1. What should the new VEET target be?
No response
Other (please specify a target and
length): [Required if 'Other' selected] *
1a. Please outline why you prefer the
target you identified, or why you selected
"No response":
With the introduction of the scheme to
SMEs/businesses in 2012, take-up has not
occurred (among this sector) as modelling
predicted and therefore investigation is
required to understand the barriers that have
prevented uptake of the scheme (rather than
energy efficiency itself) in order to inform
future targets. VECCI acknowledges that the
approach and assumptions used to model
possible targets were based on the best
available information and evidence at the
time. VECCI recommends that SME activities
be closely monitored to ensure they are
suitable, practical, and meet the needs of SME
participants and the scheme. VECCI notes
that if some SME measures are not rolled out,
the modelling may be affected. VECCI
suggests the Department monitor this to
ensure it does not cause adverse effects
contrary to the modelling. The focus of the
VEET scheme so far has been on simple
residential power savings, where the value of
certificates generated has exceeded the selling
and implementation costs and as a result are
offered for free or at very low cost to
residential households. This has facilitated a
large uptake from the residential sector
compared to the business sector, where these
opportunities are either not applicable or have
a minor impact on reducing the energy costs
for businesses. As a result businesses are not
fully utilising the scheme’s intended benefits.
A target(s), in addition to related scheme
accountability and support, must cater for
these current shortfalls to ensure business
uptake is monitored and supported.
2. Comments are invited on the modelling
approach used to determine the costs and
benefits of the VEET scheme. Is there
any additional data or information that
should be considered?
The residential modelling calculates the
VEET financial incentive passed on to
consumers on the basis that 10% is held by
the Accredited Person, in addition to $1 paid
to the ESC. The business modelling assumes
only a 5% administrative cost based on the
assessment of the ACT Government’s Energy
Efficiency Improvement Scheme (EEIS).
Additional administration costs required to
service the business sector for eg greater
effort required in sales, product approvals and
product costs should be conservatively
considered as part of the modelling. VECCI
advises that this is monitored over time to
ensure these overheads are not inhibitors to
APs participating in the scheme. Lastly, the
current modelling does not take into account
the projected gas price rises due to Liquefied
Natural Gas (LNG) exports from the Eastern
Australian Gas Market. The model is based on
natural gas retail prices decreasing from
$11.17/GJ in 2016 to $9.62 in 2024 for
Franchise (SME) customers and from
$10.77/GJ in 2016 to $9.22 in 2024 for
Contract (large customers).The wholesale gas
price is forecasted to peak at $9/GJ in 2016
and later stabilise at $7.5 - $8/GJ from 2019
onwards (retail or delivered prices to
businesses and consumers will be higher than
these wholesale prices). This can drive greater
investment in gas efficiency measures and is
worth modelling as a potential scenario.
3. Which greenhouse gas coefficient
should be used to quantify the reduction
in greenhouse gas emissions achieved by
the VEET scheme?
Existing marginal coefficient
3a. Please outline why you believe this
option is preferred, or why you selected
"No response":
The existing coefficients were developed in
2007 and used since the inception of the
scheme. Maintaining the existing coefficients
will ensure consistency and avoid some of the
considerations highlighted in page 10 of the
consultation document around adopting an
average coefficient (as published in the
National Greenhouse Accounts) which is
likely to less precisely represent the actual
greenhouse gas savings delivered by VEET
from electricity which would increase the
number of certificates generated by those
measures which are dominated by electricity
savings relative to those dominated by gas
savings (e.g. heating, water heating, building
shell upgrades).
4. The Department has valued
greenhouse gas emissions reductions
attributed to the VEET scheme by
This approach is considered appropriate as
there is currently no official method for
valuing emissions reductions in Australia or
adopting a carbon valuation series that
was produced by the Federal Climate
Change Authority as part of its 2014
Targets and Progress Review.Please
outline whether you think this approach
is appropriate for valuing greenhouse gas
emissions reductions over the period 2016
to 2050?
Victoria, and the carbon value developed by
the Climate Change Authority is considered
the most appropriate estimate.
5. Is there a case to exclude any business
sector(s) from participation in the VEET
scheme?
No response
5a. Please outline why this is your
preferred option, and comment on how
this should be implemented:
5b. Please outline why this is your
preferred option:
VECCI's primary feedback is regarding the
need for increased uptake among those
included in the scheme to ensure benefits are
realised. Where businesses are not able to
access or benefit from the scheme, further
consideration should be given for excluding
them.
6. Should the VEET scheme be amended
to better ensure support for low income
households?
No response
6a. Please outline how the VEET scheme
could better support low income
households, and comment on why this
option should be preferred:
6b. Please outline why this is your
preferred option:
As a representative of SME businesses in
Victoria, VECCI does not wish to comment
on household participation in the VEET
scheme.
7. In addition to expanding the range of
energy efficiency activities available in
VEET, should any other action be taken
to target participation by certain groups?
Yes
7a. Please outline the actions you believe
should be taken:
Actions required to target and increase
participation of businesses as per response in
1a above.
7b. Please outline why no other action
should be taken, or why you selected "No
response":
8. Please suggest up to five activities that
should be prioritised for revision or
introduction to the VEET scheme. Please
outline why you believe these activities
should be prioritised.
1. In light of the projected gas price rises,
activities that result in gas savings should be
prioritised. Table 12 in Appendix B of the
consultation document should factor in the
projected price rises in calculating the number
of certificates generated by measures such as
Boilers, Furnaces & Ovens Upgrades, Boilers,
furnaces and ovens Replacement, and
Upgrade of Furnaces/Kilns, considering that
32% of gas consumption in Australia is
attributed to the manufacturing sector utilising
these types of gas equipment and uptake for
these measures will be driven by the projected
price rises. 2. VECCI supports the use of
project-based methodologies to determine and
generate Victorian Energy Efficiency
Certificates for project types that provide
confidence in certificate generation
determinations as well as administrative
simplicity.
9. Please suggest up to three changes
which should be made to improve the
VEET scheme. Please outline why you
believe these changes should be a
priority.
There must be greater government support to
improve awareness and understanding of the
scheme among potential APs, related service
providers, intermediaries and business energy
consumers; communication simplifications
are required to maximise access. To date, a
relatively small number of APs have been
relied upon to promote the scheme to
business, which presents difficulties when
infiltrating the diverse business sector. The
reasons for these difficulties could be further
understood but in our experience includes a
lack of awareness and understanding of the
scheme among the trades and facility
managers that service business (particularly in
the regions), the small proportion of overall
costs that the incentive offsets, the split
incentive and a greater emphasis on upfront
costs rather than whole-of-life. Additionally,
as an intermediary it has been difficult to
create scheme awareness among business
consumers due to a lack of business focussed
information to assist with promotions.
Information is often confusing and lacks a
practical focus. Business typically see a
VEET charge on their energy bills and may be
familiar with that term, yet the scheme is
referred to as the Energy Saver Incentive and
online materials used to support discussions
with businesses swap between the two.
Promotion of the scheme relies on APs
therefore driving up their administrative costs.
Information, including ESC update sessions,
has historically targeted APs focusing on
compliance rather than information that will
assist intermediaries to further understand and
promote the scheme.