VEU project-based activities specifications changes commencing 20 June 2025

20 June 2025

The Department of Energy, Environment and Climate Action has released changes to the following project-based activities (PBA) specifications for the Victorian Energy Upgrades (VEU) program, which takes effect today, 20 June 2025:

• Measurement and Verification Specifications. Key changes:
  • Introduction of five new specified measurement methods, with simplified processes to streamline projects based on particular technologies, or dependency on seasonal variation.
  • Changes to the existing measurement and verification (M&V) method to streamline elements, such as expanding options for accommodating non-routine events, increased flexibility in accounting for missing or erroneous data, more practical measured energy data collection approaches, and simplified application of decay factors.
• Benchmark Rating Specifications. Key changes:
  • Introduction of forward creation of certificates for up to 10 years for projects under the benchmark rating method. This includes the introduction of a persistence model, removal of benchmark factor for annual creation and revised emissions factors.
  • Expansion of eligible NABERS premises types and NABERS performance and energy calculation tools.
  • Revised PBA timeframes to align better with NABERS methodology.

Measurement and Verification (M&V) Specifications changes

Introduction of five new specified measurement methods

The streamlined specified measurement method (SMM) project reporting pathway is expected to be enabled in future updates.

The updated M&V Specifications introduce five specified measurement methods, as alternatives to the existing Measurement and Verification method under the M&V project-based activities pathway. The specified measurement methods serve to simplify and streamline projects that meet certain criteria.

SMM 1: Weather normalised whole of site electricity measurement

Prescribes a fixed method to simplify the calculation of electricity savings for projects affected by seasonal variation (i.e. weather).

SMM 2: Weather normalised whole of site gas measurement sub-method

Prescribes a fixed method to simplify the measurement and calculation of gas savings for projects affected by seasonal variation (i.e. weather).

SMM 3: Retrofit isolation for non-seasonal motors and rotating equipment

Simplifies the energy measurement and calculation approach for retrofit isolation upgrades not affected by seasonal variation.

SMM 4: Direct measurement of solar PV

Allows projects to utilise direct measurement to determine energy savings for behind the meter solar projects.

SMM 5: Electrification direct measurement

Prescribes a retrofit isolation approach to simplify the energy savings calculations and reduce dependency on gas measurement of existing equipment.

Other M&V method changes

The updated M&V Specifications also introduce the following changes to streamline the existing M&V method and to address identified issues under the M&V method:

• Expanded options for accounting for non-routine events using prescribed statistical approaches where static factors have changed.
• Increased flexibility in accounting for missing or erroneous data with the introduction of reduced accuracy factors for specified approaches.
• Revised measured energy requirements to support practical data collection approaches where projects face modelling validity challenges.
• Simplified the way decay factors are applied for projects with multiple energy conservation measures.

Benchmark Rating (BR) Specifications changes

The BR Specifications have been updated to align the benchmark rating method more closely with the M&V method.

BR projects will now use forward creation of certificates for up to 10 years. This change will introduce a persistence model to account for declining performance over the forward creation period, and updated emissions factors to match M&V.

The updates also align the BR method more closely with the NABERS methodology, including expanding the range of premises eligible for BR projects to include the following NABERs categories:

• residential aged care
• retirement living
• warehouse and cold stores
• schools
• retail stores.

PBA timeframes have also been revised to better align with NABERS processes. The NABERS tools approved for BR baseline energy calculations have also been updated.

Updates to PBA guides and forms

We have updated the Measurement and Verification Method Activity Guide and Benchmark Rating Method Activity Guide to reflect the changes outlined above. 

We are publishing PBA forms with minor updates, which will be available on the relevant Project-based activities webpage. Further updates will be made to forms over the coming weeks.

Where to get help

If you have any questions with respect to the information set out in this update, please contact VEU support on (03) 9032 1310 or veu@esc.vic.gov.au