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National Market Driven Energy Efficiency Target Bill 2007 [2008]

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THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE





NATIONAL MARKET DRIVEN ENERGY EFFICIENCY TARGET BILL 2007

Senator Allison

EXPLANATORY MEMORANDUM

 

National Market Driven Energy Efficiency Target BILL 2007

GENERAL OUTLINE

The purpose of the National Market Driven Energy Efficiency Target Bill 2007 is to amend the Renewable Energy (Electricity) Act 2000.

 

This Bill is introduced to drive greater energy efficiencies and cost effective greenhouse gas abatement by the introduction of an environmental market for energy savings from investment in energy efficiency activities which are additional to actions required by regulations such as Minimum Energy Performance Standards.  

 

The government has not satisfactorily prioritised energy efficiency as an important component of Australia's energy policy.  Indeed the commitment of the government to develop a strategy for nuclear power industry in the absence of an equivalent strategy for energy efficiency will leave the government open to criticism on the grounds of energy security, economic and environmental management.

 

This Bill is introduced as a means to address the recognised barriers and the failure of the market to deliver cost effective energy savings.  This Bill will realise improved productivity and environmental benefits through the increased uptake of energy efficiency and reduce energy waste.

Schedule 1 - Amendment of the Renewable Energy (Electricity) Act) 2000

As energy efficiency is an important productivity measure as well as a low and cost effective greenhouse reduction action, these amendments propose to create a market for energy efficiency through commoditising quality energy efficiency savings. 

 

This is achieved through issuing tradeable certificates for quality and verifiable energy efficiency savings from activities which are above and additional to those activities currently required through legal or regulatory arrangements such as Minimum Energy Performance Standards.   A demand for these certificates is created through the setting of a national energy efficiency target and requiring certain purchasers of electricity (called liable entities) to surrender a specified number of certificates.  The definition of liable parties is the same as defined through the Renewable Energy (Electricity) Act.

FINANCIAL IMPACT

The amendments in this Bill have no financial impact on Government revenue.