Page 3670 - Week 10 - Thursday, 19 September 2019
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This act that we are talking about today provides for a market-based scheme that places an obligation on electricity retailers in the ACT to achieve energy savings. The objects of the act are to encourage the efficient use of energy, reduce greenhouse gas emissions associated with energy use in the territory, reduce energy use and costs and in particular assist low income households suffering from utility cost stress. The scheme works by establishing a territory-wide energy savings target and obliging individual electricity suppliers to deliver savings to achieve the target.
Large tier 1 retailers are required to achieve energy savings by undertaking eligible activities in Canberra households and businesses. ActewAGL is currently the only tier 1 retailer and to date has delivered nearly all the EEIS energy and abatement savings. Smaller tier 2 retailers can opt to pay an energy savings contribution in lieu of delivering activities. The act requires that these contributions be used to support activities consistent with the objects of the act. About 15 tier 2 retailers currently operate in the ACT, and their energy savings contributions have funded activities such as scheme administration, relevant Actsmart programs and the solar flow income initiative.
The scheme has proven to be highly effective in reducing Canberra’s emissions. Over 1.3 million energy saving items have been installed under the scheme, to achieve more than 6.5 million gigajoules of lifetime energy savings and 500,000 tonnes CO2 equivalent of greenhouse gas emissions. This is equivalent to taking approximately 165,000 cars off Canberra roads for a year, to give you a sense of the scale of impact that the scheme has had.
An important point to discuss today—and I think it is particularly relevant in light of the comments from Mr Coe—is that the scheme supports households and small to medium businesses to reduce bills. To date, the scheme has delivered about $400 million in lifetime energy bill savings to around 74,000 households and businesses. Importantly, close to 19,000 priority low income households have received EEIS savings. Savings have also been delivered in about 16,000 rental properties—16,000 renters who really suffer from that classic split incentive problem have benefited from this scheme—and through this scheme we have managed to overcome that issue that has plagued rental properties in this city and other places for decades.
I comment in particular on the scheme’s contribution to a just transition to net zero emissions. The benefits that the scheme delivers to low income households are largely achieved through its priority household target. This target ensures that a proportion of scheme savings is delivered in low income and vulnerable households which pay a high proportion of their income on energy and are least able to make improvements and invest in efficient items without assistance. The priority household target is expressed as a percentage of the tier 1 retailer’s energy savings obligation.
I review the scheme’s delivery each year, aiming to set the priority household target at an optimal level that provides significant assistance to low income households while maintaining the scheme’s economic efficiency. From 2015 until this year the previous climate change minister and I set the priority household target at 20 per cent, but
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