This glossary provides a general guide to the terminology used in ESS.

This glossary is designed to be read in conjunction with the Act, Regulation and ESS Rule. It is a general guide only and should not be relied upon as a substitute for legal advice. Please refer to the Act, Regulation and ESS Rule for the full definition of these terms.





Accredited Certificate

A person accredited by the Scheme Administrator to create Energy Savings Certificates (ESCs) in respect of a Recognised Energy Saving Activity.


The Electricity Supply Act 1995 which established the Energy Savings Scheme (in particular Part 9 of the Act).

Approved Corresponding Scheme

A scheme in another jurisdiction that the Minister has approved as a corresponding scheme.

Base Penalty Rate

Is listed in Schedule 5A of the Act, and is $24.50 for 2010.


The base penalty rate is defined in section 113 of the Act and calculated according to clause 30 of the Regulation.

Certificate Conversion Factor

The Certificate Conversion Factor is specified in section 130 of the Act as 1.06 for electricity and 0.39 for gas. It is used to convert energy savings to energy savings certificates.

Confidence Factor

A factor applied when calculating the number of Energy Savings Certificates using either the Project Impact Assessment Method or the Metered Baseline Methods. The Confidence Factor is specified in each of these methods.

Consumer Price Index (CPI)

The Consumer Price Index (All Groups Index) for Sydney.

Under the Energy Savings Scheme, the Base Penalty Rate and the ESC registration fee (from 2017) are adjusted by the CPI prior to the commencement of each calendar year.

End-user equipment

End‐user equipment refers to the energy consuming equipment, processes or systems. It is equipment directly consuming energy and any other equipment which controls or influences the consumption of energy.

Energy Saver

The person who has the right to create energy savings certificates for the energy savings resulting from an implementation of a Recognised Energy Saving Activity at a site.

Energy Savings

Energy Savings refers to the reduction in energy consumption arising from a Recognised Energy Saving Activity and calculated according to the ESS Rule.

Energy Savings Certificate (ESC)

A transferable certificate created under Part 9 of the Act. A certificate represents one notional megawatt hour (MWh) of saved energy.

Energy Savings Scheme Rule (ESS Rule)

The Energy Savings Scheme Rule of 2009 (ESS Rule) is published by the Minister for Industry, Resources and Energy. The ESS Rule sets out the definition of Energy Saver and Recognised Energy Saving Activity, the requirements for accreditation as an Accredited Certificate Provider, the conditions on the creation of Energy Savings Certificates and the methodologies that may be used to calculate energy savings. The ESS Rule is amended from time to time.

Energy Savings Target

The Energy Savings Target is the figure specified in Schedule 5 of the Act that is used by Scheme Participants to calculate their Individual Energy Savings Target for each calendar year.

Energy Savings Shortfall

A Scheme Participant is liable to pay a penalty for an Energy Savings Shortfall which is calculated if a Scheme Participant fails to surrender enough Energy Savings Certificates to meet its Individual Energy Savings Target for a year. 

Exempt Electricity Load

An Exempt Electricity Load is the load attributed to a specified activity at a location which has been granted full or partial exemption  from the scheme by the Minister, as specified in the Ministerial Order.

Implementation Date

The Implementation Date is defined in each calculation method of the ESS Rule.

Individual Energy Savings Target

An Individual Energy Savings Target is calculated by each Scheme Participant each year by multiplying their total liable acquisitions for that year by the Energy Savings Scheme Target for the year and the energy conversion factor. The Individual Energy Savings Target is calculated in notional megawatt hours (MWh) and can be met by either surrendering energy savings certificates or paying a penalty.

Liable Acquisition

Liable Acquisition is defined in section 107 of the Act as any purchase of electricity by a scheme participant, from the Market Operator or from any other person, whether or not a registered participant under the National Electricity (NSW) Law, where the electricity is purchased for consumption by, or onsale to, end users in this State, or for use in this State.

Market Operator

The Market Operator is responsible for the administration and operation of the wholesale national electricity market in accordance with the National Electricity Law. The Market Operator is currently the Australian Energy Market Operator AEMO.

Ministerial Order

The Ministerial Order is published annually, or when required, and lists the emissions intensive trade exposed activity and the relevant site granted an exemption from the ESS by the Minister.


National Australian Built Environment Rating System (NABERS)

NABERS is a ratings methodology administered by the NABERS Administrator (currently the Office of Environment and Heritage (OEH)) which can be used to calculate Energy Savings under the Metered Baseline Method. The NABERS Method can be used for new or existing buildings.

Penalty Conversion Factor

The Penalty Conversion Factor is specified as 0.94 in section 113 of the Act.

Recognised Energy Savings Activity

Eligible activities in the Energy Savings Scheme as defined in clause 5.3 of the ESS Rule.


Electricity Supply (General) Regulation 2014.

Scheme Administrator

The Independent Pricing and Regulatory Tribunal (IPART) is the Scheme Administrator of the Energy Savings Scheme. Information about IPART’s role as Scheme Administrator is available here.

Scheme Participant

Scheme Participants are defined in section 101 of the Act and include retailers, direct suppliers of electricity and market customers.

Scheme Penalty Rate

The Scheme Penalty Rate is defined in section 113 of the Act and calculated by multiplying the Base Penalty Rate by the Penalty Conversion Factor.  The Scheme Penalty Rate is the amount payable for an Energy Savings Shortfall (calculated per notional megawatt hour).

Scheme Registry                        

An online registry of Accredited Certificate Providers and Energy Savings Certificates.

Scheme Regulator

The Independent Pricing and Regulatory Tribunal (IPART) is the Scheme Regulator of the Energy Savings Scheme. Information about IPART’s role as Scheme Administrator is available here.


A Site is defined in clause 10 of the ESS Rule as the location of the End-User Equipment affected by a Recognised Energy Saving Activity, as defined by an address, a unique identifier, or determined by a method accepted by the Scheme Administrator.