EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 119
Issued by the Authority of the Minister for Resources and Energy
Energy Efficiency Opportunities Act 2006
Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1)
The Energy Efficiency Opportunities Act 2006 (the Act) establishes the Energy Efficiency Opportunities program. The Act requires energy efficiency opportunities assessments and public reporting of outcomes by large energy using businesses.
Section 41 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the Regulations is to extend the period of the current exemption of corporations or subsidiaries of controlling corporations whose main business is the generation of electricity, or the transmission and distribution of either or both of natural gas and electricity, and for which the total of energy used in activities outside these categories does not exceed 0.5 petajoules per year. The Energy Efficiency Opportunities measure was developed to apply to industrial energy end use sectors, and energy supply businesses have been exempted since the commencement of the legislation to allow review of how energy efficiency may most effectively be improved in these sectors.
A review of the current exemption has been undertaken, including public consultations in November 2008 and March 2009. Submissions received from both these consultations strongly supported continuation of the current exemption. The review also examined these industry sectors, and how they are affected by broader climate change policy and environmental and market regulatory environments. The extension of the exemption will allow time for broader climate change measures to be implemented and evidence to become available on their effectiveness in encouraging energy efficiency improvement in the energy supply industry. The extension will avoid additional regulatory burden at a time when significant regulatory change is anticipated. It will also allow time for a full review of the Energy Efficiency Opportunities Program to be undertaken.
The effect of the amendments is to maintain the status quo for four years beyond the current expiry date for these businesses, until the end of 30 June 2013.
Details of the Regulations are set out in the Attachment.
The Regulations will commence on the day after they are registered.
ATTACHMENT
Details of the Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1)
Regulation 1 – Name of Regulations
Regulation 1 provides that the name of the Regulations is the Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1).
Regulation 2 – Commencement
Regulation 2 provides that the Regulations commence on the day after they are registered.
Regulation 3 – Amendment of Energy Efficiency Opportunities Regulations 2006
Regulation 3 provides that Schedule 1 amends the Energy Efficiency Opportunities Regulations 2006 (the Principal Regulations).
Schedule 1 – Amendments
Item [1] – Regulation 2.1(3), regulation cessation date
This item amends the date that regulation 2.1 ceases to have effect, so that the current exemption from obligations under the Act for holding corporations whose main business is in electricity generation, or electricity or natural gas transmission or distribution, as described in regulation 2.1, does not expire at the end of 30 June 2009 but instead expires at the end of 30 June 2013. This maintains the existing status of the affected corporations for a further four years.
Item [2] – Regulation 2.2(3), regulation cessation date
This item amends the date that regulation 2.2 ceases to have effect, so that the current exemption from obligations under the Act for subsidiaries of controlling corporations whose main business is in electricity generation, or electricity or natural gas transmission or distribution, as described in regulation 2.2, does not expire at the end of 30 June 2009 but instead expires at the end of 30 June 2013. This maintains the existing status of the affected subsidiaries for a further four years.
Overview
The Energy Efficiency Opportunities Act 2006 was enacted to establish a program aimed at improving energy efficiency among large energy-consuming businesses in Australia. The primary objective of the Act is to mandate energy efficiency opportunities assessments and the public reporting of these assessments' outcomes by significant energy users. The legislation was introduced to address the need for systematic evaluation and disclosure of energy efficiency measures, aiming to reduce energy consumption and environmental impact. The Act empowers the Governor-General to create regulations that are necessary or convenient to implement the Act's provisions. The Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1) were subsequently introduced to extend the exemption period for certain corporations and their subsidiaries involved in electricity generation and the transmission and distribution of natural gas and electricity, provided their energy use outside these activities does not exceed 0.5 petajoules per year. This extension aims to provide additional time for broader climate change measures to be implemented and for a comprehensive review of the Energy Efficiency Opportunities Program to be conducted.
Scope and Application
The Energy Efficiency Opportunities Act 2006 applies to large energy-using businesses with the aim of establishing the Energy Efficiency Opportunities program. This legislation mandates that these businesses conduct energy efficiency opportunities assessments and report the outcomes publicly. It does not apply to corporations or subsidiaries of controlling corporations whose primary business involves the generation of electricity, or the transmission and distribution of natural gas and electricity, provided their total energy usage outside these categories does not surpass 0.5 petajoules per year. This exemption, which was initially set to expire on 30 June 2009, has been extended until 30 June 2013 through the Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1). This extension was enacted to allow further evaluation of how energy efficiency can be most effectively enhanced within the energy supply industry, considering broader climate change policies and regulatory environments. The Act extends across the Commonwealth of Australia, and its application is further defined and potentially extended through subordinate instruments such as these regulations.
Key Provisions
The Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1) extend the current exemption for certain corporations and their subsidiaries from the obligations under the Energy Efficiency Opportunities Act 2006. Specifically, corporations or subsidiaries whose primary business involves the generation of electricity or the transmission and distribution of natural gas and electricity, and which use less than 0.5 petajoules of energy in activities outside these categories per year, are exempt from the Act's requirements (Regulation 2.1(3) and Regulation 2.2(3)). This exemption is extended until 30 June 2013, providing these entities with a four-year extension from the original expiry date of 30 June 2009 (Schedule 1, Items [1] and [2]).
These Regulations impose obligations on affected entities to ensure they maintain their current status by adhering to the specified energy usage limits. They are required to continue using less than 0.5 petajoules of energy annually in activities outside the specified electricity generation and transmission/distribution sectors. Any entity that exceeds this threshold would then be subject to the Act's obligations, including the requirement to undertake energy efficiency opportunities assessments and report publicly on the outcomes.
Failure to comply with the exemptions as outlined in the Regulations could result in entities being subject to the obligations of the Energy Efficiency Opportunities Act 2006. This could lead to a range of consequences, including the necessity to conduct energy efficiency assessments and report on the outcomes. While the Regulations themselves do not specify penalties for non-compliance, the Act includes provisions for penalties that could be applied. These penalties may include fines and other civil or criminal sanctions, depending on the nature and severity of the breach. The specific penalties would be determined in accordance with the provisions of the Act and any relevant legislation governing enforcement and penalties.