EXPLANATORY STATEMENT

Select Legislative Instrument 2010 (No. 142)

Issued by the Authority of the Minister for Climate Change, Energy Efficiency and Water

Renewable Energy (Electricity) Act 2000

Renewable Energy (Electricity) Amendment Regulations 2010 (No. 3)

Section 161 of the Renewable Energy (Electricity) Act 2000 (the Act) provides, in part, that the Governor‑General may make Regulations prescribing matters required or permitted by the Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Regulations amend the Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations) to strengthen the safety and compliance regime that applies to certain small generation units (SGUs).

The Act, as amended by the Renewable Energy (Electricity) Amendment Act 2009, establishes a Renewable Energy Target (RET) scheme to encourage additional electricity generation from eligible energy sources. The RET creates a guaranteed market for 12,500 gigawatt‑hours (GWh) of renewable energy in 2010 rising to 45,000 GWh in 2020, staying at that level until 2030. The RET scheme is designed to ensure that 20 per cent of Australia’s electricity supply is generated from renewable sources by 2020.

Under the Act, wholesale electricity purchasers (‘liable parties’) are required to contribute to the RET in proportion to their share of the national wholesale electricity market. The Act provides for the creation of Renewable Energy Certificates (RECs) by renewable energy generators. One REC generally represents one megawatt-hour (MWh) of electricity from eligible energy sources.

The Principal Regulations provide an administrative framework to implement the Act in relation to power station accreditation, eligibility requirements for renewable energy sources, eligibility requirements for solar water heaters and small generation units, and calculation methods for determining the number of RECs.

The Principal Regulations provide that owners of prescribed SGUs, including solar photovoltaic (PV) panels, small wind turbines and micro-hydro systems, may create and trade RECs under prescribed deeming arrangements for energy produced or displaced by these systems. The deeming arrangements include multiple one year and five year deeming periods for all three SGU technology types, and also provide the option of a single 15-year deeming period for solar PV installations. In most cases, system purchasers assign the right to create the RECs to their supplier in return for a discount off the system price.

SGU owners may apply, after installation, to the Office of the Renewable Energy Regulator, which administers the Act and Principal Regulations, to create RECs equivalent to the amount of energy that is deemed to be generated, over a future period that can vary with technology type. These tradeable RECs can then be sold on the RECs market. Alternatively, the owner may assign the right to create the RECs to another party.

The Regulations strengthen the safety and quality compliance regime around REC entitlements for SGU installations.

In particular, the Regulations:

•                extend the current requirement that under certain circumstances SGUs must be designed and installed by persons accredited under the Clean Energy Council’s accreditation scheme, to apply to all SGU installations, regardless of technology or deeming period chosen;

•                explicitly require that electrical wiring must be carried out by a licensed electrician (except in certain circumstances involving non-lethal voltages in stand-alone (off-grid) system installations);

•                explicitly require that systems comply with applicable local and state or territory building, siting and grid connection requirements; and

•                require that documentary evidence of compliance with the above requirements be obtained and retained by the person creating RECs for the SGU installation.

Details on the Regulations are included in the Attachment.

Consultation

In developing these amendment Regulations, the Department of Climate Change and Energy Efficiency consulted with the Clean Energy Council (CEC), which is responsible for the accreditation of installers and represents the renewable energy industry. These amendment regulations reflect the feedback the CEC provided on the draft amendment Regulations.

Authority: Section 161 of the Renewable Energy (Electricity) Act 2000

 

Attachment

 

Details of the proposed Renewable Energy (Electricity) Amendment Regulations 2010 (No. 3)

Regulation 1 – Name of Regulations

This regulation provides that the title of the Regulations is the Renewable Energy (Electricity) Amendment Regulations 2010 (No. 3).

Regulation 2 – Commencement

This regulation provides for the Regulations to commence on 21 June 2010.

Regulation 3 – Amendment of Renewable Energy (Electricity) Regulations 2001

This regulation provides for Schedule 1 to the Regulations to amend the Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations).

Regulation 4 – Transitional

These transitional provisions set out lead-in times for application of the new requirements for different SGU technologies.

Subregulation 4(1) provides that the amended regulations apply to solar PV SGUs installed from 20 August 2010. This allows the Office of the Renewable Energy Regulator time to make required changes to the REC creation process through the REC registry.

