New Environmental Scheme for NSW Energy Retailers - Starts Nov 1
Are you ready for summer? If you’re an energy retailer, then there is a new environmental scheme starting that may impact you.
The NSW Government is implementing the Peak Demand Reduction Scheme (PDRS) as part of its Energy Security Safeguard strategy.
1 November 2022 (next Tuesday) marks the start of the first compliance period for this new tradeable certificate scheme. The scheme’s objective is to provide a financial incentive to reduce network demand during peak periods in summer. Retailers, as scheme participants, will need to buy and surrender Peak Reduction Certificates to meet their share of peak demand reduction each year.
As this is the first year this Scheme is live, some of the nitty-gritty detail of how it works in practice is still under development. We will continue to provide updates as more information becomes available.
What we do know is that IPART is required to publish the overall scheme target by the 1st November and the scheme liable demand by 15th November.
We also know that retailers will calculate liable acquisitions with this formula:
To calculate individual liable demand, retailers will use the below formula:
Retailers will need to calculate their individual certificate target using the below formula.
From next year, retailers must meet the following timeline:
The implications for retailers are broad and cover multiple business areas including those managing customer quoting, pricing and billing processes and wholesale market trading and risk management.
We are working with our clients on the impacts for them to ensure they are fully prepared. Please get in touch if we can help support your business through these changes as well.