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Responses from DCCEEW to enquiries about the Community Energy Upgrades Fund program

March 2024

ELIGIBLE ACTIVITIES/EXPENDITURE

1. Is solar PV-thermal (PVT) an eligible activity?  (currently being installed at North Sydney aquatic centre by Coolsheet)

Solar PV-thermal is an eligible activity under CEUF, however as you indicate it is ‘currently being installed’, this could suggest it may now be ineligible, due to Guidelines Section 5.2 confirming that to be eligible:

  • the expenditure must be incurred “between the project start and end date”, and,

  • “You must not commence your project until you execute a grant agreement with the Commonwealth.”


Project activities that are currently underway or that will be commenced (and/or their associated expenditure incurred) outside of the above requirements would then be considered ineligible.
 

2. Is geothermal an eligible activity?
 

Some applicants have enquired about eligibility of geothermal in regard to Appendix B: 'energy upgrades using fuels other than electricity and solar thermal'.

As geothermal is not a fuel type but rather is a heat source (such as air or water for a heat pump), this would not be excluded by this point. We note that there is no other grant guideline item that excludes a project from eligibility if it uses geothermal as a heat source.
 

3. Is bioenergy (biogas / biomethane / biomass) an eligible activity?

 

While the above may be worthwhile energy efficiency projects/activities, we note that Appendix B – Ineligible expenditure in the CUEF Guidelines would exclude these in that it outlines:

“Examples of ineligible expenditure include:

  • energy upgrades using fuels other than electricity and solar thermal

  • gas and other fossil fuel efficiency projects …”

 

4. Considering a part of the selection criteria is community action, would they fund some sort of comms towards the community. We’re looking to do an electrification mural, to drive people towards electrification and guide them towards our material available such as energy efficiency toolkits, induction cooktops, etc.

As it is the Committee’s role to assess the merit of applications found to be eligible during merit assessment phase, it is difficult to answer this question with any certainty or specificity. It is correct that the Guidelines identify sharing knowledge as a component of the project, however the overall focus of the program is (as per Section 2) “…to co-fund energy efficiency and electrification upgrades for local governments to deliver reduced energy bills and emissions from local government owned and/or operated facilities”.  The objectives of the program are to support:

  1. “the Government’s broader efforts to reduce emissions and improve energy performance and contribute to Australia meeting its emission reduction targets of 43 percent by 2030, Net-Zero emissions by 2050 and 82% renewable electricity generation by 2030

  2. local governments to decarbonise their operations and reduce energy bills through energy efficiency and load flexibility upgrades and electrification of their facilities

  3. the improvement in energy performance necessary to more easily utilise renewable electricity and improve system reliability.”

 

As per Section 5.1 – Eligible activities: “To be eligible your project must:

  • be aimed at meeting the objectives of the grant opportunity, as outlined in Section 2.

  • have at least $50,000 in eligible expenditure

  • be aimed at energy efficiency and/or electrification and/or load flexibility upgrades that reduce costs and emissions for local government’s facilities or operations using commercially available technologies.

 

Eligible activities must directly relate to the project and may include one or more of the following:

  • load flexibility/demand management systems, e.g. air-conditioning controls upgrades including demand management capabilities at a civic centre

  • electrification upgrades, e.g. the replacement of a gas boiler with a heat pump and heat recovery at an aquatic centre

  • electric vehicle charging infrastructure, e.g. smart electric vehicle charging for multiple vehicles at a depot for local government vehicles

  • energy efficiency upgrades, e.g. variable speed drives fitted to electric motors at a wastewater treatment plant

  • behind the meter renewables generation and storage, e.g. a rooftop solar power system with a virtual power plant enabled energy storage system at a childcare centre.”

 
You are correct in noticing that Section 4.2 – Additional eligibility requirements requires applicants to: “…declare that you will share your knowledge and learnings with other local governments and similar commercial facilities during and at the completion of your project, including the completion of a proforma case study…”.  This knowledge-sharing aspect feeds into intended outcomes of the program, such as:

  • “improved capability of local governments and the wider community to implement energy upgrades and electrification projects in their facilities. …

  • improved workforce skills in delivering and operating energy transition projects …”.

