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Clean Energy Bill 2011

Part 8 Coal-fired electricity generation

Division 1 Introduction

159   Object

                   The object of this Part is to maintain energy security with the introduction of this Act and the associated provisions. It does so by providing transitional assistance in respect of highly emissions-intensive generation assets so as to:

                     (a)  help generators that face sizeable losses in the value of their assets; and

                     (b)  support investor confidence, and underpin the investment in generation assets that is required to ensure that Australia’s future energy security needs are met.

160   Simplified outline

                   The following is a simplified outline of this Part:

•      Free carbon units may be issued in respect of generation complexes that meet certain eligibility requirements.

•      Free units will be issued during:

               (a)     the financial year beginning on 1 July 2013; and

              (b)     each of the next 3 financial years.

•      The number of free units is capped.

•      Free units will not be issued if a generation complex does not pass the power system reliability test for a financial year.

•      Free units will not be issued in respect of a generation complex unless a Clean Energy Investment Plan is given to the Resources and Energy Minister.

•      If a closure contract is in force in relation to a generation complex:

               (a)     there will be restrictions on the free units that may be issued in respect of the generation complex; and

              (b)     the generation complex does not have to pass the power system reliability test; and

               (c)     the requirement to give a Clean Energy Investment Plan does not apply in relation to the generation complex.



 

Division 2 Issue of free carbon units in respect of generation complexes

161   Issue of free carbon units in respect of generation complexes

Scope

             (1)  This section applies to a generation complex if a certificate of eligibility for coal-fired generation assistance is in force in respect of the generation complex.

Issue of free units

             (2)  On each of the following days:

                     (a)  1 September in the eligible financial year beginning on 1 July 2013;

                     (b)  1 September in the eligible financial year beginning on 1 July 2015;

                     (c)  1 September in the eligible financial year beginning on 1 July 2016;

the Regulator must issue a number of free carbon units equal to the number worked out using the following formula:

where:

annual assistance factor specified in the certificate means the number specified in the certificate as the annual assistance factor in respect of the generation complex.

Note:          The annual assistance factor is worked out under section 167.

total annual assistance factors for that eligible financial year means the total of the numbers specified as annual assistance factors in certificates of eligibility for coal-fired generation assistance issued, or purportedly issued, by the Regulator before 1 September in that eligible financial year. For this purpose, disregard a certificate if a decision to issue the certificate was set aside by a court or tribunal before 1 September in that eligible financial year.

             (3)  On 1 September in the eligible financial year beginning on 1 July 2014, the Regulator must issue a number of free carbon units equal to the number worked out using the following formula:

where:

annual assistance factor specified in the certificate means the number specified in the certificate as the annual assistance factor in respect of the generation complex.

Note:          The annual assistance factor is worked out under section 167.

total annual assistance factors for that eligible financial year means the total of the numbers specified as annual assistance factors in certificates of eligibility for coal-fired generation assistance issued, or purportedly issued, by the Regulator before 1 September in that eligible financial year. For this purpose, disregard a certificate if a decision to issue the certificate was set aside by a court or tribunal before 1 September in that eligible financial year.

A means the total number of free carbon units issued in accordance with this Part before 1 September 2014 in respect of the generation complex.

B means the Regulator’s reasonable estimate of the number of free carbon units with a vintage year beginning on 1 July 2013 that were not issued in accordance with this Part in respect of the generation complex because of:

                     (a)  section 169 (power system reliability); or

                     (b)  section 177 (Clean Energy Investment Plan); or

                     (c)  section 181 (closure contracts).

             (4)  If the number worked out using the formula in subsection (2) or (3) is not a multiple of 100:

                     (a)  the number is to be rounded to the nearest multiple of 100; and

                     (b)  if the number is a multiple of 50—the number is to be rounded up to the nearest multiple of 100.

When units are to be issued

             (5)  If 1 September in a later eligible financial year is not a business day, the units are to be issued on the next business day after that 1 September.

