Transcript: Recouping your energy upgrade costs – Using the VEU program

By participating in the Victorian Energy Upgrades (VEU) Program, farmers can potentially recoup 10-100% of the costs of a project that reduces electricity or natural gas consumption on farm.

The VEU Program

The VEU program can be a great way to recoup some of the implementation costs of energy reducing projects at your farm. Before project works commence, find out if your project is eligible to participate in the program. You can do this by talking to an Accredited Person (AP).

The typical VEU Process:

Step 1 (pre-VEU process) – Identifying Projects

You should identify projects that reduce electricity or gas consumption on-farm, for example, via an energy audit.

“I quite liked speaking to other farmers to see what projects they were familiar with, but you can also speak to an external expert. Energy audits are another way to identify opportunities you may not be aware of. Examples of projects that could be implemented include the replacement or upgrading of refrigeration systems, installation of VSDs on irrigation pumps, installation of VSDs on vacuum pumps, and more.” – Chris Rieniets, Yinnar Dairy Farm

Step 2 – Contact an Accredited Person (AP)

The Accredited Person (AP)

The easiest way to participate in the VEU program is to engage an AP, typically for no upfront cost [1]. The AP guides you through the process, including preparing all paperwork and calculating the project’s energy savings to produce VEECs (Victorian Energy Efficiency Certificates) [2].

Step 3 – Provide necessary project information to AP

The measurement and verification (M&V) method is used to calculate the energy savings associated with the project’s implementation. This is important as the energy savings lead to the creation of VEECs which are later sold to recoup some of the costs of the project. As part of the M&V method, you will be asked to provide some information to the AP, for example, energy consumption and relevant production data. Depending on the project, additional data collection may be required as pre-existing data may be insufficient.

Step 4 & 5 – Getting pre-approval

The AP develops and presents a scoping plan and draft project plan to the Essential Services Commission (ESC) for approval (Step 4). If viable, the ESC approves your project for participation in the VEU program (Step 5).

This step is critical. You must get approval to participate in the VEU program before picking up any tools or purchasing equipment, otherwise the project is automatically ineligible.

Step 6 – Implement your project

Implement the project (only after ESC approval has been received in Step 5, otherwise the project will be ineligible).

Step 7 & 8 – Post-project verification of savings

Once the project has been implemented, the AP will begin to collect data, typically over the next 12 months[3], and then submit an impact report to the ESC.

Step 9 – Recoup some project costs

The AP facilitates the creation of VEECs, which are sold, generating revenue to recoup some of your project costs.

“All in all, the process is relatively simple as you will have the help of an Accredited Person to guide you throughout the journey.” – Chris Rieniets, Yinnar Dairy Farm

The VEU process summary

• The above diagram represents the path taken for the majority of projects. Other approaches, such as becoming an AP yourself, may also be used.

[1] Similar to other brokerage services, APs often do not require up-front payment, and instead take a pre-determined portion of the VEEC sale price. However, APs can also offer different commercial arrangements.

[2] VEECs are sold by an Accredited Person on behalf of the farmer to recoup some of the costs of the project.

[3] Shorter measurement periods are possible for projects or farms without seasonal variation in demands.

For more information

How does the VEU program work? (See the VEU program diagram attached below)

List of APs: https://www.veu-registry.vic.gov.au/Public/Participants2.aspx

Agriculture Victoria website: https://agriculture.vic.gov.au/farm-management/energy-on-farm

Energy Smart Farming Community of Practice: https://extensionaus.com.au/energysmartfarming/home/

VEU Website: https://www.esc.vic.gov.au/victorian-energy-upgrades-program