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Renewable Energy (Electricity) Amendment Bill 2010

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2008 - 2009 - 2010

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

SENATE

 

 

 

 

Renewable Energy (Electricity) Amendment Bill 2010

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

Amendments to be Moved on Behalf of the Government

 

 

 

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

Senator the Honourable Penelope Ying Yen Wong)

 

 

 



Renewable Energy (Electricity) Amendment Bill 2010

OUTLINE

This amendment to the Renewable Energy (Electricity) Amendment Bill 2010 (the Bill) will strengthen the processes to review, where necessary, the $40 price for Renewable Energy Certificates (RECs) in the Small-scale Renewable Energy Scheme (SRES) to ensure it remains relevant over time.  The amendment will enable the Minister to make a legislative instrument that reduces the $40 price for RECs in the SRES, after obtaining and taking into consideration independent advice on:

(a)            whether the total value, in megawatt-hours (MWh), of small-scale technology certificates created in 2015 exceeded or is expected to exceed 6,000,000;

(b)           any changes to the costs of small generation units and solar water heaters;

(c)            the extent to which owners of small generation units and solar water heaters contribute to the costs of small generation units and solar water heaters; and

(d)           the impact on the electricity market, including on electricity prices, of:

(i)             the clearing house price; and

(ii)            the number of small generation units and solar water heaters installed.

The Minister will be required to table in Parliament a written statement setting out the Minister’s reasons for making the instrument.

Financial Impact Statement

This amendment will not have a financial impact for the Commonwealth .



  SCHEDULE 1 - AMENDMENTS

 

Item 1 - 4A Subsection 5(1)

 

1.       This item amends the Bill to provide that the new term clearing house price has the meaning as given by section 30LA. This term will be used to refer to the price a seller receives for each small-scale technology certificate transferred in the clearing house in circumstances where a taxable supply is not involved.

 

Item 2 - 8A Subsection 5(1)

 

2.       This item amends the Bill to provide that the new term GST inclusive clearing house price has the meaning as given by section 30LA. This term will be used to refer to the amount applicants must provide to purchase a small-scale technology certificate in the clearing house and the price a seller receives for each small-scale technology certificate transferred in the clearing house where a taxable supply is involved.

 

Item 3 -30LA Clearing house price etc.

 

3.       This item amends the Bill to insert a new section 30LA. 

 

4.       This item inserts new subsections 30LA(1) and 30LA(2), which define the terms clearing house price and GST inclusive clearing house price . This item specifies that the clearing house price is either $40 or a lesser amount as specified by the Minister by legislative instrument. The GST clearing house price is the clearing house price plus GST, that is, 110 per cent of the clearing house price.

 

5.       This item also inserts new subsection 30LA(3), which provides that before the Minister makes the legislative instrument to specify that amount, the Minister:

a)       must take into consideration:

                                  i.      whether the total value, in megawatt-hours (MWh), of small-scale technology certificates created in 2015 exceeded or is expected to exceed 6,000,000;

                                ii.      any changes to the costs of small generation units and solar water heaters;

                              iii.      the extent to which owners of small generation units and solar water heaters contribute to the costs of small generation units and solar water heaters; and

                              iv.      the impact of the clearing house price, and the number of small generation units and solar water heaters installed, on the electricity market, including on electricity prices; and

b)       may take into consideration any other matters that the Minister considers relevant.

 

6.       This item also inserts new subsection 30LA(4), which provides that the Minister must obtain, and take into consideration, independent advice regarding the factors listed above in order to inform an assessment of the relevance of the $40 price for small-scale technology certificates.  The intention is that the independent advice that the Minister will be required to take into consideration before prescribing a reduced clearing house price will be advice provided by an independent energy market body.

 

7.       This item also inserts new subsection 30LA(5), which provides that if the Minister makes a legislative instrument to prescribe a lesser amount for small-scale technology certificates in the clearing house than $40 (exclusive of GST), the new price can only commence from 1 April following the making of the legislative instrument. This will provide certainty as to the clearing house price during each compliance year, which end 31 March in the year following the annual compliance year.

 

8.       The item also inserts new subsection 30LA(6), which provides that if the Minister makes a legislative instrument to prescribe a lesser price for small-scale technology certificates in the clearing house than $40 (exclusive of GST), the Minister is required to table a statement of reasons as to why the new price has been prescribed.

 

Items 4 - 8

 

9.       Items 4 to 8 amend the Bill to change references to $40 and $44 to the clearing house price and the GST inclusive clearing house price respectively. The amended references are to reflect the price of small-scale technology certificates as transferred in the clearing house, being either $40 (or $44 inclusive of GST), or as prescribed by legislative instrument by the Minister.