is anticipated that even with this approach the certificate allocation would be deemed for the lifetime of the project based on the expected annual energy savings, although certificates may not be allocated until the level of energy savings had been verified in some way.
Project-based activities are not currently available under the ESI, however DPI will be undertaking further analysis of this approach in 2012. Whilst the project-based approach is not currently defined, DPI welcomes submissions that utilise a methodology of this type. This will assist in the development of approaches that address specific sectoral needs.
Prior reading
Interested parties are advised to consider the following documents in preparing their submissions:
- Victorian Energy Efficiency Target Act 2007
- Victorian Energy Efficiency Target Regulations 2008
- The ESC’s Victorian Energy Efficiency Target Guidelines
- Relevant publications on the ESC website
- Relevant publications on the DPI website
No representation or warranty
By accepting a submission, DPI makes no representation or warranty that a new activity will be approved for the purposes of the ESI.
Cost of preparing submissions
Parties are responsible for the cost of preparing and lodging a submission and all other costs arising out of the preparation process, including independent testing and the costs of any third persons engaged by the party. DPI may publish the information received without payment to submitting parties.
Publishing of submissions
Parties should be aware that DPI may publish a submission and associated relevant information in either printed or electronic form. DPI understands the need to keep commercial matters confidential in appropriate circumstances. If any elements of a submission or associated information are to be regarded as confidential and not to be published, that information should be clearly identified to DPI. Confidential sections of a submission must be clearly labelled “commercial in confidence”.
Independent testing
In lodging a submission, parties acknowledge DPI’s right to engage consultants and contractors to assist in the assessment process, and to disclose information (that might otherwise be identified as confidential by a party) to such persons for those purposes.
Use of these submission guidelines
Submitting parties should provide the information requested in the format outlined in these guidelines, and enclose additional information where required. Submissions should address:
- Section 2 – Summary Details
- Section 3 – Claims Against Assessment Criteria
- Section 4 – Additional Criteria
Further information
DPI may ask parties who have lodged a submission to provide further information, or to clarify the information provided.
How to lodge a submission
Closing date for the current round of submissions is 9 January 2012.
Submissions should be lodged as follows:
By email -
Energy Saver Incentive- New Activities Submission
energysaverincentive@dpi.vic.gov.au
or in writing-
Energy Saver Incentive- New Activities Submission
Energy Sector Development Division
Department of Primary Industries GPO Box 4440
MELBOURNE VIC 3001
2. Summary details
All applicants should complete the summary table attached in this word document.
| Submission for the Creation of a New Activity Category for the ESI Scheme | ||
|---|---|---|
| Applicant Details: | ||
| Date of submission |
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| Company name (if applicable) |
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| ABN/ACN (if applicable) |
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| Address |
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| Contact person details: | ||
| Name and position |
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| Telephone number |
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| Email address |
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| Summary of proposal: | ||
| Confidentiality statement–MUST BE COMPLETED (clearly identify all confidential components of submission or state that the submission is not confidential) |
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| Category of proposed activity- (provide generic category, not name of manufacturer’s product) Example: Thermally efficient windows, rather than a proprietary product. |
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| Briefly describe activity ( max 100 words) |
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Estimates of the average annual energy savings for an average installation
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| List the key variables that should be considered in this calculation (eg climate zone, product life, product relative efficiency) |
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| List all existing product standards which support the claims for energy savings |
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3. Claims against assessment criteria
3.1 Estimate of average energy & greenhouse savings
Submissions should establish the basis for the claimed energy and greenhouse saving resulting from the proposed activity. An example is included at Appendix A. Provide further detail to support claims made in Part 2 Summary Details, including:
- supporting evidence for the annual and lifetime energy savings for an average installation;
- the key variables that significantly impact on potential energy saving (eg business activity, fuel type, relative product efficiency against similar products, product life, regional location, climate zone, type of business activity, usage of products, or human behaviour);
- details of relevant recognised test standards1 which assess the energy performance of any products or action relevant to this activity. If there is no test standard, provide a proposed standard approach for assessing the energy performance of the activity;
- business as usual (BAU) uptake of the activity and how the savings are additional (eg through a correction factor if required);
- any existing mandatory requirements relevant to the activity;
- the likelihood and quantum of rebound2 that may be generated by the activity.
The submission may provide an estimate of the number of certificates generated by the activity through;
- utilising the greenhouse coefficients provided in Appendix A, part 3;
- providing a supporting calculation; and
- indicating any discount factors to account for uncertainties associated with the size of the energy savings.
Note that if the proposed activity is accepted the final algorithm or assumptions may be different those proposed in a submission.
3.2 Implementation of the proposed new ESI activity
New activities will be supported by practical and effective scheme administration, including mitigation of any health and safety risks. These issues, and industry impacts, cost and installation opportunities will be considered by the panel in the evaluation process.
Provide further support for the claims made in part 2, including:
- how installation of the activity can be verified;
- how a robust compliance regime can be assured, whilst minimising red tape and administrative burden;
- any occupational health and safety (OHS) issues generated by the activity, and appropriate mitigation;
- relevant training, qualifications, licensing or certification relevant to the proposed activity including any mandatory requirements;
- estimate of the cost of implementing the activity (capital and installation costs);
- estimate of the total number of installations possible in Victoria annually; and
- potential for product or service innovation, or industry development, including likely investment or employment creation.
