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Renewable Energy (Electricity) Amendment Bill 2009

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2008-2009

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

RENEWABLE ENERGY (ELECTRICITY) AMENDMENT BILL 2009

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

Amendments and

New Clauses to be moved on Behalf of the Government

 

 

(Circulated by authority of the Minister for Climate Change and Water,

Senator the Honourable Penny Wong)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENEWABLE ENERGY (ELECTRICITY) AMENDMENT BILL 2009

 

OUTLINE

 

This amendment will enable power stations utilising waste coal mine gas (WCMG) as a fuel source at a specified time to participate in the Renewable Energy Target (RET) scheme for a specified period.

 

This amendment will provide transitional support to existing power stations that may be disadvantaged by the winding up of state-based emissions trading schemes which utilise the WCMG associated with current coal mining operations.

 

The amendment will also increase the annual targets under the RET scheme for the years during which this source will be eligible.

 

In particular, this amendment will:

 

•                 include WCMG as an eligible energy source under the RET scheme legislation. As WCMG is not renewable energy, it is categorised separately to the list of eligible renewable energy sources in the Renewable Energy (Electricity) Act 2000 (the Act);

•                 restrict eligible WCMG to that used in existing power stations over a specified period of time commencing from 1 July 2011, unless otherwise specified in regulations, and ending on 31 December 2020;

•                 for each WCMG-fuelled power station that is accredited under the RET scheme, limit the amount of electricity generated in a year that is eligible for renewable energy certificates. This limit is called the ‘2008 WCMG limit’;

•                 increase annual targets for the years 2011 to 2020 inclusive by the amount of estimated generation from eligible WCMG; and

•                 provide that the ‘2008 WCMG limit’ is to be determined by the Regulator in accordance with guidelines to be prescribed in the regulations. It is the policy intent that these guidelines will include a methodology to ensure that the sum of all 2008 WCMG limits for a year does not exceed the amount by which the annual target has been increased to account for generation from eligible WCMG.

 

Financial impact statement

This amendment is estimated to have a small impact on administered revenue of around $0.7 million over five years from the increased trade in Renewable Energy Certificates.

 

 

 

 

 

RENEWABLE ENeRGY (electricity) AMENDMENT BILL 2009

 

 

SCHEDULE 1 - AMENDMENT OF THE RENEWABLE ENERGY (ELECTRICITY) ACT 2000

Item 2A - Subsection 5(1)

1.       This item amends section 5 of the Act to add a new term “2008 WCMG limit” which has the meaning given to it by section 14. 

Item 2B - Subsection 5(1)

2.       This item amends section 5 of the Act to add a new term “eligible energy sources”, and to define this term to mean eligible renewable energy sources or eligible WCMG. 

Item 2C - Subsection 5(1)

3.       This item amends section 5 of the Act to define eligible WCMG as having the meaning given by new section 17A.

Item 3A - Section 8

4.       This item changes a reference in the Overview of Part 2 of the Act from “eligible renewable energy sources” to “eligible energy sources”. 

Item 3B - Paragraph 12A(2)(c)

5.       This item changes a reference in the Act from “eligible renewable energy sources” to “eligible energy sources”. 

Item 3C - Section 13(2)(ba)(i)

6.       This item changes a reference in the Act from “eligible renewable energy sources” to “eligible energy sources”. 

Item 3D - After subsection  13(2)

7.       This item inserts a new subsection 13(2A) to stipulate that an application for accreditation of a power station that is intended to generate power from eligible WCMG must be made on or before 30 June 2010.

Item 3E - Paragraph 14(2)(a)

8.       This item changes a reference in the Act from “eligible renewable energy sources” to “eligible energy sources”. 

Item 3F - Paragraph 14(3)(b)

9.       This item changes a reference in the Act from “eligible renewable energy sources” to “eligible energy sources”. 

Item 3G - After paragraph 14(3)(b)

10.   This item provides that if a power station generates electricity using eligible WCMG then the Regulator must determine a “2008 WCMG limit” for the power station. 

Item 3H - Subsection 14(3) (note)

11.   This item amends the note to indicate that the “2008 WCMG limit” may be varied.

Item 3J - Subsection 14(4)

12.   This item amends subsection 14(4) to require that the Regulator must determine the “2008 WCMG limit” in accordance with the guidelines prescribed in the regulations. It is the policy intent that these guidelines will include, inter alia:

•                 that the 2008 WCMG limit is to be based on the power station’s total generation using eligible WCMG in 2008;

•                 a methodology for taking into account 1997 eligible renewable power baselines and unusual factors, such as plant outages and resource restrictions, which reduced actual power generation using waste coal mine gas during 2008; and

•                 a methodology to ensure that the sum of all 2008 WCMG limits for a year does not exceed the amount by which the annual target has been increased to account for generation from eligible WCMG;

Item 3K - Subsection 15A(1)

13.   This item amends subsection 15A(1) to add that the time period within which the Regulator must decide an application for accreditation of a power station is subject to new subsection 15A(3).