Recipient of units

             (6)  Free carbon units issued in accordance with subsection (2) or (3) during an eligible financial year (the relevant eligible financial year ) are to be issued to whichever one of the following persons is applicable:

                     (a)  if, assuming that:

                              (i)  immediately before the end of the previous eligible financial year, the generation complex had been a facility; and

                             (ii)  immediately before the end of the previous eligible financial year, the generation complex had been in operation; and

                            (iii)  immediately before the end of the previous eligible financial year, greenhouse gases with a carbon dioxide equivalence of 25,000 tonnes had been emitted from the operation of the generation complex;

                            a person would, under section 20, be a liable entity for the previous eligible financial year wholly or partly as a result of those emissions of greenhouse gases—the person;

                     (b)  if, assuming that:

                              (i)  immediately before the end of the previous eligible financial year, the generation complex had been a facility; and

                             (ii)  immediately before the end of the previous eligible financial year, the generation complex had been in operation; and

                            (iii)  immediately before the end of the previous eligible financial year, greenhouse gases with a carbon dioxide equivalence of 25,000 tonnes had been emitted from the operation of the generation complex;

                            a person would, under section 22, be a liable entity for the previous eligible financial year wholly or partly as a result of those emissions of greenhouse gases—the person.

             (7)  However, if, assuming that:

                     (a)  immediately before the end of the previous eligible financial year, the generation complex had been a facility; and

                     (b)  immediately before the end of the previous eligible financial year, the generation complex had been in operation; and

                     (c)  immediately before the end of the previous eligible financial year, greenhouse gases with a carbon dioxide equivalence of 25,000 tonnes had been emitted from the operation of the generation complex;

2 or more participants in a designated joint venture would, under section 21, be liable entities for the previous eligible financial year wholly or partly as a result of those emissions of greenhouse gases:

                     (d)  subsection (6) does not apply to the free carbon units issued in accordance with subsection (2) or (3); and

                     (e)  those units are to be divided among, and issued to, those participants in shares that represent their respective participating percentages.

Note:          For participating percentage , see section 76 or 77.

Vintage year

             (8)  Free carbon units issued in accordance with subsection (2) or (3) during an eligible financial year are to have a vintage year of the eligible financial year.

Registry account

             (9)  The Regulator must not issue a free carbon unit to a person in accordance with subsection (2) or (3) unless the person has a Registry account.

Power system reliability

           (10)  This section has effect subject to section 169.

Note:          Section 169 deals with power system reliability.

Clean Energy Investment Plan

           (11)  This section has effect subject to section 177.

Note:          Section 177 deals with Clean Energy Investment Plans.

Closure contract

           (12)  This section has effect subject to section 181.

Note:          Section 181 deals with closure contracts.



 

Division 3 Certificate of eligibility for coal-fired generation assistance

162   Application for certificate of eligibility for coal-fired generation assistance

             (1)  A person may, within 30 days after the commencement of this section, apply for the Regulator to issue a certificate of eligibility for coal-fired generation assistance in respect of a generation complex.

             (2)  A person is not entitled to make an application in respect of a generation complex unless the person owns, controls or operates the generation complex.

             (3)  Applications must be mutually exclusive so far as their coverage of generation units is concerned.

             (4)  If the Regulator receives 2 or more applications that, when taken together, breach subsection (3):

                     (a)  the Regulator must not consider any of those applications; and

                     (b)  the Regulator must, by written notice given to the applicants, reject those applications and inform the applicants that:

                              (i)  the applications breach subsection (3); and

                             (ii)  if one or more fresh applications are made within 20 days after the notice was given and those fresh applications do not breach subsection (3), the Regulator will be prepared to consider those fresh applications.

             (5)  The 30 day time limit in subsection (1) does not apply to a fresh application made in response to a notice under subsection (4).

             (6)  This Act (other than subsection (4)) has effect as if an application rejected under subsection (4) had never been made.

             (7)  The Regulator may extend the 30 day time limit in subsection (1) for the making of a particular application, so long as:

                     (a)  the extended time limit is not later than 60 days after the commencement of this section; and

                     (b)  the application, when taken together with any other application or applications received by the Regulator, does not breach subsection (3).

