What's new?

Extension to the VEU Relevant Entity 2020 liability surrender date

The Essential Services Commission (ESC) has invited retailers to request a 3-month extension to the due date for their 2020 certificate liability. The Department of Environment, Land, Water and Planning (DELWP) encourages accredited providers and retailers to discuss what implications this extension might have on existing financial or commercial agreements.

VEU - New activities on track for introduction from mid-2021

Following the VEU New Activities Consultation, DELWP is on track to introduce the first of its four new activities for the VEU program from mid-2021. The New Activities Response to Consultation outlines the process to date and next steps.

A total of 25 stakeholder submissions were received through the consultation, which provided valuable feedback on the proposed new activities. Thanks to all those who provided input into the consultation process.

DELWP has considered this feedback and has made several decisions on the approach to developing these new activities.

For more information on the consultation and to download the New Activities Response to Consultation, please visit Engage Victoria: https://engage.vic.gov.au/victorian-energy-upgrades-new-activities-consultation.

The Department of Environment, Land, Water and Planning has published the Victorian Energy Upgrades Specifications - Version 7.0.

The Specifications V7.0 give effect to the changes to lighting activities which occur in 2021. The Specifications also remove  
Part 19 – Destruction of pre-1996 refrigerator or freezer which expired on 10 December 2020.

The Specifications contain the following lighting activity changes:

  • 31 March 2021 - Part 34 Building based lighting upgrades.
    • A discount factor of 0.6 (currently 0.7) applied to High Intensity Discharge (HID) upgrades (including mercury vapour).
    • Part 34 J6 Building based lighting upgrades will be aligned with the illumination power density requirements within the National Construction Code 2019.
  • 30 June 2021 – Part 21 Incandescent lighting.
    • The incentive will be reduced by 35 per cent for all scenarios.
    • A consistent power factor multiplier will be applied across all activities.
    • The removal of lower efficacy and lifetime categories.

For more information on these changes to lighting activities in the Victorian Energy Upgrades program, please visit: https://engage.vic.gov.au/victorian-energy-upgrades/lighting

You can view and download these Specifications V7.0 from the following website:
https://www.energy.vic.gov.au/energy-efficiency/victorian-energy-upgrades/specifications

DELWP has published the Victorian Energy Upgrades – Response to Targets Consultation 2020.

A total of 82 stakeholder submissions were received through the consultation, which provided feedback on the proposed targets and other changes to the program. Thanks to all those who provided input into the consultation process.

In addition to the consideration of stakeholder feedback through the public consultation period, some changes have been made to the initial proposal, particularly in light of the impact of coronavirus (COVID-19).

For more information on the consultation and to download the Response to Targets Consultation 2020, please visit Engage Victoria: https://engage.vic.gov.au/victorian-energy-upgrades/targets.

VEU new activities consultation

DELWP seeks to expand the range of activities available to households and businesses through the Victorian Energy Upgrades (VEU) program. These activities will increase the pool of opportunity for energy efficient upgrades and help achieve the 2021-2025 VEU program targets.

DELWP has just opened a public consultation on new activities, seeking stakeholder feedback on issues papers which set out options to introduce new activities into the VEU program, and draft regulations and specifications which govern how an activity can be carried out.

Your feedback is invited on 4 potential new VEU activities:

  • upgrades to the refrigeration equipment of cold rooms
  • installation of Energy Management Information Systems (EMIS) in commercial buildings
  • upgrades to install lagging (insulation) on pipework heated by gas appliances
  • installation of smart thermostats for residential heating and cooling systems.

Stakeholders can submit feedback through the Engage Victoria website, at https://engage.vic.gov.au/victorian-energy-upgrades-new-activities-consultation.

Feedback from submissions will be used to guide the creation and implementation of the new VEU activities.

This consultation closed on 5 February 2021.

Changes to Measurement & Verification (M&V) method

Since 2017, the M&V method has allowed businesses installing large or bespoke projects to receive incentives under the VEU program. This is done by using smart meter data to measure energy use before and after the energy efficiency project occurs. The M&V method supports the installation of on-site renewable energy which reduces the amount of energy a business draws from the grid, but until now has prevented sites that wish to export renewable energy from generating incentives.

Allowing export of renewable energy outside of the project measurement boundary is an issue regularly raised by stakeholders. Stakeholders have expressed that this rule excluded projects from using the method and damages the business case for other projects. Support for renewable energy installations, particularly solar photovoltaic (PV) systems, was also requested by stakeholders in consultation performed for the VEU emissions abatement targets in December 2019.

In response to stakeholder feedback a new version of the M&V specifications has been created – M&V Specifications V4.0 – which better supports on-site renewable energy generation by allowing export of renewable energy outside of the measurement boundary.

