OVERVIEW OF RENEWABLE ENERGY ELECTRICITY ACT

1
OVERVIEW OF RENEWABLE ENERGY (ELECTRICITY) ACT

• David Rossiter
• Regulator, Office of the Renewable Energy
  Regulator

2
2
OVERVIEW

• General Principles
• Legislative Framework
• Role of Regulator
• Renewable Energy Certificates
• Liability

3
3
GENERAL PRINCIPLES

• Obliges wholesale purchasers of electricity to
  contribute to an increase in the amount of
  electricity generated from eligible renewable
  energy sources over the period 2001 to 2020.

4
4
GENERAL PRINCIPLES - TARGET
5
5
GENERAL PRINCIPLES

• Liable parties legally responsible for meeting
  obligations
• Market-based tradeable Renewable Energy
  Certificates (RECs) used to demonstrate
  compliance
• Liability discharged by surrendering RECs to
  Regulator

6
6
LEGISLATIVE FRAMEWORK

• Renewable Energy (Electricity) Act 2000
  establishes framework for meeting target
• Renewable Energy (Electricity) (Charge) Act 2000
  establishes rate of the penalty
• Regulations more detail on eligible renewable
  energy resources, power station components and
  baselines

7
7
RENEWABLE ENERGY ACT

• Passed by Commonwealth Parliament 8 December 2000
  
• Royal assent 22 December 2000
• Regulator appointed by Minister for the
  Environment and Heritage 12 February 2001
• Act applies from 1 April 2001
• Office of the Renewable Energy Regulator
  responsible for implementing provisions of
  legislation.

8
8
ROLE OF REGULATOR

• Registers parties and accredits power plants
  (application forms on website www.orer.gov.au)
• Audits parties and imposes penalties
• Regulator reports on progress to Minister and
  Parliament

9
MARKET FORM
9
Registry
- REC created
REC
Liable Parties
Eligible Generators
Markets
- Electricity dispatched and sold as normal
10
RENEWABLE ENERGY CERTIFICATES
10
Any registered person who owns a power station
which produces some electricity from eligible
renewable energy sources Regulator allocates
accreditation number. Accreditation is not
retrospective.
Any person Regulator allocates registration
number
Certificates can only be created after
electricity has been generated. Certificate is
not valid until fee (8 cents) has been paid and
the Regulator has determined it is eligible for
registration. Internet based registry. One REC
One MWh of renewable electricity.
11
ELIGIBLE RENEWABLE ENERGY SOURCES
11
hydro wind solar bagasse
co-generation black liquor wood
waste energy crops crop waste food and
ag. wet waste landfill gas MSW
sewage gas geothermal (HDR and aq)
ocean, wave, tidal PV, wind, hydro RSAPS
solar hot water cofiring fuel cells
12
12
BASELINES

• All accredited power stations have a 1997
  baseline
• New generators generally zero baseline
• Default baseline of three years generation prior
  to 1997 but
• Regulator or applicant can request a review of
  default baseline

13
13
SPECIAL BASELINES

• Special baselines used where more statistically
  representative period (eg energy sources
  dependent on hydrological cycles)
• Where data not available, generator to develop
  methodology with Regulator

14
14
REC - CREATION

• Certificates generally issued for making eligible
  renewable electricity
• But can be issued for displacing electricity if
  by an eligible solar water heater installation
• Certificates can be created directly in the
  internet based registry by accredited party

15
REC - REGISTRATION
15

• Certificates electronic and traceable to the
  point of origin. Identification code includes
• registered persons registration number - power
  station identification code - year - MWh no.
• Eg 179 - SRPVQL01 - 2001 - 00042
• Certificates disclose eligible renewable energy
  source.

16
REC - REGISTRY
16

• REC registry is located at www.rec-registry.com
• Certificates can be traded independently of
  Regulator, but all trades must be recorded in REC
  registry
• Public, members and administration areas
• Public part of the registry shows REC id
  number year of creation name of creator name
  of current owner and previous owners and
  renewable energy source.

17
17
ANNUAL ELECTRICITY RETURNS

• Accredited generators submit an annual
  electricity generation return to Regulator.
• These will include
• electricity power station generated
• electricity generated by each eligible renewable
  energy source and
• number of RECs created.
• Returns can be audited.

18
18
LIABILITY

• Liable parties are those making relevant
  acquisitions
• wholesale acquisition or
• notional wholesale acquisition.
• Sum of relevant acquisitions times renewable
  power percentage
• New renewable power percentage set each year as
  target grows
• Liabilities discharged by surrendering RECs

19
19
LIABLE PARTIES
NON-NEM STATES AND EMBEDDED GENERATORS
NEM STATES
20
20
PENALTIES

• When liability not met, non-tax deductible
  financial penalty of 40/MWh (AUD) to be paid
  but
• Penalty can be redeemed when shortfall corrected
  within 3 years

21
SOLAR WATER HEATERS
21

• Eligible SWH models listed in regulations
• Assumed SWH life ten years
• Total RECs deemed for each model by postcode
• Owner can create RECs or assign to agent
• First certificate created for SWH in WA by agent
  in Queensland

22
CONCLUSIONS
22

• RE(E) Act operating
• New way of encouraging renewable energy
• Many projects being accredited
• Flexible approach to small generators
• Markets becoming established

23
The Office of the Renewable Energy Regulator
23
http//www.orer.gov.au email
orer_at_greenhouse.gov.au phone [phone] fax
02 6274 1725