 
Additionally, Section 6.2 – Assessment criterion 2 appears to draw on this aspect, asking applicants to demonstrate the ‘wider impact of the grant funding’ (weighted at 20 out of total 100 points), through identifying:

  • “how your project builds the capability and skills of local governments and the wider community to undertake energy upgrades. For example, implementing projects not typically undertaken by local governments in your region/situation due to unfamiliarity/perceived risk, and in so doing providing an example that can be followed by others

  • explaining how you intend to share your knowledge from the project for local government and community benefit.”

 
Section 6.1 - Assessment criterion 1, however, focuses on how the project “…will reduce local government greenhouse gas emissions and/or provide load flexibility”, (with a 30 out of 100 total weighting). The criterion requires:

  • explanation of how impactful projects will be in regard to energy efficiency, load flexibility, electrification and/or emission reductions;

  • explanation of how local government’s operational costs will be reduced longer term; and

  • a completed Abatement Calculator (mandatory attachment), capturing the calculated energy savings, emissions reductions and load flexibility capacity that your project will achieve.


Section 6 also states that: “We will only award funding applications that score at least 50 per cent against each assessment criterion.”  - NOTE: all 4 assessment criteria.
 
Importantly:

  • it must be noted that a mural project in isolation would offer no specific ‘calculated energy savings, emissions reductions and load flexibility capacity’ that could be derived, with which to populate the Abatement Calculator. This would mean that a mural project alone may be assessed poorly against this criterion.

  • A.9 – Other eligible expenditure does state that the following may be eligible:

    • “…knowledge sharing sessions and production of educational materials that directly relate to eligible project activities …

    • staff training that directly supports the achievement of project outcomes …”.
       

  • Appendix B – Ineligible expenditure states the following as ineligible expenditure: “expenditure that does not relate to the upgrade of existing energy infrastructure, e.g. installing a heating system at an unheated aquatic centre”.

  • It further notes: “The program delegate may impose limitations or exclude expenditure, or further include some ineligible expenditure listed in these guidelines in a grant agreement or otherwise by notice to you.”  

 

While specific knowledge-sharing activities in terms of murals are not addressed in the Guidelines, all of the above must be considered in regard to your question. Furthermore, the Guidelines should be read in full to ensure that all mandatory, eligibility and other requirements are met to support a strong, eligible application to be submitted.  
 

 

5. Can the investigation work (Feasibility studies) completed prior be rolled into the project fees?

The Guidelines in Section 5.2 confirm that, to be eligible:

  • expenditure must be incurred “between the project start and end date”, and,

  • “You must not commence your project until you execute a grant agreement with the Commonwealth.”   This means the answer to the above question would be no.

Section 6 - The assessment criteria of the Guidelines, however, states the following:

  • “…The amount of detail and supporting evidence you provide in your application should be relative to the project size, complexity and grant amount requested.

  • You should provide evidence to support your answers. …We will only award funding applications that score at least 50 per cent against each assessment criterion. …”

Any energy audits/feasibility studies/other evidence or documentation which directly relates to your proposed project could therefore potentially be attached and referred to in your criteria responses (where relevant) to help support your claims. Please read Section 7.2 - Attachments to the application in full to ensure all requirements regarding mandatory attachments/support materials are correctly followed.

APPLICATIONS/PROCESS

6. How many months / years of energy bills are required to be submitted?

Section 7.2 - Attachments to the application of the Guidelines state you must provide “recent electricity, gas and/or fuel bill/s relevant to the proposed activities” to your application, however no particular timelines have been specified.

Section 6 – The assessment criteria states that: “The amount of detail and supporting evidence you provide in your application should be relative to the project size, complexity and grant amount requested.”
Keep in mind also that these are considered by the Committee,:

  • as evidence that support your application’s claims and your responses to the assessment criteria, and your (mandatory) Abatement Calculator’s information;

  • in relation to assessment criterion 1

in regard to the objectives and intended outcomes of the program (as per Section 2).

