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Setting up and running an aggregated small energy users project

How an aggregated small energy users project is established is critical for calculating abatement and how many ACCUs may be issued. Parts three and four of the method and explanatory statement describe in detail how to set up a project and how to calculate the abatement that has occurred.

Setting up and running an aggregated small energy users project can be divided into the following parts. The relevant sections of the method and explanatory statement are given and should be referred to.

Establish the project

Part three of the method sets out choices that must be made at the beginning of the project, and the sequence in which these choices must be made. For example you must choose the sub-method you will use to calculate the net abatement amount for a population before allocating sites in that population to control and treatment groups.

You need to include a large number of sites in your project. This is because you need to be able to calculate a net abatement amount that is statistically valid.

Choose a sub-method

When choosing a sub-method, you should consider the data you have available, the cost of collecting additional data, and the potential benefits for the precision of your abatement estimate.

The method includes three different sub-methods for calculating abatement, each with different data requirements:

  • Sub-method one requires only energy consumption data to be collected while the project is operating. It directly compares the energy consumption for the treatment and control group. 
  • Sub-method two requires energy use 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 emissions in the control and treatment groups. 
  • Sub-method three allows you to choose to include other explanatory variables that can influence energy consumption. This can further improve estimates of the differences between emissions in the control and treatment groups.

Define the population

You must define one or more populations to include in your project. Your population can either be a list of specific sites (e.g. each site identified by address), or an unambiguous description of the types of sites that will be members of the population (e.g. all residential gas customers of retailer XYZ in postcodes 1234 and 9876). Each population must be large enough and with energy usage data that are sufficiently similar to meet the requirements of the statistical tests of significance. 

For each population, make the following choices before allocating sites to control and treatment groups:

  • the sub-method that will be used to calculate abatement and, if sub-method three is chosen, any explanatory variables that will be used in the regression equation
  • the start date of the first measurement period
  • if sub-method two or three is chosen, dates of pre-treatment periods, or
  • for each site in the population, whether to cover natural gas, electricity or both at that site.

You must make a date-stamped record of these choices, as evidence that they were made before selecting control and treatment groups (see division three of part five of the method).

You must use a random selection method to allocate sites in the population to control and treatment groups. An accredited statistician must certify that you have done this in accordance with the method.  

How to determine the required population size

To receive ACCUs for an aggregated small energy users project, you must be able to meet the requirements of the statistical tests of significance for your chosen sub-method. 

The population size required to meet these requirements will depend on the magnitude of the effect and the variability in the population.

For example, a project where the treatment achieved 1% change in energy consumption across the treatment group would need a much larger sample size than a treatment which achieved a 10% change in energy consumption for the same group. Also, if the treatment has a variable impact, the sample size may need to be higher than if all of the population responds in a similar way.

You should conduct a statistical analysis, including a power analysis, to determine the population size required for your aggregated small energy users project. You are advised to consider seeking professional statistical advice if you do not have the statistical knowledge to do this yourself.

You should also consider how sites affected by attrition will impact the project. Consider whether you might need to add additional small energy users to ‘top-up’ the control or treatment group in a subsequent selection (see section 15 of the method). This means that you may not want to allocate every site in your population to your control or treatment groups so you can ‘top-up’ the groups if you need to.

When is a site affected by attrition?

 

A site is affected by attrition only if:

  • you no longer have access to data about consumption of electricity, natural gas or both at the site because the energy account is terminated, for example if the site occupant switches to a different energy retailer
  • for reasons beyond your control, you lose the exclusive legal right to use the energy consumption data for the project, or a site occupant explicitly withdraws their consent for their energy consumption data to be used for the project, or
  • you defined your population with reference to a particular type of site, and the site no longer fits the definition.

Once a site is affected by attrition, it must be excluded from the population for the rest of the crediting period. No sites can be removed from the project other than those that are affected by attrition.

Deliver your goods or services to the treatment group

You can now begin delivering the activity to the treatment group. The method does not require the activity to be delivered to every site in the treatment group. If a site declines the offer of goods and services, or if a site is missed when the treatment activities are undertaken, the site is retained in the treatment group for the purposes of calculating abatement for the project.   

You can offer goods and services that form part of the treatment to a site in the control group if, for example, the site occupant specifically requests them after becoming aware that they are being offered to other energy customers. Be aware that doing this could reduce the net abatement amount for the project. Additionally, under the method, activities cannot be offered to the control group that increase their energy usage.   

Conduct during the project

Part three division four of the method includes a number of restrictions on how you may interact with the control and treatment groups during the project. These are ongoing requirements which must continue to be met for the project to be, and remain, an eligible offset project.

The requirements of subdivision A are designed so that the control group remains an accurate indicator of what treatment group emissions would have been without the project.

For example, you must not provide advice to the control group that would encourage them to increase their energy consumption, unless it is done to the same extent in the treatment group. Furthermore, you must not change the metering arrangements for the energy consumption data if this would result in a greater difference between the metered energy consumption in the control and treatment groups.   

Removing inefficient equipment   

 

Section 30 of the method contains specific requirements for the removal or replacement of energy consuming equipment. If a treatment in the project involves the removal or replacement of equipment, the removed or replaced equipment must be disposed of or recycled in accordance with section 30. The requirements of section 30 apply to all removal or replacement activities conducted under the project, regardless of whether it is done by the registered participant, their agent, or a third party contractor. For example for a treatment where a contractor offered to replace inefficient lights with LED lights, you could either require the contractor to dispose of old lights, or sell them to a specialty recycler. The old lights could not be reused or resold for use elsewhere, because this would not reduce their overall emissions.   

Subdivision B includes requirements to prevent ‘carbon leakage’, where the project activities lead to an increase in emissions outside the measurement boundary for the project. For example, you must not encourage sites to switch to another energy source if this energy source is not being measured for the purpose of the project. This section also covers the disposal of equipment that is removed as part of the project.   

Other government programmes

Under the method you must not promote other government programmes to the treatment group to a greater extent than the control group. Section 21 of the legislative rules lists the other government programs for which this requirement applies, including the Renewable Energy Target and several state based energy efficiency schemes.  

If other government programs are taken up by sites in the control and treatment groups (without being promoted through the project) it will be accounted for indirectly in the calculation of abatement in the method. For example a participant sends leaflets promoting solar hot water to the entire control and treatment group, which results in equal proportions of both groups taking up the offer, resulting in no significant impact on the difference in energy consumption.

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