5. Regulation

5.1 Greenhouse Gas Abatement Scheme

The NSW Greenhouse Gas Abatement Scheme (GGAS) commenced on 1 January 2003. It is one of the first mandatory greenhouse gas emissions trading schemes in the world. GGAS aims to reduce greenhouse gas emissions associated with the production and use of electricity. It achieves this by using project-based activities to offset the production of greenhouse gas emissions.

GGAS establishes annual statewide greenhouse gas reduction targets, and then requires individual electricity retailers and certain other parties who buy or sell electricity in NSW to meet mandatory benchmarks based on the size of their share of the electricity market. If these parties, known as benchmark participants, fail to meet their benchmarks, then a penalty is assigned. Monitoring the performance of benchmark participants is undertaken by the Independent Pricing and Regulatory Tribunal of NSW (IPART) in its role as Compliance Regulator.

Assessing abatement projects, accrediting parties to undertake eligible projects and then create certificates, and monitoring compliance with GGAS is the responsibility of the Scheme Administrator, currently IPART. The Scheme Administrator also manages the Greenhouse Registry which records the registration and transfer of certificates created from abatement projects.

5.2 Energy Savings Scheme

The Energy Savings Scheme is a NSW-based mandatory energy efficiency scheme for electricity retailers and other liable parties under the Scheme.

The objectives of the Scheme are:

• to assist households and businesses to reduce electricity consumption and electricity costs;
• to complement any national scheme for carbon pollution reduction by making the reduction of greenhouse gas emissions achievable at a lower cost; and
• to reduce the cost of, and the need for, additional energy generation, transmission and distribution infrastructure.

The Energy Savings Scheme is governed by NSW legislation and places a mandatory obligation on scheme participants (electricity retailers and other parties licensed to buy or directly supply electricity in NSW) to obtain and surrender Energy Savings Certificates, which represent eligible energy savings.

Scheme participants purchase Energy Savings Certificates from accredited certificate providers, who create certificates following the implementation of energy savings activities. Companies that are Scheme participants may also apply to become accredited certificate providers.

The Energy Savings Scheme establishes legislated annual energy savings targets that must be met through the creation and surrender of Energy Savings Certificates. The target will increase gradually from 0.4% in the first year to 4% in 2014.

Commercial buildings have a simple method to create certificates. Building owners can register projects to improve the energy efficiency of their building, and measure the actual improvements through NABERS Energy ratings. The number of certificates that the building is eligible to create is automatically calculated during the NABERS Energy assessment process.

In the first four years of the Scheme an estimated 8.5 million megawatt-hours of electricity will be saved. This is equivalent to around 8.5 million tonnes of carbon dioxide. The Scheme will operate until 2020 unless replaced by a national energy efficiency trading scheme.

The NSW Government is consulting on proposed changes to the Energy Savings Scheme (ESS) Rule, to broaden the scope of energy saving activities and projects conducted under the Scheme, as well as to maintain the integrity of the Scheme. The proposed ESS Rule amendments will expand eligible projects under the Scheme, providing new incentives for hotels, motels and electricity networks to participate in energy saving activities. In addition, showerhead replacement activities will be removed from the Scheme effective from 22 December 2011.

Details of the proposed changes can be found at:

• Energy Savings Scheme Rule Change - Consultation Paper (95kb, PDF)
• Energy Savings Scheme Rule Change - Draft Rule (791kb, PDF)

5.3 NSW Water and Energy Savings Action Plans

High energy and water users in NSW are required by legislation to prepare Water and Energy Savings Actions Plans which provide a comprehensive analysis of an organisation's energy or water use and management strategies. To prepare a plan, energy and water users must determine current energy and water use, undertake a management review, undertake a detailed technical review, and assess and identify savings measures. Sites with approved plans must submit an annual report on progress.

Energy Savings Action Plans have been prepared by 206 business sites that use more than 10 gigawatt-hours of electricity a year. Of the cost-effective annual savings of 729,000 tonnes of greenhouse gas emissions identified in these Plans, 35% had been implemented by June 2010, with estimated savings of $35.5 million of electricity and gas bills a year. Water Savings Action Plans have been prepared by 220 business sites in the Sydney Water area that use more than 50 million litres of water a year. 6.5 billion litres of cost-effective water savings have been identified in these plans, of which 44% have been implemented saving an estimated $7.8 million in water bills a year.

5.4 State Environmental Planning Policy No. 65

State Environmental Planning Policy (SEPP) No. 65 aims to improve design quality of residential flat buildings of three or more storeys, and containing four or more self-contained dwellings.

This Policy applies to:

• the erection of a new residential flat building, and
• the substantial redevelopment or the substantial refurbishment of an existing residential flat building, and
• the conversion of an existing building to a residential flat building

The Policy recognises that the design quality of residential flat development is of significance for environmental planning for the State due to the economic, environmental, cultural and social benefits of high quality design. SEPP 65 aims to:

• ensure that it contributes to the sustainable development of NSW,
• minimise the consumption of energy from non-renewable resources, to conserve the environment and to reduce greenhouse gas emissions,
• achieve better built form and aesthetics of buildings and of the streetscapes and public spaces they define,
• better satisfy the increasing demand, changing social and demographic profile of the community and the needs of the widest range of people from childhood to old age, including those with disabilities, and
• maximise amenity, safety and security for the benefit of occupants and the wider community

5.5 Sydney Metropolitan Development Authority

The Sydney Metropolitan Development Authority (SMDA) came into effect in September 2010 and will be a key agency in delivering government objectives for integrating land use and transport infrastructure investment in the Sydney metropolitan area. The SMDA will strengthen urban renewal outcomes by focusing on housing supply and employment capacity targets in selected areas with appropriate transport capacity that are consistent with the Metropolitan Plan.

The Department of Planning and Transport NSW will work together to identify precinct areas where SMDA will operate, while the SMDA will act as a coordinating and delivery agency to ensure timely implementation and delivery or urban renewal initiatives. Urban renewal will be achieved by:

• undertaking land use planning investigations and feasibility analyses
• applying the implementation powers of a development corporation, including the capacity to amalgamate sites for a strategic purpose
• coordinating precinct land use planning and infrastructure delivery (particularly transport)
• engaging with other agencies (including Landcom) and the private sector to ensure efficient and timely delivery of property development.

The SMDA will use existing provisions of the Growth Centres (Development Corporations) Act. As a priority, it will focus on areas currently administered by the Redfern Waterloo Authority - including North Eveleigh and the Australian Technology Park - as well as Granville in Sydney's west.

5.6 BASIX

The Building Sustainability Index (BASIX) is the online assessment tool used by development applicants to make sure new homes and multi-unit developments meet the NSW Government's targets for reducing energy and water use in new residential dwellings. BASIX certification must be achieved before development can be approved by the local certifying authority for all new homes, major renovations worth $50,000 or more, and new pools of 40Kl or more.

The user (usually the building designer) enters data relating to the house or unit design - such as location, size, building materials etc - into the BASIX tool. BASIX analyses this data and determines how it scores against the Government's energy and water targets. The design must pass specific targets (which vary according to location and building type) before the user can get the BASIX Certificate.

BASIX was developed by the NSW Department of Planning in association with other government agencies, local government and utilities.

From October 2006, BASIX also applied to major alterations and additions to existing homes.