 

This item also inserts a new heading “ General rule ” for subsection 15A(1).

Item 3L - At the end of section 15A

14.   This item inserts new subsections 15A(3) and 15A(4) under the heading “ Applications that list eligible WCMG as an eligible energy source ”.

Subsection 15A(3) stipulates that if an application for accreditation of a power station that is properly made under section 13 lists eligible WCMG as an intended source of power generation for that power station, the Regulator must decide on the application by 31 December 2010. This allows the Regulator up to six months following the deadline stipulated in new subsection 13(2A) for all relevant applications for accreditation to set all 2008 WCMG limits in accordance with the guidelines to be prescribed in the regulations.

 

Subsection 15A(4) stipulates that if the Regulator does not decide the application on or before 31 December 2010, the Regulator is taken, on the following day, to have made a decision under section 15 refusing the application. This decision is reviewable under section 66 of the Act - “Review of decisions”.

Item 3M - At the end of Division 3 of Part 2

15.   This item inserts new section 17A entitled “What is eligible WCMG?”  Several amendments are made in Item 3M:

•                 This item inserts new subsection 17A(1) which provides that waste coal mine gas is “eligible WCMG” if the following two circumstances both apply:

 

-            The waste coal mine gas must be used in generating electricity by a power station during the period from 1 July 2011 or, if a different date is prescribed by the regulations, the date so prescribed, and ending on 31 December 2020; and

 

-            The waste coal mine gas must be used in a power station that was generating electricity from this source during May 2009, or if not, had previously generated electricity using WCMG, and as at the end of May 2009, the owner or operator has a plan to resume generating electricity from WCMG before the end of September 2009.

 

•                 This item inserts new subsection 17A(2) which provides that for the purposes of this Act, the regulations may prescribe the meaning of waste coal mine gas.

 

•                 This item inserts new subsection 17A(3) which provides that for the purposes of this Act, the regulations may prescribe conditions, in addition to those in subsection 17A(1), that apply in order for waste coal mine gas to be eligible WCMG.

Item 3N - Paragraph 18(4)(a)

16.   This item changes a reference in the Act from “eligible renewable energy sources” to “eligible energy sources”. 

Item 3P - At the end of subsection 18(4)

17.   This item excludes from the calculation of electricity generated by accredited power stations electricity that was generated from eligible WCMG and is in excess of the power station’s 2008 WCMG limit.

Items 3Q, 7A, 7B, and 7C (References to eligible renewable energy source)

18.   The amendments at items 3Q, 7A, 7B and 7C change references in the Act from “eligible renewable energy source” or “eligible renewable energy sources” to “eligible energy source” or “eligible energy sources” respectively.

Item 7D - Division 12 of Part 2 (heading)

19.   This item amends the heading to add a reference to 2008 WCMG limits.

Item 7E - At the end of Division 12 of Part 2

20.   This item inserts new section 30G which sets out that the Regulator may, by written determination, vary the 2008 WCMG limit for an accredited power station in accordance with guidelines prescribed in the regulations. The 2008 WCMG limit can be increased for any years specified in the determination but a determination that decreases the 2008 WCMG limit can only have effect for the years following the year in which the determination is made.

Item 7F Section 40 (table item dealing with 2010 and later years)

21.   This item amends the table item in section 40, to increase annual targets in gigawatt-hours by the amount of generation from eligible WCMG in the period 2011 to 2020 inclusive. This amount for 2011 is 425 gigawatt-hours, and for 2012 to 2020 inclusive is 850 gigawatt-hours each year.

Item 8A - Subsection 66(1) (after table item 5D)

22.   This item inserts a new table item to clarify that the decision to vary the 2008 WCMG limit for an accredited power station is a reviewable decision and that person who may request this review is to be the nominated person for the power station.

Item 8B - After paragraph 138(ca)

23.   This item amends the contents of the register of accredited power stations to include the 2008 WCMG limit for each relevant power station, including any variation to that limit.

Items 8C, 8D and 8E (References to eligible renewable energy source)

24.   Amendments at Items 8C, 8D and 8E change references in the Act from “eligible renewable energy source” or “eligible renewable energy sources” to “eligible energy source” or “eligible energy sources” respectively.