Media Releases | 19th Dec, 2014

Environment Victoria welcomes continuation of the Victorian Energy Efficiency Target


19 December 2014


Environment Victoria today welcomed the announcement by Energy Minister Lily D’Ambrosio that the Andrews Government will retain the Victorian Energy Efficiency Target (VEET).

Environment Victoria’s Safe Climate Campaign Manager Nicholas Aberle today said:

“Since its introduction in 2009, the VEET scheme has been very effective at reducing power bills for participating homes, creating thousands of jobs and cutting Victoria’s carbon pollution.”

“The VEET scheme helps avoid five million tonnes of greenhouse gas emissions each year, which is almost 5% of the state’s total emissions. This is an important scheme to retain.”

“The International Energy Agency has said that energy efficiency is routinely undervalued, even though it can significantly reduce power bills and emissions with very short pay-back times.”

“We’re encouraged that the Andrews Government is looking to increase the target further in 2015.”

“Energy efficiency programs will become even more important as gas prices rise because of competition with the new east-coast gas export market.”

The announcement from the Andrews Government comes on the same day that the Essential Services Commission revealed electricity and gas disconnections because of unpaid bills reached an all-time high in 2013/14.

“With a record number of Victorians being disconnected from their electricity and gas because they couldn’t afford power bills, helping low income households with energy efficiency home retro-fit programs is a win-win for both households and the environment,” said Dr Aberle.

For comment:

Nicholas Aberle: Safe Climate Campaign Manager
9341 8112 / 0402 512 121



Key facts about the Victorian Energy Efficiency Target:

  • Established in 2009 with bipartisan support. The Coalition Government doubled the target to 5.4 million tonnes in 2011. In May 2014, the government announced its intention to close the scheme at the end of 2015 following a transitional year with a target of 2.0 million tonnes, and introduced legislation into parliament to that effect
  • As of February 2014, a total of 2.6 million energy-saving products had been installed at 1.4 million separate sites across Victoria. The direct benefit accruing to these households is estimated at $308 over the first five years of the scheme.
  • More than 39 percent of VEET installations have occurred outside the Melbourne metropolitan area, and predominantly in low-income areas.
  • VEET has achieved 23 million tonnes of greenhouse emission reductions since 2009, or nearly 4 per cent of Victoria’s total emissions over that time.
  • VEET has contributed to lower power consumption and lower peak demand, delivering estimated savings of 1852 gigawatt hours, equivalent to 3.7 percent of Victoria’s annual electricity use. During the January 2014 heatwave VEET conservatively contributed 187 mW, without which peak demand would have exceeded the record set in January 2009 in the lead up to the Black Saturday bush fires.
  • There are 140 accredited businesses in manufacturing, retail, trades and services, employing an additional 2000 workers as a result of the scheme.
  • The Australian Energy Market Commission has calculated the cost of the VEET scheme in 2013/14 to be 0.26 of a cent per kWh. This represents less than 1 per cent of an average electricity bill.
  • The Napthine Government has defended its decision to scrap VEET by suggesting the scheme will cost taxpayers $700 million. Unfortunately, the government’s modeling is fatally flawed, according to research commissioned by the Brotherhood of St. Laurence and the industry. The government’s modeling systematically understated the benefits of energy efficiency and overstated the costs, or used out of date numbers.
  •  And yet despite this apparent bias, the government’s analysis still came to the conclusion that households would benefit from lower bills if VEET was continued.
  • It looks like one of the factors influencing the government’s decision was the potential impact on energy generator profits, with the business impact statement stating “the benefits accrued by consumers participating in the scheme, while outweighing the costs incurred by non-participating consumers, represent a transfer from energy generators to these consumers through a loss of profits.”