Changes to the NSW Electricity Supply Act – the Reconstituted Energy Savings Scheme

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By Robert De Boer, Partner 

On 12 May 2020 the NSW Attorney General introduced 3 bills into NSW Parliament to address the impacts of the COVID-19 pandemic. One of the bills, the COVID-19 Legislation Amendment (Emergency Measures – Miscellaneous) Bill 2020 (NSW) (Bill), seeks to amend a number of NSW Acts and Regulations, including the Electricity Supply Act 1995 (NSW) (ES Act). The Bill was passed by both houses of the NSW Parliament on 13 May 2020 (with no amendments to the provisions in the Bill dealing with the ES Act), and the COVID-19 Legislation Amendment (Emergency Measures – Miscellaneous) Act 2020 (NSW) is now awaiting assent to commence.

The amendments to the ES Act (when proclaimed to commence) seek to constitute the “energy security safeguard” whose object is to improve the affordability, reliability and sustainability of energy through the creation of financial incentives that encourage the consumption, contracting or supply of energy in particular ways.

The energy security safeguard will initially operate under the auspices of the energy savings scheme that currently operates under the ES Act (by inserting a new Schedule 4A to the Act, and transferring Part 9 (sections 98-178) of the ES Act to the new Part  1 of Schedule 4A), and any other schemes that may be created, by regulation, to encourage a specified energy activity. The amendments to the ES Act also postpone the date of automatic termination of the energy savings scheme from the end of 2025 to the end of 2050.

As outlined in the Second Reading Speech for the Bill, the NSW Attorney General noted that one of the first schemes intended to be established is a peak demand reduction scheme that supports the rollout of smart appliances, storage and equipment that helps households and businesses use or store energy at times when it is cheap. The Government will also investigate other such schemes that are consistent with the object of the safeguard, especially those that support the COVID‑19 economic recovery.

The amendments to the ES Act will be of particular interest to energy savings scheme participants (typically electricity retailers who operate in NSW) who are required to participate in the energy savings scheme and must meet an individual energy savings target each year.

For further information, please do not hesitate to contact us.

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