Overview

The Renewable Energy (Electricity) Amendment Regulations 2005 (No. 1) were enacted under the Renewable Energy (Electricity) Act 2000, providing a legislative framework to implement the Government’s mandatory renewable energy target. The objective was to increase the amount of electricity generated from renewable sources in Australia, aiming to reach an additional 9,500 Giga Watt hours (GWh) by 2010, contributing around 12 percent to the nation’s electricity supply. This was achieved by requiring wholesale purchasers of electricity, known as liable parties, to meet a share of the target proportional to their market share. The regulations specify the Renewable Power Percentage (RPP) for 2005, which is integral in calculating the number of renewable energy certificates that liable parties must surrender to the Renewable Energy Regulator. The RPP for 2005 was set at 1.64 percent, aligning with the legislative requirement to specify this percentage by 31 March of the relevant year, taking into consideration factors such as the required amount of renewable electricity and historical data on renewable energy acquisition.

Scope and Application

The Renewable Energy (Electricity) Act 2000 applies to wholesale purchasers of electricity, referred to as "liable parties," who are obligated to meet a proportion of the government's mandatory renewable energy target in line with their share of the national wholesale electricity market. This legislation was designed to enhance the contribution of renewable energy sources to Australia's electricity supply, with a target of 12 percent by 2010. The Act facilitates the creation of renewable energy certificates by generators of renewable energy, with each Mega Watt hour of electricity generated from renewable sources equating to one certificate. These certificates are then traded and sold to liable parties, who must surrender them to the Renewable Energy Regulator or face penalties. The Act provides a structured mechanism to ensure that the renewable energy target is met through a regulated trading system of certificates. The Renewable Energy (Electricity) Amendment Regulations 2005 further detail the specifics of the Renewable Power Percentage (RPP) for the year 2005, which is instrumental in calculating the number of certificates liable parties must surrender. The Regulations, which are a legislative instrument under the Legislative Instruments Act 2003, come into effect on the day following their registration on the Federal Register of Legislative Instruments.

Key Provisions

The Renewable Energy (Electricity) Amendment Regulations 2005 (No. 1) establish the Renewable Power Percentage (RPP) for the year 2005, as required by section 39(1) of the Renewable Energy (Electricity) Act 2000 (the Act). The RPP, which is 1.64 percent, is a crucial factor in calculating the number of renewable energy certificates (RECs) that wholesale purchasers of electricity, known as liable parties, must surrender to the Renewable Energy Regulator to avoid penalties (section 39(1)). These regulations amend the Renewable Energy (Electricity) Regulations 2001, which set out the framework for the mandatory renewable energy target established by the Act. Liable parties, as defined by the Act, are required to purchase and surrender RECs to the Regulator. The number of RECs a liable party must surrender is determined by multiplying the amount of electricity they purchase by the applicable RPP. This system ensures that liable parties contribute to the government's target of increasing the proportion of electricity generated from renewable sources. Additionally, generators of renewable energy are responsible for creating RECs, with one REC representing one Mega Watt hour of electricity generated from renewable sources (section 16 of the Act). Failure to comply with the requirements of the Act and the Regulations can result in significant consequences for liable parties. If a liable party does not surrender the required number of RECs, they are subject to a penalty as outlined in section 42 of the Act. The penalty is calculated based on the shortfall in the number of RECs surrendered, with the amount being equivalent to the value of one REC for each Mega Watt hour of shortfall. This penalty serves as an incentive for liable parties to meet their obligations under the Act and contribute to the renewable energy target. Moreover, the Minister for the Environment and Heritage must consider several factors before prescribing the RPP, as required by section 39(3) of the Act. These factors include the required amount of renewable electricity for the year, the estimated amount of electricity to be acquired, and any discrepancies between the required and acquired amounts of renewable electricity from previous years. This consideration ensures that the RPP is set based on a comprehensive assessment of the renewable energy landscape, promoting fairness and accuracy in the calculation of RECs.