This page addresses some common questions about Victorian energy efficiency certificates (VEECs). For a more detailed account of VEECs and the methods of creating them, consult the Explanatory Note - Creating VEECs from Prescribed Activities, available at the bottom of this page.
What is a VEEC?
Victorian energy efficiency certificates (VEECs) are electronic certificates created in accordance with the Victorian Energy Efficiency Target Act 2007 (the Act) and the Victorian Energy Efficiency Target Regulations 2008 (the Regulations). Each VEEC represents one tonne of carbon dioxide equivalent (CO2-e) abated by specified energy saving activities known as Prescribed Activities.
How many VEECs can be created for a given Prescribed Activity?
The number of VEECs that a given activity can yield depends on the amount of CO2-e abatement that the activity will cause. The abatement is calculated by comparing the difference between (i) the energy use of the new product and (ii) the 'baseline' energy use, which refers to the amount of energy that would have been used if the new high efficiency product had not been installed.
The Regulations provide the methodology and values for calculating the CO2-e abatement (and therefore the number of VEECs eligible for creation) for each Prescribed Activity. The ESC also provides VEEC calculators, accessible through the menu on the left, that give an indication of how many VEECs may be created for each Prescribed Activity.
Who is eligible to create VEECs?
VEECs can only be created by entities accredited by the Essential Services Commission (ESC). These entities are known as Accredited Persons. Anyone can apply to be accredited, subject to payment of a $500 fee. Accredited Persons range from sole traders and small businesses through to large appliance stores and major energy retailers.
For more information about the opportunities and obligations involved in getting your business accredited under the VEET scheme, navigate to the Getting Accredited section of the website using the menu on the left.
When can VEECs be created?
VEECs must be created no later than six months after the end of the year in which the Prescribed Activity was undertaken. For example, if a Prescribed Activity was undertaken in February 2011, VEECs could be created as a result of that activity up until 30 June 2012.
How are VEECs created?
VEECs can only be created by Accredited Persons who successfully complete specified Prescribed Activities. There are around 35 Prescribed Activities covered by the VEET scheme, and these are defined in the Regulations and listed on the VEET Activities By Sector page of this website. It is important to note that most Prescribed Activities include a decommissioning component. Certain activities - such as replacement of a hot water service or light globes - are not deemed to have been completed until the old appliance or product has been rendered permanently unusable. Some Prescribed Activities can only be undertaken in residential premises, while others are limited to business and non-residential premises. Around 25 Prescribed Activities can be conducted in both.
Once an Accredited Person has successfully completed a Prescribed Activity on behalf of an energy consumer, that energy consumer must sign what is known as a VEEC assignment form. By signing the VEEC assignment form, the energy consumer 'assigns' to the Accredited Person the right to create the VEECs relating to that particular Prescribed Activity. The VEEC assignment form contains important information that the Accredited Person will need in order to create VEECs.
The Accredited Person uses the information on the VEEC assignment form - such as the consumer's name and address and details of the product installed - to complete a VEEC creation application via their online account platform. After the submitted data passes detailed quality checks - including being matched against an address database - a specific number of VEECs are created.
How are VEECs registered?
Even after they have been created, VEECs are not valid (meaning they cannot be bought, sold or surrendered) until they have been registered. When the ESC is notified that an Accredited Person has created some VEECs, it must then decide whether to register them. To make its decision, the ESC uses a range of assessment methodologies to evaluate whether the certificates have been properly created. ('Properly created' means the accredited business has complied with all the relevant sections of the Act and the Regulations that govern the creation of certificates).
Once it is satisfied that the VEECs have been properly created, the ESC levies a registration fee of $1 per VEEC. Once payment is received, the ESC registers the certificates and notifies the Accredited Person that the certificates are now valid. Depending on the quality of the data submitted to the ESC, this process can take anywhere from a few days to a month or more.