163   Form of application

             (1)  An application must:

                     (a)  be in writing; and

                     (b)  be in the approved combined form; and

                     (c)  be accompanied by such information as is specified in the regulations; and

                     (d)  be accompanied by such documents (if any) as are specified in the regulations; and

                     (e)  be accompanied by a prescribed report.

             (2)  For the purposes of this section, the approved combined form is the form approved, in writing, by the Minister (whether before or after the commencement of this section):

                     (a)  for applications for payments from the Energy Security Fund; and

                     (b)  for applications under section 162.

             (3)  Paragraph (2)(a) does not apply in relation to a payment under a contract with the Commonwealth that relates to the closure of a generation complex.

             (4)  The approved combined form may provide for verification by statutory declaration of statements in applications.

164   Further information

             (1)  The Regulator may, by written notice given to an applicant, require the applicant to give the Regulator, within the period specified in the notice, further information in connection with the application.

             (2)  If the applicant breaches the requirement, the Regulator may, by written notice given to the applicant:

                     (a)  refuse to consider the application; or

                     (b)  refuse to take any action, or any further action, in relation to the application.

165   Issue of certificate of eligibility for coal-fired generation assistance

Scope

             (1)  This section applies to a generation complex if an application under section 162 has been made in respect of the generation complex.

Issue of certificate

             (2)  After considering the application, the Regulator may issue a certificate of eligibility for coal-fired generation assistance in respect of the generation complex.

Note:          See section 166 (criteria for issuing certificate).

             (3)  A certificate of eligibility for coal-fired generation assistance must state that a specified number is the annual assistance factor in respect of the generation complex.

Note:          The annual assistance factor is worked out under section 167.

Timing

             (4)  The Regulator must take all reasonable steps to ensure that a decision is made on the application:

                     (a)  if the Regulator requires the applicant to give further information under subsection 164(1) in relation to the application—within 90 days after the applicant gave the Regulator the information; or

                     (b)  otherwise—within whichever is the later of the following:

                              (i)  90 days after the application was made;

                             (ii)  150 days after the commencement of this section.

Refusal

             (5)  If the Regulator decides to refuse to issue a certificate of eligibility for coal-fired generation assistance in respect of the generation complex, the Regulator must give written notice of the decision to the applicant.

Publication of copy of certificate

             (6)  As soon as practicable after issuing a certificate of eligibility for coal-fired generation assistance in respect of the generation complex, the Regulator must publish a copy of the certificate on its website.

166   Criteria for issuing certificate of eligibility for coal-fired generation assistance

             (1)  The Regulator must not issue a certificate of eligibility for coal-fired generation assistance in respect of a generation complex unless the Regulator is satisfied that the generation complex passes the generation complex assistance eligibility test.

Generation complexes

             (2)  For the purposes of subsection (1), a generation complex passes the generation complex assistance eligibility test if:

                     (a)  at any time during the period:

                              (i)  beginning on 1 July 2008; and

                             (ii)  ending on 30 June 2010;

                            the generation complex:

                            (iii)  was in operation; and

                            (iv)  was connected to a grid with a grid capacity of at least 100 megawatts; and

                     (b)  at least 95% of the electricity generated by the generation complex during the period:

                              (i)  beginning on 1 July 2008; and

                             (ii)  ending on 30 June 2010;

                            was attributable to the combustion of coal; and

                     (c)  the emissions intensity of the generation complex is greater than 1.0.

Note:          For emissions intensity , see section 168.

Capacity of grid

             (3)  For the purposes of this section, the capacity of a grid is to be determined in accordance with regulations made for the purposes of subsection 31(3) of the Renewable Energy (Electricity) Act 2000 .

Rounding

             (4)  For the purposes of this section, disregard subsection 168(2) in working out the emissions intensity of a generation complex.

167   Annual assistance factor

                   The annual assistance factor to be specified in a certificate of eligibility for coal-fired generation assistance in respect of a generation complex is the Regulator’s reasonable estimate of the number worked out to 3 decimal places using the following formula:

where:

emissions intensity means the emissions intensity of the generation complex.

