Project-Based Assessments in the Victorian Energy Efficient Target (VEET) Scheme

Project-Based Assessments in the Victorian Energy Efficient Target (VEET) Scheme

Project-based assessments in the Victorian Energy Efficient Target (VEET) scheme

Energy Policy and Programs

Department of Economic Development, Jobs, Transport and Resources

Level 10, 121 Exhibition Street

Melbourne VIC 3000

23 November 2015

To Whom It May Concern,

On behalf of the Northern Alliance for Greenhouse Action (NAGA), I am writing to thank you for the opportunity to provide input into this review of the Victorian Energy Efficiency Target (VEET) scheme and to provide greater depth of information to support our online submission.

The Northern Alliance for Greenhouse Action (NAGA) operates across northern metropolitan region of Melbourne. NAGA’s council members include Banyule City Council, Darebin City Council, Hume City Council, Manningham City Council, City of Melbourne, Moreland City Council, Moreland Energy Foundations Limited, Nillumbik Shire Council, City of Whittlesea and the City of Yarra. NAGA formed in 2002 to share information, coordinate emission reduction activities and cooperate on research and the development of innovative projects. NAGA's goal is to achieve significant emissions abatement and energy cost savings by delivering effective programs and leveraging local government, community and business action.

NAGA and its members prioritise the implementation of energy efficiency to deliver improved savings both financially and in the efficient use of our energy resources. NAGA members have worked with suppliers to promote and extend uptake of the scheme to residents and businesses in their communities. This has included the provision of bulk buy schemes and programs to bundle products and to target specific residential sub-sectors including low-income, high usage, culturally and linguistically diverse and high-rise households.Our projects have engaged participation from commercial operations and businesses from across the spectrum of income brackets, energy using profiles and size.

NAGA welcomes the strengthening of the target and extended commitment to achieving that target through the Victorian Government’s commitment to VEET until 2020. We recognise that much of the heavy lifting required to achieve this target will need to take place in the commercial building market and are keen to support new and innovative techniques, such as project-based assessments and subsequent activities. Our concerns about the operation of the project-based component of the scheme are limited and set out purely in the context of wanting to see the scheme succeed.

  • Simplicity of verification for small business - feedback from NAGA members has focused on concerns regarding verification associated with project-based assessments, in particular ensuring that the chosen verification method is simple enough to use in engagement with small businesses, which may be deterred by what they may perceive as an overly complex methodology, though robust enough to capture the necessary energy savings. It is for this reason, that NAGA would support the use of the Measurement and Verification Method for larger project-based assessments, and a simpler and more flexible version of the same, with less onerous requirements, for smaller projects.

Ensuring consistency between the two assessment methodologies will make it easier for Economic Development officers at councils to be able to promote project-based assessments to a range of businesses, for Accredited Persons to deliver these assessments and, most importantly, for customers who may have a range of business premises and operations to understand the methodology.

  • Length of certificates - NAGA also expresses some concern regarding areas of uncertainty with the new scheme, in particular that the VEET certificates will be based on forward looking projections for ten years, while the life of the scheme is five years. In this respect, NAGA would support the creation of certificates with sunset clauses guaranteeing validity for the ten year period with the objective being to provide fair acknowledgement of forward-created certificates, and top-ups, in the event that the VEET scheme ceases to exist. In addition, members are concerned that the long projection required for the certificates may be difficult to manage if circumstances change, such as if the original Accredited Person goes out of business.
  • Alignment with Environmental Upgrade Agreements (EUAs) – the passing of the Local Government Legislation Amendment (Environmental Upgrade Agreements) Act 2015, which has allowed the expansion of the ability of EUAs to be offered to all Victorian councils, creates an opportunity for greater energy efficiency improvements within the commercial sector. This can be further supported through an effective VEET scheme that aligns its processes with potential EUAs. Both processes have similar project lifecycles and timelines and care should be taken to ensure that they complement one another in their delivery.

These are pragmatic recommendations, assisting State Government deliver relevant and best-possible emissions reductions outcomes, and are based on NAGA’s close working relationship with councils, businesses and industry. NAGA and its members would be pleased to provide additional information, based on our direct experience of working with large and small energy users over more than 10 years.

Please contact me (phone: 9385 8505 or email ) if you would like further information, case studies or any clarification regarding the issues raised in this letter.

Yours sincerely

Paul Murfitt,

Chair, NAGA