For further information on the process of VEEC creation and how the ESC undertakes an assessment of VEECs prior to registration, please see the Explanatory Note - Information on VEEC Creation and Assessment available below.
Are there penalties for improperly creating VEECs?
The 'improper creation' of VEECs refers to cases where Accredited Persons (or their subcontractors) fail to comply with the sections of the Act and the Regulations that govern the undertaking of Prescribed Activities and the creation of certificates. Importantly, even if it is a subcontractor's actions that have led to improper creation, the liability still lies with the Accredited Person.
The ESC uses a variety of methods, including desk audits, field audits, data matching, and trend analysis, to test for and prevent the improper creation of certificates. If instances of improper creation are discovered, prosecution and a range of other penalties may be applied. Even if a VEEC has been registered, the ESC can still take action against the Accredited Person under section 20 of the Act if subsequent investigations reveal that the certificate was improperly created.
The ESC can also, under section 40 of the Act, require an Accredited Person to surrender VEECs equal to the number that have been determined were improperly created. The ESC may require such a 'make good' surrender even if the VEECs that were improperly created have already been registered and sold by the Accredited Person.
How are VEECs 'sold'?
The process by which VEECs are bought and sold is known as a transfer. When an Accredited Person wants to transfer its VEECs, it must find a buyer in the VEEC market. The buyer may be a Relevant Entity (large energy retailers with a liability under the scheme), or another Accredited Person, or any other individual or organisation that holds a VEET account (only VEET account holders can buy, sell or hold VEECs).
The ESC does not provide a trading floor for the VEEC market but instead merely facilitates access to information about current owners of certificates, and records details of change of title resulting from VEEC transfers. Any terms and conditions of sale, including VEEC delivery and financial settlement, must be negotiated between the parties involved.
When an Accredited Person decides to undertake a VEEC transfer, it must use the transfer function available through its online VEET account platform. Account holders experiencing difficulty using this function should contact VEET Support on (03) 9032 1310. Once the transaction has been completed, the public Register of VEECs is altered to reflect the change of ownership.
How are VEECs surrendered?
Before 30 April each year, Relevant Entities must surrender registered VEECs equal to their VEET scheme liability for the previous calendar year. For more details about how that liability is calculated, navigate to the Energy Retailers page using the menu on the left. Relevant Entities nominate VEECs for surrender by using the surrender function available through their online VEET account platform. Account holders experiencing difficulty using this function should contact VEET Support on (03) 9032 1310. If the ESC is satisfied the VEECs are eligible for surrender, the ESC then permanently invalidates those particular certificates. The surrender of VEECs does not attract a fee.
In separate circumstances, the ESC may require an Accredited Person to surrender VEECs equal to the number that the ESC determines the Accredited Person has created improperly. This is known as a mandatory VEEC surrender.
VEECs may also be surrendered through what is known as a voluntary VEEC surrender, which is separate from the obligatory surrenders required of Relevant Entities and can be made for any reason by any VEET account holder in possession of VEECs. Voluntary surrenders are accepted throughout the year.
What vintage of VEECs can be surrendered for a given calendar year?
To meet their VEET liability for a given compliance year, Relevant Entities must surrender VEECs that comply with two criteria:
- The VEECs must not have expired. That is, they must have been created as a result of a Prescribed Activity that was undertaken within six years before the date on which the Relevant Entity makes its surrender; and
- The VEECs must have been created before 30 January of the year following the relevant compliance year. For instance, VEECs created after 30 January 2012 cannot be used by Relevant Entities to meet their 2011 obligation, but can be used to meet their 2012 compliance year liability.
The Register of VEECs is available via the menu on the left. Users can search the register using both of the above criteria - activity date and creation date - to identify which certificates are eligible for surrender in a given year.
When do VEECs expire?
A VEEC expires six years from the date on which the Prescribed Activity was undertaken, or upon surrender to the ESC.
Where is the VEEC Register?
The ESC maintains a Register of VEECs, available via the Registers section of this website (see menu on the left).