Note:          For emissions intensity , see section 168.

historical energy means:

                     (a)  if the generation complex is a generation complex that entered service on or before 1 July 2008—the total number of gigawatt hours of electricity generated by the generation complex during the period:

                              (i)  beginning on 1 July 2008; and

                             (ii)  ending on 30 June 2010;

                            as measured at all generator terminals of the generation complex; or

                     (b)  if the generation complex is a generation complex that entered service after 1 July 2008—14.016 multiplied by the number of megawatts in the nameplate rating of the generation complex as at the day the generation complex entered service.

168   Emissions intensity

             (1)  For the purposes of this Act, the emissions intensity of a generation complex is the number worked out to 3 decimal places using the formula:

where:

carbon dioxide equivalence of emissions means the total number of kilotonnes of the carbon dioxide equivalence of the greenhouse gases emitted from the combustion of fuel in the generation complex for the purposes of the generation of electricity during the period:

                     (a)  beginning on 1 July 2008; and

                     (b)  ending on 30 June 2010.

gigawatt hours of electricity generated means the total number of gigawatt hours of electricity generated by the generation complex during the period:

                     (a)  beginning on 1 July 2008; and

                     (b)  ending on 30 June 2010;

as measured at all generator terminals of the generation complex.

             (2)  However, the emissions intensity of a generation complex is taken to be 1.3 if the number worked out to 3 decimal places using the formula in subsection (1) is greater than 1.3.



 

Division 4 Power system reliability

169   No assistance if generation complex does not pass the power system reliability test

Scope

             (1)  This section applies to a generation complex if a certificate of eligibility for coal-fired generation assistance is in force in respect of the generation complex.

No assistance if generation complex does not pass the power system reliability test

             (2)  No free carbon units with a vintage year of a particular eligible financial year are to be issued in accordance with this Part in respect of the generation complex if the generation complex does not pass the power system reliability test in relation to the eligible financial year.

Closure contract

             (3)  This section has effect subject to section 181A.

170   Power system reliability test

Scope

             (1)  This section applies to a generation complex if a certificate of eligibility for coal-fired generation assistance is in force in respect of the generation complex.

Power system reliability test

             (2)  For the purposes of this Act, the generation complex passes the power system reliability test in relation to an eligible financial year (the relevant eligible financial year ) if:

                     (a)  the following conditions are satisfied:

                              (i)  as at the start of 1 April in the previous eligible financial year, a person who owns, controls or operates the generation complex is registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets;

                             (ii)  as at the start of 1 July 2010, the nameplate rating in megawatts of the generation complex was registered under such a law;

                            (iii)  as at the start of 1 April in the previous eligible financial year, the nameplate rating in megawatts of the generation complex was not less than the nameplate rating in megawatts of the generation complex that was registered under that law as at the start of 1 July 2010; or

                     (b)  the following conditions are satisfied:

                              (i)  as at the start of 1 April in the previous eligible financial year, a person who owns, controls or operates the generation complex is registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets;

                             (ii)  the nameplate rating in megawatts of the generation complex was first registered under the law at a time after the start of 1 July 2010 but before 1 April in the previous eligible financial year;

                            (iii)  as at the start of 1 April in the previous eligible financial year, the nameplate rating in megawatts of the generation complex was not less than the nameplate rating in megawatts that was registered as mentioned in subparagraph (ii); or

                     (c)  the following conditions are satisfied:

                              (i)  neither paragraph (a) nor (b) applies;

                             (ii)  as at the start of 1 April in the previous eligible financial year, a person who owns, controls or operates the generation complex is registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets;

                            (iii)  during the period beginning at the start of 1 July 2010 and ending immediately before 1 April in the previous eligible financial year, there were one or more reductions in the nameplate rating in megawatts of the generation complex;

                            (iv)  the appropriate energy market operator certifies in writing that there is unlikely to be a breach of relevant power system reliability standards applicable to the energy market concerned at any time within 2 years after the reduction or reductions; or

                     (d)  the following conditions are satisfied:

                              (i)  neither paragraph (a) nor (b) applies;

                             (ii)  at a time before 1 April in the previous eligible financial year, a person who owns, controls or operates the generation complex was registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets;

                            (iii)  during the period beginning at the start of 1 July 2010 and ending immediately before 1 April in the previous eligible financial year, the registration ceased to be in force;

