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Environment and Communications Legislation Committee - 13/02/2012 - Estimates - CLIMATE CHANGE AND ENERGY EFFICIENCY PORTFOLIO - Office of the Renewable Energy Regulator

Office of the Renewable Energy Regulator

[12:30]

CHAIR: Mr Livingston, would you like to make an opening statement?

Mr Livingston : No.

Senator BIRMINGHAM: Mr Livingston, what is the current time frame to clear through solar credits in the clearing house?

Mr Livingston : We do not have a time frame, but we are about to set the binding small technology percentage for this year. We issued a non-binding update last December a bit shy of 24 per cent, and we must set a binding target by 31 March. In that target, we must account for any overhang plus our view of the likely forward reduction of STCs in 2012.

Senator BIRMINGHAM: Without me having the register open in front of me, what is the oldest register you have sitting on the site at present?

Mr Livingston : The oldest small technology? I do not know a date, but it would be February or March.

Mr Rathore : I can take that. The oldest register in the clearing house is 25 February 2011.

Senator BIRMINGHAM: How many certificates are currently in the clearing house?

Mr Rathore : There are 6.9 million certificates currently in the clearing house queue.

Senator BIRMINGHAM: The expectation is that the 24 per cent, if that proves to be the final figure or whatever proves to be the final figure when you lodge it, should over the course of the next 12 months clear, by your estimates, all of those 6.9 million STCs, plus whatever else is generated?

Mr Livingston : It would depend on how the market works. People may choose to take their certificates out of the clearing house and sell them on the market. The clearing house price, as you know, is $40 and the market price is about $32 today, so, as the price rises, people take them out of the clearing house and sell them. They have a choice to leave them in the clearing house and wait for them to clear or they can take the money earlier if they wish. It is hard for us to say what personal behaviour will occur.

Senator BIRMINGHAM: Have you seen a movement of more people doing that as the price has recovered to some extent over the last six months?

Mr Livingston : Moving their—

Senator BIRMINGHAM: Moving out of the clearing house and taking the $32.

Mr Livingston : People do do that. As the price rose, they moved them out and sold them. It rose to $32 at one stage and then people were selling at $33 rather than waiting. That is their choice, though.

Senator BIRMINGHAM: Can I go to the inspections being undertaken by the regulator, please. How many inspections do you expect to be achieved this year?

Mr Livingston : There is an update on our website. By 31 January this year we had received results of 1,848 inspections. We have another 1,368 which are in progress as we speak. We will be commissioning more inspections as we get towards the rest of the year. But really it is determined by the availability of the inspectors and so on. We are heading for about 2,000 to 3,000. It will depend on the availability of inspectors, of course. The results are on our website.

Senator BIRMINGHAM: So you expect to achieve about 2,000 to 3,000 inspections this financial year. Is there an average cost per inspection?

Mr Livingston : I do not have one with me. We budget on a number, but it does vary. It depends on where you are doing it. If you are doing it in Alice Springs, it is one cost; if you are doing it in Western Sydney, it is one cost. So, with any average you get, essentially you cannot really use it as such. But it would be around $2,000 or $3,000. It would be of that order, including travel, time, all the reporting requirements and so on. But some are much cheaper than that and some cost more than that.

Senator BIRMINGHAM: And you accredit inspectors to undertake the work?

Mr Livingston : We do, and we are required to meet certain requirements under the act. We accredit them. They have a card. They have to meet certain standards and so on. Then, once we accredit them, they can then go and do inspections.

Senator BIRMINGHAM: How are the sites identified for inspection?

Mr Livingston : It is a random process. We took some advice from some statistical experts on how to go about it, and we select them at random. We then provide those to the inspectors, who then contact the homeowners. Some homeowners do not want an inspection—they are not home and that sort of thing. So that is the process.

Senator BIRMINGHAM: How long does an inspection take on average, and how many people are involved? Travel time et cetera aside, when you get to premises, what is the process and the time line expected?

Mr Livingston : Again it will depend on the particular location, but typically there are two people involved for safety reasons. They might want to take a few hours, so inspectors might get two inspections done a day. If they have a much simpler one, they might get more; if they have a very complex one, they might do fewer. But that is the sort of order of how long it would take. You must be a licensed electrician; you must be a CEC-accredited installer. You have to have all the equipment for access and so on. You have to set up; you have to get there; you have to find the homeowner; you have to talk to the homeowner.

Senator BIRMINGHAM: In terms of the findings of the 848 inspections to date—I think you said that was until the end of January—

Mr Livingston : Yes, 31 January.

Senator BIRMINGHAM: I do not have the website open in front of me, but can you give me a summary of the numbers that have identified faults and problems?

Mr Livingston : Certainly. The numbers really have not changed since the first update on our website, which had about four per cent that we deemed unsafe and about 22 per cent that were a bit substandard. Realistically, it has settled at that. Those were roughly the numbers we found from the first tranche, and the update we have just done recently has confirmed those numbers.

Senator BIRMINGHAM: For the four per cent that are unsafe, what action is taken?

Mr Livingston : They are shut down on the day by the inspector. The homeowner is informed. We inform the state or the local jurisdiction, because safety is their responsibility, and the actions go forward from there.

Senator BIRMINGHAM: Is it possible to shut down the system without shutting down the homeowner's electricity?