7. Is there a verification process associated with the implementation of the upgrade to understand and verify the achieved savings/success versus the proposed savings of the project for others to learn from in future?

Project records, reporting and support evidence will be required to help verify both your application’s claims, as well as your resulting project outcomes.
 
Please refer to the following key items/templates under the Key Documents section on the business.gov.au webpage for the CEUF program:

  • the Abatement Calculator - This is a mandatory attachment to BOTH your application and your final End of Project Report (upon project completion), enabling a comparison your proposed and actual outcomes. In both cases applicants are making a declaration to the Commonwealth and must provide support evidence as additional verification.

  • the proforma case study must also be completed and submitted with your End of Project Report via the grant portal.

  • the sample grant agreement, which includes (in Schedule 2) the templates for both Progress Reports and the End of Project Report.

 
NOTE: If successful, you will also be required to submit Progress Reports, evidence of expenditure and other documentation to demonstrate sufficient progress on your project and to verify eligible expenditure, as agreed in your grant agreement. The grant will be paid in instalments, and will be based on actual expenditure. Please refer to the Grant Opportunity Guidelines in Sections 12.2 – Reporting, 12.2.1 – Progress Reports, and 12.2.3 – End of Project Report, for further information.

8. How developed does the business case need to be? Concept/Detailed, or ??

It is difficult to answer this question with any specificity, however the following are key sections from the grant Guidelines which assist in ascertaining the level of information and detail required.
 
Section 7.1 – Attachments to the application outlines all mandatory attachments which include:

  • a project plan including a detailed project budget, planning, timeframes, implementation methodology, project risk assessments or reports and risk mitigation (in particular technical risks such as technology selection, installation quality, electrical capacity and connection constraints)

  • detailed evidence that supports assessment criteria responses (where applicable). This could include energy audits, feasibility studies or other technical documentation as relevant to the proposed activities

  • letter of support from each project partner (where applicable) – Required for Joint (consortia) applications

  • recent electricity, gas and/or fuel bill/s relevant to the proposed activities

  • completed abatement calculator – this is available on the business.gov.au webpage for the CEUF program.

 
Please refer to the Guidelines for the specific requirements and inclusions of your Project Plan, which are outlined in BOTH:

  • Section 6.3 – Assessment Criterion 3; and

  • Section 7.1 – Attachments to the application.

 

The Committee will assess your Project Plan as part of Assessment Criterion 3, weighted at 30 points (out of a total 100 points) in gauging the merit of your application.

As per Section 6 – The assessment criteria of the Guidelines:

  • “The amount of detail and supporting evidence you provide in your application should be relative to the project size, complexity and grant amount requested. You should provide evidence to support your answers…” to the assessment criteria in your application.

  •  “We will only award funding applications that score at least 50 per cent against each assessment criterion.”

 
Please also refer to the Abatement Calculator (see link above), ensuring to read all Notes, Instructions, Footnotes, the Checklist and all provided project Examples across all 3 tabs, as this template provides a good indication of the level of detail you will need to complete it and to inform your project proposal.

 

Note that you will also require your recent fuel/energy bills along with project proposal details/documentation to input your project data into the Abatement Calculator template. 
 

9. If a relatively detailed concept was completed, with high level emissions reductions, and scope clearly identifiable, is this enough?  Assuming of course detailed design and implementation can be completed in time for the funding window.

Could you please rephrase the question or provide further detail as the question is somewhat unclear? There are numerous requirements outlined in the Guidelines, some of which relate to eligibility, others to mandatory attachments (such as the mandatory Abatement calculator) and more, therefore it is critical that Guidelines are read in full before submitting an application. Furthermore, there are specific requirements your Project Plan must meet, please refer to:

  • Section 6.3 – Assessment Criterion 3; and

  • Section 7.1 – Attachments to the application.