                            (iv)  the appropriate energy market operator certifies in writing that there is unlikely to be a breach of relevant power system reliability standards applicable to the energy market concerned at any time within 2 years after the cessation; or

                     (e)  the conditions set out in section 171 are satisfied; or

                      (f)  the following conditions are satisfied:

                              (i)  the generation complex passed the power system reliability test in relation to an earlier eligible financial year because of paragraph (e);

                             (ii)  the generation complex did so partly because, during the period mentioned in subparagraph 171(3)(a)(ii), there was a reduction in the nameplate rating in megawatts of the generation complex;

                            (iii)  during the period beginning immediately after the end of the period mentioned in subparagraph 171(3)(a)(ii) and ending immediately before 1 April in the eligible financial year that preceded the relevant eligible financial year, there was no reduction in the nameplate rating in megawatts of the generation complex; or

                     (g)  the following conditions are satisfied:

                              (i)  the generation complex passed the power system reliability test in relation to an earlier eligible financial year because of paragraph (e);

                             (ii)  the generation complex did so partly because of paragraph 171(3)(b).

171   Replacement capacity

             (1)  This section sets out the conditions mentioned in paragraph 170(2)(e) that apply for the purposes of ascertaining whether the generation complex passes the power system reliability test in relation to an eligible financial year.

             (2)  The first condition is that neither paragraph 170(2)(a) nor (b) applies.

             (3)  The second condition is that either:

                     (a)  both:

                              (i)  as at the start of 1 April in the previous eligible financial year, a person (the first person ) who owns, controls or operates the generation complex is registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets; and

                             (ii)  during the period beginning at the start of 1 July 2010 and ending immediately before 1 April in the previous eligible financial year, there was a reduction in the nameplate rating in megawatts of the generation complex; or

                     (b)  both:

                              (i)  at a time before 1 April in the previous eligible financial year, a person (the first person ) who owns, controls or operates the generation complex was registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets; and

                             (ii)  during the period beginning at the start of 1 July 2010 and ending immediately before 1 April in the previous eligible financial year, the registration ceased to be in force.

             (4)  The third condition is that, as at the start of 1 April in the previous eligible financial year, the first person is registered, under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets, as a generator in respect of one or more generation units that:

                     (a)  before the start of that 1 April, have been nominated by the first person under section 172 for the purposes of the application of this section to the generation complex; and

                     (b)  are not included in the generation complex; and

                     (c)  are connected to the same interconnected electricity system as the generation complex; and

                     (d)  if the market relating to the interconnected electricity system is divided into regions—are located in the same region as the generation complex; and

                     (e)  entered service on or before 1 December in the previous eligible financial year; and

                      (f)  were not taken into account under paragraph (5)(b) for the purposes of ascertaining whether the generation complex passed the power system reliability test in relation to an earlier eligible financial year.

             (5)  The fourth condition is that the sum of:

                     (a)  the nameplate rating in megawatts of the generation complex that was registered under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets as at the start of 1 April in the previous eligible financial year; and

                     (b)  the nameplate rating or ratings in megawatts of the generation units covered by subsection (4) that was registered under such a law as at the start of 1 April in the previous eligible financial year; and

                     (c)  if:

                              (i)  the generation complex passed the power system reliability test in relation to an earlier eligible financial year because of paragraph 170(2)(e); and

                             (ii)  the generation complex did so in relation to whichever is the most recent of those earlier eligible financial years partly because there were relevant excess megawatts;

                            those relevant excess megawatts;

equals or exceeds whichever is the least of the following:

                     (d)  whichever of the following is applicable:

                              (i)  if, as at the start of 1 July 2010, the nameplate rating in megawatts of the generation complex was registered under such a law—the nameplate rating in megawatts as so registered;

                             (ii)  if the nameplate rating in megawatts of the generation complex was first registered under such a law at a time after the start of 1 July 2010 but before 1 April in the previous eligible financial year—the nameplate rating in megawatts so registered;

                     (e)  if the generation complex has passed the power system reliability test in relation to one or more earlier eligible financial years because of paragraph 170(2)(c)—the reduced nameplate rating in megawatts of the generation complex that was applicable under subparagraph 170(2)(c)(iii) for the purposes of ascertaining whether the generation complex passed the power system reliability test in relation to whichever is the most recent of those earlier eligible financial years;

                      (f)  if the generation complex passed the power system reliability test in relation to one or more earlier eligible financial years because of paragraph 170(2)(e)—the nameplate rating in megawatts that was applicable under paragraph (a) of this subsection for the purposes of ascertaining whether the generation complex passed the power system reliability test in relation to whichever is the most recent of those earlier eligible financial years.