This change to the program is effective as of 18 December 2020. Existing projects may submit a request for variation to the ESC to allow export of renewable energy.

Research indicates that VEU could support installation of up to 100 megawatts of solar panels within ten years, providing Victorians with up to $20 million in incentives. This change will also allow the VEU program to assist Victoria in meeting upcoming VRET commitments.

Please note:

  • A correction has been made to Equation 2 of the Specifications which improves the accuracy of emissions abatement calculations for bioenergy and other fuel-switching projects
  • Some internal section references within the document have been corrected.

Download the updated Specifications and Frequently Asked Questions on the change here:

The Hon. Lily D’Ambrosio MP, Minister for Energy, Environment and Climate Change announced on 8 December 2020 that the VEU targets for 2022 to 2025 will be:

  • 6.7 million certificates in 2022
  • 6.9 million certificates in 2023
  • 7.1 million certificates in 2024
  • 7.3 million certificates in 2025.

The targets will deliver significant benefits to the energy system, help Victoria achieve its climate goals by locking in 28 million tonnes of emissions savings, and reduce energy prices for all consumers, whether they participate or not. On average, participating households and businesses stand to save over $120 and $510 respectively each year.

The targets herald a new phase of the program by expanding incentives to a broad range of crucial energy demand-side technologies that will support the cost-effective transition of the energy sector. They will further support recovery by providing an additional $1.3 billion in investment in the demand-side management industry between 2022 and 2025 and supporting over 2200 jobs annually.

The Department has listened to stakeholder feedback received in response to its consultation on targets, and throughout the coronavirus pandemic. In recognition of the need of an orderly and supported transition, the electricity emissions factors need to be updated to reflect increasing renewable penetration. Introducing this change through gradual decreases in each year to 2025 will support industry transition.

Increases to shortfall penalty rates will support an expanded range of activities and be introduced gradually as part of this support for transition.

Commencement Date

Shortfall Penalty

Electricity emissions factor

(in tonnes of carbon dioxide equivalent emissions per megawatt hour)

31 July 2021

$70

0.9546

31 January 2022

$80

0.8142

31 January 2023

$90

0.6738

31 January 2024

$90 (subject to 2023 review)

0.5334

31 January 2025

$90 (subject to 2023 review)

0.393

The Department will release a document shortly that outlines the reasons for its decision and responds comprehensively to feedback received from stakeholders.

The Department invited stakeholders to attend the 17 December forum held by the Essential Services Commission at which it will provide further information on these matters. Stakeholders will have the opportunity to ask questions at this forum.

Victoria has moved to the Last Step of the roadmap to reopening, with key changes outlined in the Premier's media statement.

The requirements set out for the construction industry have been updated. The main change is that businesses are now allowed to doorknock for sales purposes.

Consistent with government requirements, all businesses involved in this form of lead generation and all other Victorian Energy Upgrades (VEU) activities must have an up-to-date COVIDSafe Plan for each workplace/site and must adhere to these at all times. Your COVIDSafe Plan must be consistent with requirements set out for the construction industry: https://www.coronavirus.vic.gov.au/coronavirus-sector-guidance-construction.

For businesses using doorknocking for lead generation, your COVIDSafe plan must also demonstrate your actions to help slow the spread of coronavirus (COVID-19) and manage risks while doorknocking; this will include face masks, physical distancing requirements and appropriate record keeping to support contact tracing. Details of how to prepare your COVIDSafe Plan are available at: https://www.coronavirus.vic.gov.au/creating-a-covidsafe-workplace

The Department of Environment, Land, Water and Planning (DELWP) and the Essential Services Commission will closely monitor the actions of VEU accredited providers and their lead generators, including responding and reporting to complaints.

DELWP recognises that coronavirus (COVID-19) restrictions have had a significant impact on businesses that participate in the VEU program and would like to thank program participants for their perseverance and engagement over this period.

Information on industry restrictions and guidance should be reviewed regularly at www.coronavirus.vic.gov.au.

Currently suspended Victorian Energy Upgrades (VEU) activities, that is high-volume residential activities, will be reinstated from 28 October in alignment with the government’s changes to restrictions in metropolitan Melbourne for businesses undertaking these types of activities in residential premises.

Incentives for the following activities under the VEU program will be reinstated from this date:

  • Incandescent lighting upgrades (Part 21 under the Victorian Energy Efficiency Target Regulations 2018)
  • Low-flow shower roses (Part 17)
  • Weather sealing (Part 15)
  • In-home display units (Part 30).