Mr Livingston : Yes. It is DC.

Senator BIRMINGHAM: I was just double-checking that. So, in terms of the rectification work on a system, you notify the state authorities and that is where that rectification side and responsibility are?

Mr Livingston : We also notify the installer and the agent. There are a number of people in the act we must notify. It could be the owner. It could be the tenant, because often it might not be the owner of the house. The installer is notified. Then safety is a jurisdictional matter, and they move forward. But, in summary, what we are finding is that the installers and the electricians are very prompt in coming out and rectifying things.

Senator BIRMINGHAM: Is there any assistance provided to homeowners to ensure rectifications are undertaken, or is it the case where, if there is, that is really a state consumer affairs matter?

Mr Livingston : Not provided by ORER, no.

Senator BIRMINGHAM: Okay. In terms of ORER's follow-up with the installers, what has happened in regard to those four per cent of cases?

Mr Livingston : On the CEC side, which is the side we have some influence over, we talk to the CEC about their accreditation of these accredited people, and on the jurisdictional side we talk to the jurisdictions. I know that some of the jurisdictions have suspended the licences of some electricians who have not met these standards. So they would deal with that, because that is not our call, and the CEC deal with accreditation of the accredited installers. So we would do that. As we get more and more numbers, we are beginning to make some analysis of trends and so on, but the numbers are still too early to have anything meaningful about that.

CHAIR: Senator Birmingham, could you make this your last question. We have Senator Bilyk seeking the call as well.

Senator BIRMINGHAM: Okay. It is around 24 or 25 unsafe sites that have been unidentified.

Mr Livingston : No, four per cent unsafe.

Senator BIRMINGHAM: Sorry, four per cent. Among those numbers, are there repeat installers or has action been taken by ORER in terms of the ability of those installers to install sites that can claim STCs?

Mr Livingston : There were some repeats. There were a few faults which were systematic. The electrical licence is a matter for the state jurisdictions and they deal with that. Their accreditation with the CEC is a matter for the CEC. We provide our reports to both the local jurisdiction and to the CEC and they deal with that. We point out the test results because we have no power to do anything about that.

Senator BIRMINGHAM: Has accreditation been withdrawn for any of the installers?

Mr Livingston : Some people have had their accreditation withdrawn by the CEC and some jurisdictions have suspended the licence of some electricians.

Senator BIRMINGHAM: Do you have any statistics on that?

Mr Livingston : No, I do not. I know they are available because we have seen some. We know of some instances where it has occurred, but I do not have any statistics with me.

Senator BIRMINGHAM: Could you provide that information on notice.

Mr Livingston : We will look for that.

Senator BILYK: The Office of the Renewable Energy Regulator is to be amalgamated into the Clean Energy Regulator. I am just wondering if you could update us on the timing of this and where the process is at the moment.

Mr Livingston : The CER starts on 2 April. So on 1 April ORER will cease to exist and we will become part of the CER. The intention is for ORER to move largely holus-bolus across to be part of the CER on 2 April. We have been in all the meetings and team things with CER to make that a smooth process, so we are looking at how we change our websites, our logos, our processes and so on and also what delegations and things need to change. So it is going through the usual machinery of government changes.

Senator BILYK: Will there be any impact on staff? Will any staff be disadvantaged by this process.

Mr Livingston : Virtually no impact. For most staff, their job will not change at all. Clearly some staff in some of the shared areas might have slightly changed jobs, but they have been fully talked about and there is no great impact on ORER staff.

Senator BILYK: Have there been discussions with the relevant unions as well?

Mr Livingston : We have not been in touch with the relevant unions. CER may have.

Senator BILYK: What will this amalgamation mean for the administration and the activity of the renewable energy targets?

Mr Livingston : The slight change will be that the regulator will not be me, it will be a board rather than a person. It will be the CEO and at least two board members, so that will be a slight change and we will have to look at some of our processes around the approvals.

Senator BILYK: Can you elaborate on that a bit at the moment?

Mr Livingston : On the process?

Senator BILYK: On the processes that will need to be changed.

Mr Comley : I think that is actually a matter that we want to go back to our CER bloke on, so perhaps Nico could come up, because essentially it is how the regulator will operate post 2 April.

Senator BILYK: Thank you.

Mr Padovan : In terms of the regulation of the existing schemes—the renewable energy target, NGERS, carbon farming and so forth—certain functions will remain. One of the arrangements that has been put in place under the act is to allow the chief executive chair or the regulator itself to delegate certain functions. What we will work through when Ms Munro commences is what arrangements she wants in place in terms of the existing schemes and how they continue to be administered in moving forward. It may not be the regulator itself that has to physically do that function. There are certainly provisions within the relevant act that allow for that to be delegated within the organisation.

Senator BILYK: What impact will the amalgamation have for businesses?

Mr Livingston : There will be changes to the website but basically we have been talking to our regulator community. They are aware we are moving. Because of the way the registry works, each person has got an account and we can email them directly. So they know that from 2 April they will have to go through a different portal and that sort of thing, but largely in terms of the real ledger the act will be quite small—they have a change of name and that is it really. It may lead down the track to more changes but on day one virtually no change.

Senator BILYK: So there should not be any negative impact to businesses or households?

Mr Livingston : I cannot see why there would be.

CHAIR: Thank you, Mr Livingston.