EXPLANATORY STATEMENT

Select Legislative Instrument 2006 No. 345

Issued by Authority of the Minister for the Environment and Heritage

Renewable Energy (Electricity) Act 2000

Renewable Energy (Electricity) Amendment Regulations 2006 (No. 4)

Section 161 of the Renewable Energy (Electricity) Act 2000 (the Act) provides, in part, that the Governor-General may make regulations prescribing all 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 Act provides the legislative framework for the implementation of the Government’s mandatory renewable energy target, announced by the Prime Minister on 20 November 1997. The mandatory renewable energy target (the target) is designed to increase the amount of electricity in Australia that is being generated from renewable energy sources. By 2010, an additional 9,500 gigawatt hours (GWh) of electricity will be required to be supplied from renewable energy sources.

Under the Act, wholesale purchasers of electricity (the ‘liable parties’) are required to meet a share of the target in proportion to their share of the national wholesale electricity market. The Act provides for the creation of renewable energy certificates by generators of renewable energy.  One renewable energy certificate represents the equivalent of one megawatt hour of electricity generated from renewable energy sources.  The renewable energy certificates, once registered, are traded and sold to the liable parties who, in turn, must surrender the renewable energy certificates to the Renewable Energy Regulator, or pay a penalty.  

The Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations) provide the administrative framework to implement the Act in relation to power station accreditation, eligibility requirements for fuel sources, and calculation methods for determining the number of renewable energy certificates that can be claimed.

The Amendment Regulations:

• allow new solar water heater models to be accredited to Australian Standard AS/NZS 2712:2002 as amended, and to be tested to AS/NZS 4692:2005 and to provide a more precise definition of the Standards applicable to systems over 700 litres (items 1 and 2);
• clarify the provisions for the creation of renewable energy certificates (RECs) that apply before and after the commencement of the Renewable Energy (Electricity) Amendment Act 2006 (the Amendment Act) (items 3 and 4) and update the wording of the provisions to reflect current drafting practices (item 5); and
• list additional solar water heater models, and their corresponding eligibility for renewable energy certificates, for the purposes of the Act (items 6 and 7).  The list of eligible solar water heaters was last updated in June 2006.

Details of the Regulations are set out in Attachment A.

For previous regulatory amendments, 30-day public consultation processes were conducted as required by subsection 161(2) of the Act.  On 11 September 2006, the Act was amended and it no longer requires a public consultation period for regulatory amendments.  The Act specifies no other conditions that need to be met before the power to make the proposed Regulations may be exercised.

It is intended that eligibility for renewable energy certificates for the new solar water heater models be backdated to the date on which certification to Australian Standard 2712:2002 was obtained.  This would prevent manufacturers being disadvantaged by the time required to update the list of eligible solar water heater models in the Principal Regulations. The benefits that the manufacturers gain from the new models being listed in the Principal Regulations would be able to be accessed for past sales, back to the date of certification against Australian Standard 2712:2002. Although the eligibility for renewable energy certificates would be backdated, the Australian Government Solicitor has advised that the Regulations would not have a retrospective effect and that subsection 12(2) of the Legislative Instruments Act 2003 would not have any application in respect of the Regulations (this advice is detailed in Attachment B).

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commenced on the day after they are registered on the Federal Register of Legislative Instruments.

Attachment A

Details of the Renewable Energy (Electricity) Amendment Regulations 2006 (No. 4)

Regulation 1 - Name of Regulations

This provides that the name of the Regulations is the Renewable Energy (Electricity) Amendment Regulations 2006 (No. 4).

Regulation 2 - Commencement

The proposed Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.

Regulation 3 - Amendment of the Renewable Energy (Electricity) Regulations 2001

This Regulation provides for Schedule 1 to amend the Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations).

Schedule 1 Amendments

Items 1 and 2 - Regulation 3A

These items recast subregulation 3(3) of the Principal Regulations as new regulation 3A to reflect current drafting practices.  Regulation 3A sets out the conditions that a device must satisfy to be a solar water heater for the purposes of subsection 5(1) of the Act.

For a device with a capacity of not more than 700 L this item updates the conditions by allowing new models to be accredited to Australian Standard 2712:2002 as amended by Standards Australia on 30 September 2005.

For a device with a capacity of greater than 700 L this item updates the conditions by requiring the device’s water storage tank to meet:

• the requirements set out in Australian Standard 1056 as amended by Standards Australia on 10 January 2000 or
• the requirements set out in Australian Standard 1056 as amended by Standards Australia on 19 September 2005; or
• the requirements set out in Australian Standard 4692:2005 as in force on 27 September 2005; or
• the requirements set out in the document called ‘Heat Loss Test Procedure for Solar Water Heaters with a Hot Water Storage Tank Greater than 630 L’, published by the Regulator on 29 May 2003.

Item 3 – Subregulation 19(2A)

This item inserts a new subregulation 19(2A) to clarify that subregulations 19(1) and 19(2) do not apply to solar water heaters installed on or after the date the date of commencement (11 September 2006) of the Amendment Act.

This clarification will serve until the commencement of Regulations that will give full effect to the Amendment Act.

Items 4  and 5 – Subregulation 19(4)

These items update the reference contained in subregulation 19(4) to the relevant subsection of the Act which has changed as a consequence of the Amendment Act and also update the wording of the paragraph 19(4)(b) to reflect current drafting practices

Item 6 – Schedule 7, Part 2A

This item amends Part 2A of Schedule 7 which relates to solar water heaters with capacities of 700 litres or less, by:

• inserting additional solar water heater models that have become eligible for renewable energy certificates under the regulations since Part 2A of Schedule 7 was last revised on 7 June 2006;
• revising renewable energy certificate calculations for existing eligible solar water heater models that have changed since last revised on 7 June 2006; and
• deleting those solar water heater models for which eligibility has lapsed.

Item 7 – Schedule 7, Part 2B

This item amends Part 2B of Schedule 7 which relates to solar water heaters with capacities of over 700 litres, by:

• inserting additional solar water heater models that have become eligible for renewable energy certificates under the regulations since Part 2B of Schedule 7 was last revised on 7 June 2006;
• revising renewable energy certificate calculations for existing eligible solar water heater models that have changed since last revised on 7 June 2006; and
• deleting those solar water heater models for which eligibility has lapsed.