Targets and penalties

This page explains:

  • how individual targets and penalties are calculated in your ESS and PDRS Annual Statements.
  • how to meet your target
  • how we notify you of any penalty

Individual scheme participant targets

As a scheme participant you must meet an individual target. Individual targets are set based on scheme targets.

ESS individual energy savings target

As a scheme participant of the ESS, you must meet your individual energy savings target. This target is calculated as per clause 9 of Schedule 4A to Electricity Supply Act 1995. 

Individual Energy Savings Target   = Liable acquisitions   x Energy Savings Scheme Target   x Energy Conversion Factor

Schedule 5 of the Electricity Supply Act - 1995 sets out the energy savings scheme target and energy conversion factor for each compliance period. 

TESSA calculates your individual energy savings target in your ESS Annual Statement case.

PDRS individual certificate target

As a scheme participant of the PDRS, you must meet your individual certificate target. This is calculated as per clause 92 of Schedule 4A to the Electricity Supply Act 1995.

Individual Certificate Target   = Individual Liable Demand   x Scheme Liable Demand   x Scheme Certificate Target

Your individual certificate target is a proportion of the scheme certificate target based on: 

  • your individual liable demand
  • the scheme liable demand.
     

TESSA calculates your individual liable demand in your Individual Liable Demand case. This is calculated as per clause 89 of Schedule 4A to the Electricity Supply Act 1995.

Individual Liable Demand   = Liable acquisitions   / (4 x n)   x 1000

We publish the scheme liable demand and scheme certificate target in our Relevant information for scheme participants spreadsheet. TESSA calculates your individual certificate target in your PDRS Annual Statement case.

Liable acquisitions

Liable acquisitions include the purchase of and supply of certain electricity. 

Liable acquisitions are defined in clause 10 of Schedule 4A to the Electricity Supply Act 1995 for the ESS and in clause 90 of Schedule 4A to the Electricity Supply Act 1995 for the PDRS and explained in detail in the Compliance Guide - Scheme Participants.

As a scheme participant, you may be entitled to deduct from your liable acquisitions an exempt electricity load. Our Exemptions legislation page provides further information on exemptions.

Meeting your individual target

You meet your ESS individual energy savings target by surrendering ESCs equivalent to your individual energy savings target.

You meet your PDRS individual certificate target by surrendering PRCs equivalent to your individual certificate target.

You may elect to carry forward a shortfall of up to 10% of your individual energy savings target or individual certificate target to the next year. However, you must remedy this in the next year.

The place to nominate surrendering certificates or carrying forward a shortfall is in your ESS Annual Statement or PDRS Annual Statement in TESSA. This must be done by the due dates listed on the Scheme participant compliance timeline.

Shortfall penalties

Energy savings shortfall penalty (ESS)

If you do not meet your individual energy savings target or shortfall carried forward from the previous year, you have an energy savings shortfall. You are then liable to pay an energy savings shortfall penalty by the due date listed in the Scheme participant compliance timeline.

TESSA calculates your energy savings shortfall penalty in your ESS Annual Statement case. This is calculated as per clause 15 of Schedule 4A to the Electricity Supply Act 1995.

Shortfall penalty  = Shortfall  x Scheme Penalty Rate

Shortfall penalty (PDRS)

If you don’t meet your individual certificate target or shortfall carried forward from the previous year, you have a shortfall. You are then liable to pay a shortfall penalty by the due date listed in the scheme participant compliance timeline.

TESSA calculates your shortfall penalty in your PDRS Annual Statement case. This is calculated as per clause 98 of Schedule 4A to the Electricity Supply Act 1995.

Shortfall Penalty  = Shortfall  x Scheme Penalty Rate

Notification of a shortfall penalty

We will advise you of any energy savings shortfall penalty (ESS) or shortfall penalty (PDRS) in the Notice of Assessment issued in your ESS Annual Statement or PDRS Annual Statement case in TESSA. We will also issue an invoice for the energy savings shortfall (ESS) or shortfall penalty (PDRS). 

Do not pay the penalty until you receive the invoice.

Scheme penalty rates

The Scheme Penalty Rate for each scheme is adjusted annually for movement in the Consumer Price Index. We publish the Scheme Penalty Rate for each compliance period and scheme in our Relevant information for scheme participants spreadsheet.

More information