EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 218
Issued by Authority of the Assistant Minister for the Environment and Water Resources
Renewable Energy (Electricity) Act 2000
Renewable Energy (Electricity) Amendment Regulations 2007 (No. 1)
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 list additional solar water heater models, and their corresponding eligibility for renewable energy certificates, for the purposes of the Act. The list of eligible solar water heaters was last updated in December 2006.
Details of the Regulations are set out in Attachment A.
The Amendment Regulations allow for the addition of new solar water heaters and removal of obsolete systems from Schedule 7. Schedule 7 to the Principal Regulations is amended approximately every six months and the amendments are machinery in nature and do not substantially alter the existing operation of the Principal Regulations. Consequently a public consultation period was not conducted for the Amendment Regulations.
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 2007 (No. 1)
Regulation 1 - Name of Regulations
This provides that the name of the Regulations is the Renewable Energy (Electricity) Amendment Regulations 2007 (No. 1).
Regulation 2 - Commencement
The 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
Item 1 – Schedule 7, Part 2A and 2B
This item amends Part 2A and 2B of Schedule 7 which relates to solar water heaters, by:
- inserting additional solar water heater models that have become eligible for renewable energy certificates under the regulations since Parts 2A and 2B of Schedule 7 were last revised on 13 December 2006;
- revising renewable energy certificate calculations for existing eligible solar water heater models that have changed since last revised on 13 December 2006; and
- deleting those solar water heater models for which eligibility has lapsed.
Overview
The Renewable Energy (Electricity) Amendment Regulations 2007 (No. 1) were introduced by the Australian Government to update the eligibility criteria for renewable energy certificates under the Renewable Energy (Electricity) Act 2000. Enacted by the Governor-General under section 161 of the Act, these regulations aimed to address the need for periodic updates to the list of eligible solar water heater models in the Renewable Energy (Electricity) Regulations 2001. This legislative instrument ensures that the renewable energy target is met effectively by keeping the regulatory framework current with technological advancements in renewable energy systems. The policy objective is to facilitate the transition towards a more sustainable energy sector by incentivising the adoption of renewable energy technologies through the trading of renewable energy certificates. The Amendment Regulations were not subject to public consultation as they were considered to be of a machinery nature and did not substantially alter the existing operation of the Principal Regulations.
Scope and Application
The Renewable Energy (Electricity) Act 2000 and its associated regulations, including the Renewable Energy (Electricity) Amendment Regulations 2007 (No. 1), establish a legislative framework aimed at increasing the proportion of electricity generated from renewable sources in Australia, through the implementation of a mandatory renewable energy target. The Act applies to wholesale purchasers of electricity, requiring them to meet a proportion of the target in line with their share of the national wholesale electricity market. This requirement is facilitated by the creation and trading of renewable energy certificates, which are generated by renewable energy producers and must be surrendered by the liable parties or result in penalty payments. The Act's reach is national, applying across all states and territories in Australia. The Amendment Regulations, which are instrumental in updating the list of eligible solar water heater models for the generation of renewable energy certificates, do not impose any new substantive obligations but rather ensure that the regulatory framework remains current and effective. The eligibility for certificates under the updated regulations is backdated to the date of certification against Australian Standard 2712:2002, ensuring that manufacturers are not disadvantaged by delays in updating the regulatory list. The regulations are designed to be administrative in nature, with changes to eligibility criteria and calculations occurring approximately every six months without requiring a public consultation due to their non-substantive character.
Key Provisions
The Renewable Energy (Electricity) Amendment Regulations 2007 (No. 1) amend the Renewable Energy (Electricity) Regulations 2001, updating the list of solar water heater models eligible for renewable energy certificates (Regulation 3). This update includes the addition of new models, adjustments to calculations for existing models, and the removal of outdated ones (Schedule 1, Item 1). These amendments ensure that the regulations reflect the most current technology and eligibility criteria for renewable energy certificates. The eligibility for the newly listed solar water heater models is backdated to the date of certification to Australian Standard 2712:2002, allowing manufacturers to benefit from past sales despite the delay in updating the regulations (Attachment A).
The Renewable Energy (Electricity) Amendment Regulations 2007 (No. 1) impose specific obligations on liable parties, such as wholesale purchasers of electricity, to meet a share of the mandatory renewable energy target in proportion to their market share (Section 161). These parties must acquire renewable energy certificates, which represent one megawatt hour of electricity generated from renewable sources, and either surrender them to the Renewable Energy Regulator or pay a penalty if they fail to do so. Generators of renewable energy are responsible for creating and registering these certificates. Additionally, the regulations outline the administrative framework for power station accreditation, eligibility of fuel sources, and methods for calculating the number of renewable energy certificates (Renewable Energy (Electricity) Regulations 2001).
Violations of the Renewable Energy (Electricity) Act 2000 and its regulations can result in significant penalties. Liable parties failing to meet their renewable energy obligations may be subject to financial penalties as stipulated in the Act (Section 161). The exact penalties are not specified within the explanatory statement but would be detailed in the primary Act and associated regulations. Furthermore, non-compliance with the administrative and operational requirements set forth in the regulations could also lead to enforcement actions by the Renewable Energy Regulator, potentially including fines or other legal repercussions. The backdating of eligibility for renewable energy certificates, while providing benefits to manufacturers, is clarified to have no retrospective effect, ensuring that the regulations do not apply to actions taken before their official commencement (Attachment B).