 
In saying this, please also note that Section 6 – The Assessment Criterion states:

  • “The amount of detail and supporting evidence you provide in your application should be relative to the project size, complexity and grant amount requested. You should provide evidence to support your answers. …” .

  • “We will only award funding applications that score at least 50 per cent against each assessment criterion.”  

 

10. Funding approved is to be final on application? The costing assessments for complete project implementation may be of various class costing levels so should be an estimate and assigned on the 50% nature of the application. What accuracy on costs need to be applied at the application? Also if overestimated, is there a process for declaring costs spent?

 

It is recommended that you undertake planning and consultation to inform your project budget and a detailed project plan, as the Guidelines note that this is required in Section 7.1 – Attachments to the application:

 

“You must provide the following documents with your application:

  • a project plan including a detailed project budget, planning, timeframes, implementation methodology, project risk assessments or reports and risk mitigation (in particular technical risks such as technology selection, installation quality, electrical capacity and connection constraints)

  • detailed evidence that supports assessment criteria responses (where applicable). This could include energy audits, feasibility studies or other technical documentation as relevant to the proposed activities

  • letter of support from each project partner (where applicable)

  • recent electricity, gas and/or fuel bill/s relevant to the proposed activities

  • completed abatement calculator (available on business.gov.au).”


Please also refer to Section A.1 – Attachments to the application:  
“If your application is successful, we may ask you to verify the project budget that you provided in your application when we negotiate your grant agreement. You may need to provide evidence such as quotes for major costs.

The grant agreement will include details of the evidence you may need to provide when you achieve certain milestones in your project. This may include evidence related to eligible expenditure. If requested, you will need to provide the agreed evidence along with your progress reports.

You must keep payment records of all eligible expenditure, and be able to explain how the costs relate to the agreed project activities. At any time, we may ask you to provide records of the expenditure you have paid. If you do not provide these records when requested, the expense may not qualify as eligible expenditure. At the end of the project, you may be required to provide an independent financial audit of all eligible expenditure from the project.”
 
Section 10.3 – How we pay the grant:  “The grant agreement will state the:

  • maximum grant amount we will pay

  • proportion of eligible expenditure covered by the grant (grant percentage)

  • any financial contribution provided by you or a third party.

We will not exceed the maximum grant amount under any circumstances. If you incur extra costs, you must meet them yourself.  We will make payments according to an agreed schedule set out in the grant agreement. Payments are subject to satisfactory progress on the project.

We set aside 10 per cent of the total grant funding for the final payment. We will pay this when you submit a satisfactory end of project report demonstrating you have completed outstanding obligations for the project.

We may need to adjust your progress payments to align with available program funds across financial years and/or to ensure we retain a minimum 10 per cent of grant funding for the final payment.”
 
IMPORTANT:

  • Please ensure that the Budget section in your application form contains ONLY expenditure which is deemed eligible under the Grant Guidelines.

  • If you are awarded a CEUF grant, and later find that your budget varies very significantly, you may have impacts to the grant amount you are eligible for.  For example, if your project costs significantly less to deliver than anticipated and budgeted for, OR should a large amount of your expenditure thought to be eligible actually be found to be ineligible at any point (e.g. upon review of your Progress Report’s expenditure evidence), then the total grant amount will reduce in line with this reduction in eligible expenditure. 

 

This is because the Grant Guidelines (Section 3.1) state that:  

“The grant amount will be up to 50 per cent of eligible expenditure. Contributions to your project must be cash. You are responsible for the remaining eligible and ineligible project costs.”
 
Please also see Section 12.4 – Grant agreement variations: 

“We recognise that unexpected events may affect project progress. In these circumstances, you can request a variation to your grant agreement, including:

  • changing project milestones

  • extending the timeframe for completing the project but within the maximum time period allowed in program guidelines

  • changing project activities.

The program does not allow for an increase of grant funds.

If you want to propose changes to the grant agreement, you must put them in writing before the project end date. You can submit a variation request via our online portal.

