EXPLANATORY STATEMENT

Issued by the Authority of the Minister for the Environment and Heritage

Renewable Energy (Electricity) Amendment Act 2006

Proclamation

Subsection 2(1) of the Renewable Energy (Electricity) Amendment Act 2006 (the Amending Act) provides that Schedule 1 to that Act commences on a day to be fixed by proclamation.  However, if any of the provisions in Schedule 1 do not commence within six months of the date that Act receives Royal Assent, then those provisions will commence on the first day after the end of that six month period.  The Amending Act received Royal Assent on 30 June 2006. 

The purpose of the Proclamation is to fix 11 September 2006 as the day on which Schedule 1 to the Amending Act commences. 

The Amending Act implements the Government’s agreed response to a 2003 review of the Renewable Energy (Electricity) Act 2000 (the Act).  Schedule 1 contains the main operative provisions of the Amending Act.

The Act establishes a scheme to encourage additional electricity generation from eligible renewable energy sources. This is known as the Mandatory Renewable Energy Target scheme.  The scheme creates a guaranteed market for an additional 9,500 gigawatt hours of renewables-based electricity by 2010. 

The Government has agreed to enhance market transparency and improve business certainty, provide increased opportunities for solar and bioenergy technologies, and improve the operational effectiveness and efficiency of the Act. 

The Amending Act implemented the improvements by:

• allowing for potential new market operators and recent reforms in the National Electricity Market;
• setting time-limits for the creation of renewable energy certificates and providing the opportunity to voluntarily surrender certificates;
• providing for provisional accreditation of proposed generation projects, establishing timeframes for determining the eligibility of proposed projects by the Renewable Energy Regulator and clarifying the components of a power station;
• allowing for the publication of additional data on baselines and renewable electricity generation;
• clarifying the provisions and definitions in the Act for Eligible Renewable Energy Sources and providing increased opportunities for bioenergy;
• clarifying the provisions with respect to the claiming of renewable energy certificates associated with solar water heaters and small generation units;
• clarifying the provisions in relation to the eligibility of solar water heaters and expediting the process by which certificates can be claimed for new solar water heater models as they become commercially available;
• clarifying the provisions in relation to a relevant acquisition of electricity to ensure that only one entity is made liable in relation to the purchase of a particular quantum of electricity;
• providing the Renewable Energy Regulator with the power to vary a number of assessments and determinations under the Act, including varying the energy acquisition statement, renewable energy shortfall statement and the 1997 eligible renewable energy baselines for accredited power stations;
• providing the Renewable Energy Regulator with information gathering powers to enable the effective monitoring and compliance with the provisions of the legislation; and
• allowing for the suspension of an accredited power station under a number of circumstances including where gaming is suspected; that is, whereby power station outputs are manipulated to increase the number of renewable energy certificates that can be created without increasing renewable energy generation.

In addition to the above improvements, the Amending Act also removed a requirement to expose new or amended regulations to a 30 day public consultation process.  Removing this requirement will enhance administration of the measure. 

Considerable consultation on amending the Act has taken place through inquiries by the Senate Environment, Communications, Information Technology and the Arts Legislation Committee in 2002 and 2006 and the Tambling Review in 2003.  Additional consultations with key stakeholders have been held during the development and passage of the Amending Act.   Consultation was unnecessary for the Proclamation as this instrument is of a machinery nature only.

Further detail on specific clauses in the Amending Act is available in the Revised Explanatory Memorandum to the Renewable Energy Electricity Amendment Bill 2006.

The commencement date was chosen to allow for the commencement of the main operative provisions of the Amending Act and the making of regulations under the Act prior to the commencement of new electricity market arrangements in Western Australia on 21 September 2006.

The Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.