A regulatory change has been made to address how large-scale batteries in NSW are treated under the Energy Security Safeguard, with new rules taking effect from 19 September 2025.

Under the reform, purchases of electricity from the National Electricity Market (NEM) for charging scheduled bidirectional units—batteries of 5MW or greater—are excluded from liability under the Energy Savings Scheme (ESS) and Peak Demand Reduction Scheme (PDRS). The change applies to the 2024 ESS and 2024-25 PDRS compliance periods.

This resolves an issue that would otherwise have left operators of large batteries exposed to double counting of electricity acquisitions. Without the change, these operators could have faced higher costs under the schemes. Liability will now remain with the retailer supplying electricity that is later discharged back into the grid.

The amendment has been legislated through the Electricity Supply (General) Amendment (Scheduled Bidirectional Units Exclusion) Regulation 2025.

The reform forms part of ongoing adjustments to the Safeguard, which is reviewed every five years and delivered through three certificate schemes:

  • Energy Savings Scheme (ESS): improving efficiency of energy use.
  • Peak Demand Reduction Scheme (PDRS): lowering consumption during high demand periods.
  • Renewable Fuel Scheme (RFS): supporting production of green hydrogen, beginning in 2026.

The Government also noted that the reform is the first step in considering how other types of storage technologies are treated. It will consult with stakeholders on potential exemptions for additional storage options.

Stakeholder involvement remains a central feature of the process. Each year, the Safeguard’s rules are updated to reflect changes in technology and market conditions. Proposed amendments are subject to public consultation before they are finalised in the NSW Government Gazette.

Planned updates to the schemes extend through 2026, with several rounds of consultations and gazettals scheduled. These cover both the ESS and the PDRS, while the first review of the RFS is due in 2031.

Read more about the NSW Energy Security Safeguard on the NSW Climate and Energy Action website here.