Consistent with government requirements, all businesses involved in these and all other VEU activities must have a COVIDSafe Plan. Employers engaged in VEU activities must have a High Risk COVIDSafe Plan in place for each workplace/site and must adhere to these at all times.

Details of how to prepare your COVIDSafe Plan are available at: https://www.coronavirus.vic.gov.au/creating-a-covidsafe-workplace

Your COVIDSafe Plan must be consistent with requirements set out for the small-scale construction industry: https://www.coronavirus.vic.gov.au/coronavirus-sector-guidance-construction.

The Industry Restart Guidelines Small-scale Construction FAQs allow these activities in occupied residential premises where it is possible to create a physical barrier between workers and occupants and/or the occupier can temporarily vacate the premises for duration of the works.

Doorknocking for sales and lead generation is not allowed anywhere in Victoria.

The suspension of some VEU program activities has been maintained over these past months consistent with the government’s restrictions for a wide range of business in metropolitan Melbourne. DELWP recognises that these restrictions have had a significant impact on businesses that participate in the VEU program and would like to thank program participants for their perseverance over this period.

Information on industry restrictions and guidance should be reviewed regularly at www.coronavirus.vic.gov.au.

Changes to Part 21 Lighting Incentives

The coronavirus (COVID-19) restrictions have significantly limited residential lighting upgrade activity in 2020 to date – and some impacts may continue to be felt as this sector restarts following the lifting of the suspension.

Taking account of this disruption to activities, DELWP has revised the date at which the phase down of residential lighting incentives will commence – this change revises the date published in the Victorian Energy Upgrades Lighting Activities – Response to Consultation on 30 September 2020, as follows:

The changes to Incandescent lighting upgrades (Part 21) scheduled for 31 March 2021, will now commence on 30 June 2021.

This change provides program participants with a clear notice period and a further three months of unrestricted activity with current incentives, to address concerns about supporting their ability to deliver significant further upgrades to Victorian households, meet forward contracts and plan for transition of their business models.

VEU participants are encouraged to regularly review guidance and Frequently Asked Questions for the construction industry, which provides relevant information about the types of activities allowed under different restriction levels and steps of reopening: www.coronavirus.vic.gov.au/coronavirus-sector-guidance-construction.

On 29 September, specific updates were made for solar and energy efficiency, clarifying which energy efficiency activities are permitted under each step of reopening. Refer to the Industry FAQ – Small Scale Construction for details.

Anyone doing energy upgrades, including their sub-contractors, must ensure they are compliant with the permitted workplaces requirements and COVIDSafe Plan (or High Risk COVIDSafe Plan) requirements.

DELWP published the Victorian Energy Upgrades – Lighting Activities Issues Paper – Response to Consultation.

A total of 49 stakeholder submissions were received through the consultation, which provided feedback specific to the proposed changes to lighting activities in the program. Thanks to all those who provided input into the consultation process.

DELWP has considered this feedback and the supporting evidence and decided to revise all changes to lighting activities. This decision will support program participant business transition and planning and minimise the impacts on jobs, particularly in consideration of the impact of coronavirus (COVID-19).

For information on the decision and the timeline of changes to lighting activities, go to the VEU Consultation page .

For more information on the consultation and to download the Lighting Response to Consultation, please visit Engage Victoria: https://engage.vic.gov.au/victorian-energy-upgrades/lighting.

The suspension of incentives for the following high-volume activities will continue to apply in both residential and non-residential premises across Victoria.

  • Incandescent lighting upgrades (Part 21 in the Victorian Energy Efficiency Target Regulations 2018)
  • Low flow shower roses (Part 17)
  • Weather sealing (Part 15)
  • In-home display unit (Part 30).

The use of doorknocking as a form of lead generation or sales in the VEU program is not permitted anywhere in Victoria.

For up-to-date information, visit www.coronavirus.vic.gov.au

What help is available for businesses impacted by coronavirus (COVID-19)?

We understand the current situation and coronavirus impacts are challenging for some program participants. For those businesses dealing with financial impacts or closures, the State Government will provide support through an expanded Business Support Fund.

Businesses across the state can access information by calling the Business Victoria hotline on 13 22 15. This includes information about support services, including those available through Business Victoria, which offer mentoring to help operators develop business continuity and recovery plans.

Businesses can also find advice, updates and support to help your workplace plan from Business Victoria at: https://www.business.vic.gov.au/disputes-disasters-and-succession-planning/illness-and-business-management-plan/coronavirus-business-support

Subscribe to updates

To receive updates about VEU and upcoming opportunities, or to provide stakeholder feedback, please email energy.upgrades@delwp.vic.gov.au or fill in the form below.



Page last updated: 21/04/21