The excess (if any) is to be known as the relevant excess megawatts .

             (6)  The fifth condition is that the requirements (if any) set out in the regulations are met.

             (7)  For the purposes of this section, the nameplate rating of a generation unit is:

                     (a)  if the appropriate energy market operator in relation to the relevant generation complex is Australian Energy Market Operator Limited (ACN 072 010 327)——the maximum generation capacity in megawatts of the generation complex, most recently published by Australian Energy Market Operator Limited; and

                     (b)  if the appropriate energy market operator in relation to the relevant generation complex is the Independent Market Operator established under the Electricity Industry (Independent Market Operator) Regulations 2004 of Western Australia—the maximum generation capacity in megawatts of the generation unit specified in a written determination made by the Regulator for the purposes of this paragraph.

             (8)  In making a determination under paragraph (7)(b), the Regulator may have regard to any information provided to the Regulator by the Independent Market Operator.

             (9)  For the purposes of this section, a generation unit that comprises, or is included in, a generation complex enters service when the unit is first dispatched to deliver electricity by the appropriate energy market operator.

172   Nomination of generation units

Scope

             (1)  This section applies to a generation unit if:

                     (a)  a person (the first person ) who owns, controls or operates the generation unit is registered as a generator in respect of the generation unit under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets; and

                     (b)  the generation unit was first registered under the law on or after 1 July 2011; and

                     (c)  when the generation unit was first registered under the law, the first person was registered in respect of the generation unit under the law; and

                     (d)  if a project to construct and commission the generation unit was in existence as at the start of 1 July 2011—the project was not fully committed by the project proponent as at the start of 1 July 2011, having regard to the following matters:

                              (i)  the project proponent’s rights to land for the construction of the project;

                             (ii)  whether contracts for the supply and construction of the project’s major plant or equipment (including contract provisions for project cancellations) were executed;

                            (iii)  the status of all planning and construction approvals and licences necessary for the commencement of construction of the project (including completed and approved environmental impact statements);

                            (iv)  the level of commitment to financing arrangements for the project;

                             (v)  whether project construction had commenced before 1 July 2011;

                            (vi)  whether, as at the start of 1 July 2011, a firm date had been set for project construction to commence; and

                     (e)  the generation unit has output that:

                              (i)  is readily predictable; and

                             (ii)  is not significantly dependent on factors beyond the control of the operator; and

                      (f)  the likely emissions intensity of the generation unit during the 2-year period beginning when the generation unit enters service does not exceed 0.80; and

                     (g)  the requirements (if any) set out in the regulations are met.

Nomination of generation unit

             (2)  The first person may, by written notice given to the Regulator, nominate the generation unit for the purposes of the application of section 171 to a specified generation complex.

             (3)  A nomination must be accompanied by a report that complies with subsection (4).

             (4)  A report complies with this subsection if:

                     (a)  the report is by a person who has appropriate engineering qualifications; and

                     (b)  the report sets out the person’s estimate of the likely emissions intensity of the generation unit during the 2-year period beginning when the generation unit enters service; and

                     (c)  the person does not have an interest, pecuniary or otherwise, in the outcome of the nomination.

             (5)  A nomination cannot be withdrawn.

             (6)  The first person is not entitled to nominate the generation unit if the generation unit has already been nominated under this section (whether by the first person or by another person).

