The ESS currently provides around $26 million to $57 million each year in subsidies to energy efficiency projects. The scheme covers electricity use in the commercial, industrial and residential sectors, and legislated until 2020. The key points from the NSW Government’s announcement are commitments to:
- expand the ESS to also cover gas efficiency
- extend the scheme until 2025
- increase the targets from five per cent of electricity sales to eight per cent by 2018
The NSW Government has weighed the costs and benefits of these proposals, and concluded that its preferred target will deliver an overall public benefit with a net present value of $292 million.
These benefits are compelling. However, a closer examination of the ESS modelling suggests that it is conservative, and that there may be a case for considerably higher targets.