The Energy Efficiency Council and Energy Savings Industry Association have welcomed the NSW Government’s new electricity strategy, which ramps up action on energy efficiency and supports the rollout of ‘smart’ devices and equipment that can take load off the system when demand is high.

The new NSW Electricity Strategy flags a major revamp of the state’s Energy Savings Scheme, which will be extended to 2050 and rebadged the Energy Security Safeguard.

Energy Efficiency Council CEO Luke Menzel said NSW Energy Minister Matt Kean has moved the state into a leadership position on smart energy management.

“The new Energy Security Safeguard will do two crucial things,” Menzel said. “Firstly, it will raise the ambition of NSW’s energy efficiency target, which will drive energy and cost savings for NSW households and businesses.

“Secondly, it will establish a companion effort on demand management, which will support the rollout of smart devices and equipment that can automatically take load of the system when demand is high.”

The strategy also includes a range of measures to encourage investment in firmed, large-scale renewable generation.

The NSW Energy Savings Scheme (ESS) will be expanded and extended to 2050 with a more ambitious target increasing gradually up to 13% by 2030, from 8.5% by 2025 currently.

Customers will save $40 a year on bills.

The ESS will be rebadged to become part of the Energy Security Safeguard, which will incorporate a new demand reduction scheme to support technologies like batteries that can reduce demand from peak periods.

Energy Savings Industry Association president Rob Woolley called the policy “a sensible leveraging of the highly successful ESS that addresses the critical issue of peak demand impacts on energy reliability, affordability and security”.

The NSW ESS is delivering an average annual reduction of total electricity consumption of at least 4%. The additional demand reduction initiatives will reduce pressure on summer peak demand times from 6-9pm when the system is under most stress and risk.

The NSW government’s safeguard commitment will help fill the gap caused by the retirement of ageing coal generators. It will also help to meet the state’s target of net zero emissions by 2050, help drive down wholesale power prices to reduce all energy customers’ bills as well as deliver further direct savings for those households and businesses that undertake upgrades under the ESS.

South Australia and the ACT have peak demand reduction on their review agendas as they consider their post-2020 energy savings schemes’ expansion, the ESIA said. Victoria is yet to show clear intention on peak demand reduction, with a consultation imminent.

“Energy savings scheme end dates now run at 2050 for NSW, 2030 for Victoria and ACT, and SA considering 2025. That leaves Queensland with one foot in the COAG Energy Council (EC) leadership huddle, with that state committing to launching an energy savings scheme before the next election on October 31, 2020, but no word yet as peak demand there continues to rise. We encourage the state COAG EC members to all get into the huddle on this challenge,” Woolley said.