Emissions intensity

             (7)  For the purposes of subsection (1), the likely emissions intensity of a generation unit during the 2-year period beginning when the generation unit enters service is the number that, in the opinion of the Regulator, should be treated as the likely emissions intensity of the generation unit during that 2-year period, having regard to the following matters:

                     (a)  any documents relating to the design of the generation unit;

                     (b)  if the generation unit has entered service—the number worked out using the formula set out in subsection (8);

                     (c)  the report mentioned in subsection (3);

                     (d)  such other matters (if any) as the Regulator considers relevant.

             (8)  The formula mentioned in paragraph (7)(b) is:

where:

carbon dioxide equivalence of emissions means the total number of kilotonnes of the carbon dioxide equivalence of the greenhouse gases emitted from the combustion of fuel in the generation unit for the purposes of the generation of electricity during the period when the generation unit was in service.

gigawatt hours of electricity generated means the number of gigawatt hours of electricity generated by the generation unit during the period when the generation complex was in service, as measured at all generator terminals of the generation unit.

When generation unit enters service

             (9)  For the purposes of this section, a generation unit enters service when the unit is first dispatched to deliver electricity by the appropriate energy market operator.

173   Validity of nomination

Scope

             (1)  This section applies if a person makes, or purports to make, a nomination under subsection 172(2).

Requirement

             (2)  The Regulator must, within 60 days after receiving the nomination or purported nomination, take all reasonable steps to inform the person whether or not the Regulator is satisfied that the nomination or purported nomination is valid.

174    Anticipatory certification—reduction in nameplate rating

Scope

             (1)  This section applies to a generation complex if a person who owns, controls or operates the generation complex is registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets.

Application

             (2)  The person may apply, in writing, to the appropriate energy market operator to certify that if a proposed reduction in the nameplate rating in megawatts of the generation complex were to occur during the period:

                     (a)  beginning at the start of 1 July 2010; and

                     (b)  ending immediately before 1 April in a specified eligible financial year;

there is unlikely to be a breach of relevant power system reliability standards applicable to the energy market concerned at any time within 2 years after the reduction.

Certification

             (3)  If an application is made under subsection (2), the appropriate energy market operator may:

                     (a)  certify in accordance with the application; or

                     (b)  refuse to so certify.

             (4)  If, within 120 days after receiving an application under subsection (2), the appropriate energy market operator has neither:

                     (a)  certified in accordance with the application; nor

                     (b)  refused to so certify;

the appropriate energy market operator is taken, for the purposes of this Act, to have certified in accordance with the application.

Consequences of certification

             (5)  If:

                     (a)  the appropriate energy market operator certifies in accordance with the application; and

                     (b)  the proposed reduction occurs;

then, for the purposes of subparagraph 170(2)(c)(iv), the appropriate energy market operator is taken to have certified in writing that there is unlikely to be a breach of relevant power system reliability standards applicable to the energy market concerned at any time within 2 years after the reduction.

175    Anticipatory certification—cessation of registration as a generator

Scope

             (1)  This section applies to a generation complex if a person who owns, controls or operates the generation complex is registered as a generator in respect of the generation complex under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets.

Application

             (2)  The person may apply, in writing, to the appropriate energy market operator to certify that if a proposed cessation of the registration were to occur during the period:

                     (a)  beginning at the start of 1 July 2010; and

                     (b)  ending immediately before 1 April in a specified eligible financial year;

there is unlikely to be a breach of relevant power system reliability standards applicable to the energy market concerned at any time within 2 years after the cessation.

Certification

             (3)  If an application is made under subsection (2), the appropriate energy market operator may:

                     (a)  certify in accordance with the application; or

                     (b)  refuse to so certify.

             (4)  If, within 120 days after receiving an application under subsection (2), the appropriate energy market operator has neither:

                     (a)  certified in accordance with the application; nor

                     (b)  refused to so certify;

the appropriate energy market operator is taken, for the purposes of this Act, to have certified in accordance with the application.

Consequences of certification

             (5)  If:

                     (a)  the appropriate energy market operator certifies in accordance with the application; and

                     (b)  the proposed cessation occurs;

then, for the purposes of subparagraph 170(2)(d)(iv), the appropriate energy market operator is taken to have certified in writing that there is unlikely to be a breach of relevant power system reliability standards applicable to the energy market concerned at any time within 2 years after the cessation.