Please provide evidence, data or references to justify all claims made.
4. Additional considerations
Proposals will be assessed against the holistic impact of the activity. As available, provide further support for the claims made in part 2, including:
4.1 Quality standards
Describe existing defined standards that underpin quality assurance and consistency of performance. Where defined standards do not exist, discuss how quality expectations can be addressed.
4.2 Consistency with other schemes
Proposals that can demonstrate consistency with similar schemes in other jurisdictions will be positively considered.
4.3 Benefits and Risks
Please provide details of any other benefits or risks associated with the proposed activity
Appendix A: Example of response for 3.1 Estimate of average energy & greenhouse savings - Low Flow Shower Rose
Details of recognised standards The Australian Standard AS/NZS 3662:2005 Performance of Showers for Bathing specifies performance requirements for shower roses, and AS/NZS 6400:2005 Water Efficient Products – Rating and Labelling specifies requirements for the rating of products for water efficiency, and includes the associated registration, labelling and, where applicable, minimum performance requirements.
This activity is based on the replacement of an existing un-rated (or non-low flow) shower rose with a shower rose which complies with the requirements of AS/NZS 3662:2005 and has a Water Efficiency Rating of at least 3-Stars under the WELS scheme, as measured by AS/NZS 6400:2005.
| Input Data/Assumptions | ||
|---|---|---|
| Av. number of people per household | 2.41 | |
| Av. number of showers per day per person | 0.9 | |
| Av. flow rate of existing unrated shower rose (L/min) | 12 | |
| Av. time for shower - existing shower rose (mins) | 6.7 | |
| Av. flow rate for 3-Star shower rose (L/min) | 8.1 | |
| Average shower time for 3-Star shower rose (Mins) | 6.9 | |
| Cold water temperature – Tc (oC ) | 14.5 | |
| Hot water temperature - Th (oC ) | 60 | |
| Average shower temperature - Ts (oC ) | 40 | |
| Assumed life of the saving (Yrs) | 10 | |
| Discount factor (to take into account BAU uptake) | 80% | |
| Type of water heater | Av. Stock Conversion Efficiency |
Penetration |
|---|---|---|
| Electric | 98% | 28.9% |
| Solar electric or heat pump | 230% | 1.0% |
| Natural gas | 82% | 67.9% |
| LPG/other | 82% | 1.5% |
| Solar gas | 215% | 0.1% |
| Wood | 55% | 0.6% |
| Wood | 55% | 0.6% |
Estimated annual water saving for installing LF shower rose
= 2.41 x 0.9 x 365 x [(12 x 6.7) – (8.1 x 6.9)]
= 19,404 Litres/year at 40oC
% of water saving which is hot water
= (Ts – Tc)/(Th – Tc) x 100%
= (25.5/45.5) x 100%
= 56%
Estimated annual hot water saving for installing LF shower rose
= 19,404 x 56%
= 10,866 Litres/year at 60oC
Base energy saving (MJ/Yr)
= [Litres x (Th – Tc) x 4.186] / 1000
= 10,866 x 45.5 x 4.186 / 1000
= 2,070 MJ/Yr
The annual energy savings for the average Victorian household are calculated by taking into account the average conversion efficiency of each type of water heater, and the penetration of each type of water heater.
| Type of water heater | Conversion Efficiency | Unit Energy Saving (MJ/Yr) | Penetration | Weighted Saving (MJ/Yr) |
|---|---|---|---|---|
| Electric | 98% | 2,112 | 29% | 612.5 |
| Solar electric or heat pump | 230% | 900 | 1% | 9.0 |
| Natural gas | 82% | 2,534 | 68% | 1,716.3 |
| LPG/other | 82% | 2,534 | 2% | 50.7 |
| Solar gas | 215% | 963 | 0.1% | 1.0 |
| Wood | 55% | 3,764 | 1% | 37.6 |
| Total Saving | 2,427.1 |
Estimated lifetime savings
= 2,427.1 x 10
= 24,271 MJ
Estimated lifetime saving taking into account the discount factor
= 24,271 x 80%
= 19,417 MJ
Estimate of the number of VEET certificates
To estimate annual greenhouse savings the weighted annual savings for each type of water heater are multiplied by the greenhouse coefficient for the relevant fuel.
| Type of water heater | Weighted fuel saving (MJ/Yr) | Greenhouse Coefficient (kg/MJ) | Greenhouse Saving (kg/Yr) |
|---|---|---|---|
| Electric | 612.5 | 0.2675 | 163.8 |
| Solar electric or heat pump | 9.0 | 0.2675 | 2.4 |
| Natural gas | 1,716.3 | 0.0573 | 98.3 |
| LPG/other | 50.7 | 0.065 | 3.3 |
| Solar gas | 1.0 | 0.0573 | 0.06 |
| Wood | 37.6 | 0.014 | 0.5 |
| 268.4 |
Estimated lifetime greenhouse abatement
= 268.4 x 10
= 2,684 kg = 2.684 Tonnes
Estimated lifetime greenhouse abatement, taking into account the discount factor
= 2.684 x 80%
= 2.15
1These could be Australian Standards, recognised or widely used international standards, or standards and tests used as the basis of certification schemes in Australia or other countries.
2Rebound is any increased use of energy that may be a direct consequence of implementing the activity.
