The Peak Demand Reduction Scheme is NSW’s new initiative aimed at reducing energy demand during peak hours. It started in 2022 and will end in 2050.
The Peak Demand Reduction Scheme sets a peak demand reduction target for electricity retailers and large users. To meet their target, retailers and large users create or buy peak reduction certificates (PRCs) for eligible activities that reduce energy usage during hours of peak demand.
The Peak Demand Reduction Scheme Rule (PDRS Rule) details how certificates are created. We consult with industry stakeholders regularly to ensure the rule remains relevant to current technical and market conditions. The rule is updated on an annual basis.
The requirements for creating certificates are set out in the rule. Each certificate represents 0.1 kilowatt-hour (kWh) of peak demand reduction capacity. Peak demand reduction capacity must be available during summer afternoons and evenings, which is when demand for electricity is highest in NSW.
The current PDRS Rule is effective from 29 September 2022. It was amended on 17 February 2023 to ensure small businesses are eligible for some specific activities.
How we developed the Peak Demand Reduction Scheme
We outlined a plan to introduce a new certificate scheme in the NSW Electricity Strategy. This new scheme was developed to encourage dependable peak demand reduction as part of the Energy Security Safeguard.
Following the publication of the Energy Security Safeguard position paper in 2021, the NSW Electricity Supply Act 1995 was amended to establish the new scheme.
Following public consultation, we decided that the compliance period will cover the summer period. In contrast, the Energy Savings Scheme covers a calendar year.
You can read more about the scheme in the Safeguard position paper.
We consulted with our stakeholders in 2022 to shape the PDRS Rule. This feedback was used to inform the final PDRS Rule. To learn more about our consultation process, visit the History of PDRS rule changes page.