If a delay in the project causes milestone achievement and payment dates to move to a different financial year, you will need a variation to the grant agreement. We can only move funds between financial years if there is enough program funding in the relevant year to allow for the revised payment schedule. If we cannot move the funds, you may lose some grant funding.

You should not assume that a variation request will be successful. We will consider your request based on factors such as:

  • how it affects the project outcome

  • consistency with the program policy objective, grant opportunity guidelines and any relevant policies of the department

  • changes to the timing of grant payments

  • availability of program funds.”

ASSESSMENTS

11. How will contingency costs be handled within the grant and what is the maximum allowable contingency?

 
Contingency costs can only form up to 10% of your budget’s total eligible expenditure amount. If you enter a higher proportion into your budget in the application form, the auto-calculation budget tool will show an error and prevent you from proceeding with your submission.

NOTE: The maximum grant that can be applied for is $2.5M for a project with $5M+ eligible expenditure (as grant funding cannot be more than 50% of total eligible expenditure).
 
Please refer to Guidelines Section A.9 – Other eligible expenditure: 
“Other eligible expenditures for the project may include:

  • building modifications where you own the modified asset and the modification is required to undertake the project

  • purchase, hire or lease of equipment required to undertake eligible project activities

  • knowledge sharing sessions and production of educational materials that directly relate to eligible project activities

  • staff training that directly supports the achievement of project outcomes

  • financial auditing of project expenditure, the cost of an independent audit of project expenditure (where we request one) up to a maximum of 1 per cent of total eligible project expenditure

  • costs you incur in order to obtain planning, environmental or other regulatory approvals during the project period. However, associated fees paid to the Commonwealth, state, territory and local governments are not eligible

  • domestic travel, including flights and ground transportation, limited to the reasonable cost of travel and accommodation required to conduct eligible project activities

  • contingency costs up to a maximum of 10 per cent of the eligible project costs. Note that we make payments based on actual costs incurred.

Other specific expenditures may be eligible as determined by the program delegate. Evidence you need to supply can include supplier contracts, purchase orders, invoices and supplier confirmation of payments.”
 

12. Is the cost indicator used for judging capital cost, cost paid by govt towards the project, max amount govt will contribute? 

Could you please rephrase the above question, providing more detail and/or examples? We are unclear on what the question is.

13. What is the timeframe of the ghg basis - 1 year, lifetime?  If multiple years and diff location should diff GH factors be used?

Multiple upgrade activities (or smaller projects) spanning across multiple sites/locations can be incorporated into one single overarching application. For completing the Abatement Calculator, complete a separate table for each activity that is part of your project.

 

For completing 'Proposed annual energy use' in the abatement calculator - Please provide your best estimate of annual energy use after the energy upgrade. Supporting information, explaining the data, such as timeframes of the ‘Proposed annual energy use’ can be included to give context to the figures. As per the guidelines Section 6, the amount of detail and supporting evidence you provide in your grant application should be relative to the project size, complexity and grant amount requested.  

 

The calculator uses fixed emissions factors for the specified fuel types. The Abatement Calculator specifies that:

‘The national emission factor in 2030 is being used to calculate emission reductions. This is an attempt to create a level playing field for local governments from around Australia and also reflects the declining emission factor as our electricity grid becomes increasingly powered by renewables. 2030 is expected to be less than half way through the life of projects implemented through the Fund. Abatement is calculated for a single reference year (2030), rather than estimating project lifetimes.’

14. Baseline energy data could be affected by weather, usage, operating hours in period over which monitoring/billing data was collected - how might this impact on estimation of ghg reductions?

You will need to use your recent gas, electricity and/or fuel bills (as relevant to the proposed upgrades) and the details of your actual project, to help you complete the abatement calculator.

 

We recognise that various factors affect the "Existing annal energy use" section of the calculator. Applicants can include extra background information on the data (such as weather, usage, operating hours in period over which monitoring/billing data was collected etc.).  As per the guidelines Section 6, the amount of detail and supporting evidence you provide in your grant application should be relative to the project size, complexity and grant amount requested.

