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Aggregated small energy users

26 August 2016

Is the aggregated small energy users method suitable for your business?

  • Are you looking to offer goods and services to a large number of small energy users (households or small businesses) to help them to reduce their electricity or gas usage?
  • Do you have access to the energy usage data for the small energy users and the right to use that data?
  • Are you willing to engage an accredited statistician to assist in running the project?

If you have answered yes to all of the above questions, the aggregated small energy users method may be suitable for your business. Read on for further information including eligibility and compliance details.

The aggregated small energy users method sets out the rules for projects that reduce emissions by reducing the energy use of a large number of households or small businesses.

The method does not prescribe activities that must be undertaken. This provides flexibility for participants to determine what goods and services are most appropriate for their project.

Goods or services that could be undertaken to reduce energy use include:

  • changing behaviour associated with energy use by, for example, providing information through letter drops to the small energy users
  • upgrading equipment so it uses less energy such as LED lighting, or efficient water heating, space heating and cooling
  • changing building elements that influence energy use, including draft sealing of doors and windows.

The method is based on a similar method in the New South Wales Energy Savings Scheme (Aggregated metered baseline method), however, there are some differences due to overall scheme design and coverage. Please see the method’s legislative requirements and the quick reference guide below for further information about the method.

Method variations

Section 114 of the Carbon Credits (Carbon Farming Initiative) Act 2011 (the Act) allows for methods to be revised and varied. This is to ensure methods continue to operate as originally intended. Variations to methods are developed and drafted by the Department of the Environment. Information on draft methods and method variations is available on the Department of the Environment’s website.

The Clean Energy Regulator recommends making yourself familiar with proposed method variations relevant to your project should they arise, and how any changes between the original method and the varied method may affect your project plan.

Legislative requirements

You must read and understand the method and other legislative requirements to conduct an aggregated small energy users project and earn Australian Carbon Credit Units (ACCUs). This includes:

Tools and Resources

Quick reference guide to the aggregated small energy users method

This quick reference guide provides basic information about eligibility criteria and obligations that must be met to earn ACCUs from an aggregated small energy users project. It includes specific links to the relevant legislation but should not be viewed as an alternative to reading the full legislative requirements. Additional information can also be found in the full method guide linked above.

Contents

Crediting period

Seven years – The crediting period is the period of time a project can apply to claim Australian carbon credit units.

Relevant section of the Act:

Eligibility requirements

There are general eligibility requirements in the Act, which include:

In addition, the method requires that you:

  • have access to energy consumption data and have the right to use that data to calculate carbon abatement for an Emissions Reduction Fund project
  • set up a control group and a treatment group, and
  • engage a statistician accredited by the Statistical Society of Australia Inc. to certify the selection process of these groups as random and unbiased.

Section 11 of the method also requires that specific information is included in a project application before the project can be considered eligible. You should ensure you refer to this section and provide all the required information in your application.

Relevant section of the Act:

Relevant section of the Method:

Project activities

The small energy users must be divided into two groups:

  • a treatment group that is offered your goods and services, and
  • a control group that is not targeted with the offers.

A project involves offering goods and services to the small energy users treatment group, such as households and small businesses, to help them reduce their consumption of grid electricity and natural gas. Goods and services offered could include:

  • upgrading equipment, such as installing energy efficient light bulbs or heating
  • changing the way equipment is used, such as installing standby power controllers for audio-visual equipment
  • changing building elements, such as installing draft seals on external doors, or
  • providing information to influence household energy consumption behaviour.

Advice on defining the populations to include in your project, including how to determine the required size, can be found in the full method guide.

The method includes three different sub-methods for calculating abatement, each with different data requirements. You must decide which sub-method you will use before the initial selection for any populations in the project.

  • Sub-method 1 requires only energy consumption data to be collected while the project is operating. It directly compares the energy consumption for the treatment and control groups.
  • Sub-method 2 requires energy consumption data from before the project commenced to establish a baseline. This establishes a pre-treatment baseline that helps improve the estimation of the differences between abatement in the control and treatment groups.
  • Sub-method 3 allows you to model abatement at sites when the project is operating. Abatement is calculated by multiplying the daily abatement by the number of days for which there is data from each site.

It is also important that you understand and manage your project in accordance with the restrictions on interactions with the control and treatment groups.

Relevant section of the Method:

How is abatement calculated?

The difference between the amounts of energy used by the treatment group and the control group during your project is used to calculate the abatement. For the results to be statistically valid, each group normally needs to include thousands of small energy users.

Abatement is calculated from the difference in energy consumption, and therefore abatement, between the treatment group and the control group. If this difference is found to be statistically significant, the net abatement for the reporting period is then calculated. If it is not statistically significant, then abatement for that reporting period is zero.

The way in which abatement is calculated will vary depending on which sub-method (1, 2 or 3) is being used. Details on how to calculate abatement using each sub-method, as well as an example of the process for sub-method 1, can be found in the full method guide.

Relevant section of the Method:

Reporting requirements

In addition to the reporting requirements of the Act and the Rule, Section 64 in the method sets out the information that must be included in the first and subsequent reports. For example, reports must contain descriptions of the populations used for control and treatment groups, and of the goods or services offered.

A reporting period may comprise either one measurement period or two one-year measurement periods (for two consecutive years). For each population, a measurement period is the time during which energy consumption is measured and emissions reductions are calculated. Measurement periods run for one year and must be wholly contained within a reporting period. You will therefore have to report either every one or two years.

Relevant section of the Act:

Relevant section of the Rule:

Relevant section of the Method:

Notification requirements

Section 66 in the method includes one notification requirement:

  • You must notify the Clean Energy Regulator of a decision to change the activities undertaken as part of a treatment for a population in the project, if the new activities are not included in the original project application or a previous notification.
  • This must be done at least 30 days before starting the new activities.

Relevant section of the Method:

Monitoring requirements

In addition to the general monitoring requirements of the Act, Sections 70–73 in the method describes the specific monitoring requirements that a project must meet. This involves collecting data on the consumption of electricity, natural gas or both at sites in the control and treatment groups. The method includes a number of options for collecting this data, including using data that is already being collected for billing purposes.

If you have chosen to use other variables under sub-method 3, the method also includes requirements on how to monitor those variables.

Relevant section of the Act:

Relevant section of the Method:

Record-keeping requirements

In addition to the record-keeping requirements of the Act and the Rule, projects must also meet the specific record-keeping requirements set out in Section 68 of the method. The different types of records that must be kept include:

  • records (including evidence of the day or decision) of the choices made about options for calculating abatement
  • information about sites included in the project, and
  • disposal records for any equipment removed or replaced as part of the project.

Relevant section of the Act:

Relevant section of the Rule:

Relevant section of the Method:

Audits

All projects receive an audit schedule when the project is declared and must provide audit reports according to this schedule. A minimum of three audits will be scheduled and additional audits may be triggered during a project. For more information on the audit requirements, see the Act, the Rule and the audit information on our website.

Relevant section of the Act:

Relevant section of the Rule:

Specialist skills

Specialist skills will be required to carry out the project. Section 15 of the method states that you must engage a statistician accredited by the Statistical Society of Australia Inc. when selecting sites for the control group and treatment group. Other specialist skills might include a qualified energy manager.

Relevant section of the Rule:

Relevant section of the Method:

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