176   Intermediary registered as a generator

                   If:

                     (a)  a person (the first person ) owns, controls or operates a generation complex; and

                     (b)  under a law of the Commonwealth, a State or a Territory relating to the regulation of energy markets, the first person is exempt from the requirement under that law to be registered as a generator in respect of the generation complex; and

                     (c)  the first person is exempt because another person (the intermediary ) is registered under that law as a generator in respect of the generation complex;

the intermediary is taken, for the purposes of this Division, to be a person who controls the generation complex.



 

Division 5 Clean Energy Investment Plans

177   No assistance unless Clean Energy Investment Plan given

             (1)  No free carbon units with a vintage year of a particular eligible financial year are to be issued in accordance with this Part in respect of a generation complex unless a person who owns, controls or operates the generation complex:

                     (a)  gives the Resources and Energy Minister a Clean Energy Investment Plan for the eligible financial year; and

                     (b)  does so by 15 August in the eligible financial year.

             (2)  This section has effect subject to section 181A (which deals with closure contracts).

178   Clean Energy Investment Plan

                   For the purposes of this Division, a Clean Energy Investment Plan given by a person for an eligible financial year is a plan:

                     (a)  that sets out:

                              (i)  the plans (if any) the person has for investment in new electrical generation capacity; and

                             (ii)  the plans (if any) the person has for investment in the reduction of the emissions intensity of a generation complex (whether or not the generation complex is owned, controlled or operated by the person); and

                            (iii)  the plans (if any) the person has for investment in research and development in relation to clean energy technology; and

                     (b)  if one or more reports that, to any extent, relate to a generation complex owned, controlled or operated by the person have been prepared and made available to the public in accordance with section 22 of the Energy Efficiency Opportunities Act 2006 —that:

                              (i)  is accompanied by a copy of the most recent report; or

                             (ii)  includes the URL of a website from which a copy of the most recent report can be downloaded.

179   Copy of Clean Energy Investment Plan to be given to the Regulator

                   If the Resources and Energy Minister receives a Clean Energy Investment Plan under section 177, he or she must give a copy of the plan to the Regulator.

180   Publication of Clean Energy Investment Plan

                   If the Resources and Energy Minister receives a Clean Energy Investment Plan under section 177, he or she must cause the Clean Energy Investment Plan to be published on the website of his or her Department.



 

Division 6 Closure contracts

181   Restrictions on assistance if closure contract has been entered into

No free carbon units to be issued

             (1)  If:

                     (a)  a person who owns, operates or controls a generation complex has entered into a contract with the Commonwealth that relates to the closure of the generation complex; and

                     (b)  the contract contains a provision to the effect that the contract is a closure contract for the purposes of this Act in relation to all of the following eligible financial years:

                              (i)  the eligible financial year beginning on 1 July 2013;

                             (ii)  the eligible financial year beginning on 1 July 2014;

                            (iii)  the eligible financial year beginning on 1 July 2015;

                            (iv)  the eligible financial year beginning on 1 July 2016;

no free carbon units are to be issued in accordance with this Part in respect of the generation complex.

No free carbon units with a particular vintage year to be issued

             (2)  If:

                     (a)  a person who owns, operates or controls a generation complex has entered into a contract with the Commonwealth that relates to the closure of the generation complex; and

                     (b)  the contract contains a provision to the effect that the contract is a closure contract for the purposes of this Act in relation to one or more specified eligible financial years; and

                     (c)  subsection (1) does not apply;

no free carbon units with a vintage year of any of those eligible financial years are to be issued in accordance with this Part in respect of the generation complex.

181A   Exemptions from power system reliability test and Clean Energy Investment Plan

                   If:

                     (a)  a person who owns, operates or controls a generation complex has entered into a contract with the Commonwealth that relates to the closure of the generation complex; and

                     (b)  the contract contains a provision to the effect that the contract is a closure contract for the purposes of this Act in relation to one or more eligible financial years;

the following provisions do not apply in relation to the generation complex:

                     (c)  subsection 169(2);

                     (d)  section 177.

Note 1:       Subsection 169(2) deals with the power system reliability test.

Note 2:       Section 177 deals with Clean Energy Investment Plans.