EXPLANATORY STATEMENT

 

 

Select Legislative Instrument 2005 No. 5

 

 

ISSUED BY AUTHORITY OF THE MINISTER FOR THE
ENVIRONMENT AND HERITAGE

 

 

Renewable Energy (Electricity) Act 2000

 

Renewable Energy (Electricity) Amendment Regulations 2005 (No. 1)

 

Subsection 161 (1) of the Renewable Energy (Electricity) Act 2000 (the Act) provides that the Governor-General may make regulations prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Subsection 161 (2) provides that the draft regulations must be available for public comment for a period not less than 30 days before the regulations are made.⁽¹⁾

 

The Act provides the legislative framework for the implementation of the Government’s mandatory renewable energy target, announced by the Prime Minister on 20 November 1997. The mandatory renewable energy target is designed to increase the amount of electricity in Australia that has been generated from renewable energy sources. By 2010, an additional 9,500 Giga Watt hours (GWh) of electricity will be required to be supplied from renewable energy sources, raising the contribution that renewable energy sources make to Australia’s electricity supply to around 12 percent.

 

Under the Act, wholesale purchasers of electricity (the ‘liable parties’) are required to meet a share of the target in proportion to their share of the national wholesale electricity market.  The Act provides for the creation of renewable energy certificates by generators of renewable energy.  One Mega Watt hour of electricity generated from renewable energy sources equals one renewable energy certificate.  The renewable energy certificates, once registered, are traded and sold to the liable parties who, in turn, must surrender the renewable energy certificates to the Renewable Energy Regulator, or pay a penalty.  The number of renewable energy certificates to be surrendered by a liable party is determined by multiplying the amount of electricity purchased by the liable party by the Renewable Power Percentage (RPP), as prescribed in the Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations) for the year to which it applies.

 

The purpose of the Regulations is to amend the Principal Regulations to specify the RPP for 2005, which is used in a formula to calculate the number of renewable energy certificates that liable parties have to surrender to the Renewable Energy Regulator to avoid a penalty.  The RPP for 2005 would be 1.64 percent.

 

Subsection 39 (1) of the Act provides that the RPP for a given year must be specified in the regulations on or prior to 31 March in that year.  However, subsection 39 (3) provides that, before the Governor-General makes a regulation under subsection 39 (1), the Minister must take into consideration the required amount of renewable electricity for the year, the estimated amount of electricity to be acquired for the year, and the amount by which the required GWhs of renewable source electricity for previous years has exceeded, or has been exceeded by, the amount of renewable electricity required under the scheme in those years.⁽²⁾

 

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.