 

Grant applicants should provide the information specified in the grant opportunity guidelines and the abatement calculator. Refer to Guidelines Section 7.1 – Attachments to the application:

  • detailed evidence that supports assessment criteria responses (where applicable). This could include energy audits, feasibility studies or other technical documentation as relevant to the proposed activities

  • recent electricity, gas and/or fuel bill/s relevant to the proposed activities.

15. For modular equipment or replication of proven approach - can data from other sites or modelling based on independent testing be accepted? 

It is difficult to answer this question without further context - can it be accepted for / as what?  If the question relates to the provision of evidence to support your responses to the assessment criteria, please note:

  • Section 6 - The assessment criteria of the Guidelines says “…The amount of detail and supporting evidence you provide in your application should be relative to the project size, complexity and grant amount requested.

    You should provide evidence to support your answers.”

    If the above is in regard to populating the Abatement Calculator template with data that doesn’t directly relate to your project/facility, please refer to the ‘Abatement Calculator’ (available on the business.gov.au webpage for the CEUF program

    NOTE: this is a mandatory attachment that must be completed with your project’s data and attached to your application. If you wish to further clarify, please reply email with further information and/or questions.

 

16. Can existing solar generation be captured in the Energy Calculator? From the DCCEEW demo, it looks like there’s a column for proposed generation, but not existing on-site generation

The Abatement Calculator does not capture this specifically as, more commonly, it is anticipated that CEUF applications will propose moving from zero generation to solar generation options (where energy generation is relevant to projects).

This can be addressed within your application and/or within the detail of your Project Plan, however it is acknowledged that this will then not be reflected within the calculations of energy savings (i.e. the $ per tonne of abatement achieved through your proposed project).

We also note, however, that load flexibility also is not captured within the above energy savings calculations, however this will still be considered upon the Committee’s review of the Abatement Calculator and in determining the merit and impact of projects as per their application.
 

17. For a battery activity, can real time GHG emission factors be used to show the GHG reduction?  Ie a battery charging in the middle of the day.

Please refer to the Abatement Calculator template (which is a mandatory attachment to all CEUF applications – please find this available on the business.gov.au webpage for the CEUF program):
 
On the 3rd tab named ‘Abatement Calculator’, Footnote 3 (under the ‘Notes’ section) says:

  • “The national emission factor in 2030 is being used to calculate emission reductions. This is an attempt to create a level playing field for local governments from around Australia and also reflects the declining emission factor as our electricity grid becomes increasingly powered by renewables. 2030 is expected to be less than half way through the life of projects implemented through the Fund. Abatement is calculated for a single reference year (2030), rather than estimating project lifetimes. “

  • “For emissions projections see: Table 46 (page 101) 'Indirect scope 2 and 3 combined emissions factors in the baseline scenario, tonnes CO₂-e per MWh' in https://www.dcceew.gov.au/climate-change/publications/australias-emissions-projections-2023

  • “For emissions factors for each fuel type see: https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-accounts-factors-2023. The calculator uses a combination of scope 1 and scope 3 emissions, referencing the Australian National Greenhouse Accounts Factors Feb 2023 (NB the scope 3 emissions factor for natural gas is a national estimate). To simplify the calculation, the LPG and natural gas emissions factors have been converted from KgCO2e/GJ to KgCO2e/MJ to match other units in the calculator.”

 
Additionally, Footnote 5 (under the ‘Notes’ section) says:

  • “Load flexibility will be assessed by taking into consideration the type of flexibility and benefits provided such as capacity, duration, control and compatibility with network orchestration. Load flexibility is defined as managing electricity demand at a site in response to generation, network, or market signals.”

Where load flexibility is achieved through delivery of a proposed CEUF project, the details should be entered into the bottom section of the relevant Activity Table. It is noted that some projects may consist of load flexibility alone.

These aspects will however still be considered by the Committee during their review of Abatement Calculators in determining project merit and impact.

If you have further questions about the CEUF funding, email the team directly at CEUF@industry.gov.au

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