Subregulation 4(2) allows a lead-in period of around six months for the industry to adjust to the enhanced requirements for wind and micro-hydro SGUs by providing that for these technologies, the amended regulations applies to units installed from 20 December 2010.

SCHEDULE 1 - AMENDMENTS

Items 1 and 2 – Subparagraphs 19D(2)(d)(ii) and (iii)

Items 1 and 2 remove from regulation 19D (Creation of Certificates for Small Generation Units) the existing requirement that designers and installers of certain SGUs for which RECs are created, must be accredited under the Australian Business Council for Sustainable Energy (ABCSE) or the Clean Energy Council (CEC) accreditation scheme. CEC is the successor organisation to ABCSE. The enhanced requirements around CEC and ABCSE accreditations are inserted by item 4 below.

Item 3 – Subregulation 20(1)

This item stipulates that creation of RECs for SGUs is subject to compliance with the requirements mentioned in new regulation 20AC inserted by item 4 below. This means that, for the purposes of subsection 23B(1) of the Act, unless all of the circumstances mentioned in regulation 20AC for an SGU installation exist, the number of RECs that may be created for an SGU is zero.

Item 4 - after regulation 20AB

Item 4 inserts a new regulation 20AC which, in accordance with subsection 23B(1) of the Act, prescribes the circumstances that must be met to enable creation of a quantity of RECs for a particular SGU.

Subregulation 20AC(2) has the effect of requiring that SGUs must be designed and installed by persons accredited by the CEC or ABCSE for all three types of SGU (solar PV, small wind and micro-hydro), and for all possible deeming periods (one year, five years and fifteen years). This provision also recognises that the CEC or ABCSE accreditation scheme provides separate accreditations for on‑grid and off-grid installations, as well as for different system types. Accordingly, this paragraph also clarifies that the CEC or ABCSE accreditation must be consistent with the installation context. For example, for a small wind system installed in a remote off-grid location, the installer must be accredited for off-grid installations of solar PV systems and this accreditation must also be endorsed by CEC or ABCSE, (after completion of CEC’s required training) for small wind systems.

Subregulation 20AC(3) requires, subject to the circumstances in subregulation 20AC(6) as outlined below, that the wiring associated with an installation is to be undertaken by an electrician with a valid, unrestricted licence for undertaking electrical work in the relevant state. This requirement provides explicit accountability under the RET scheme for the safety and quality of electrical wiring for all SGU technologies.

Subregulation 20AC(4) requires that all local and state government requirements must be met in relation to the SGU’s siting, attachment to a building or other structure, and connection to the grid. This provision provides additional assurance that installations receiving support through the RET scheme meet applicable:

•                state and local requirements, including for example, planning and developing approvals, dealing with, for example, visual and noise impacts particularly for small wind turbines;

•                state requirements relating to safe design of buildings and other structures, including compliance of mounting methods and hardware with design standards dealing with wind loads on structures, particularly in areas subject to high winds and cyclones; and

•                state safety and technical requirements, including approvals, concerning connection of the SGU to the electricity network.

Subregulation 20AC(5) complements subregulations 20AC(2) to (4) in requiring that for any certificates to be created for an SGU installation, the person creating them is to have obtained written statements and information comprising:

•                a written statement by the installer setting out the name(s) and CEC or ABCSE accreditation details (both classification and numerical identifier) of both the designer and installer (which could be the same person); and

•                a written statement by the owner or installer that the unit meets all applicable local, and state/territory requirements for siting, attachment to buildings/structures and grid connection; and

•                a copy of any documentation (usually a certificate of compliance and/or safety) required under state/territory legislation or regulations to be provided to the SGU owner certifying that the electrical installation of the unit meets all required safety and technical standards.

The Regulator may request to sight the documents, for compliance checking purposes, prior to registering the RECs (e.g. under subsection 26(6) of the Act).

Subregulation 20AC(6) provides that for off-grid installations, under specified, non‑hazardous circumstances, where safety risks are considered minimal, some or all of the wiring may be undertaken by a person who is not a licensed electrician.

The circumstances prescribed in subregulation 20AC(6) are consistent with the Australian electrical wiring standard (AS/NZS 3000 – Wiring Rules) which are referenced in state regulations covering safety and technical aspects of electrical work. These wiring rules prescribe lower limits on alternating current (AC) and direct current (DC) electricity voltages in electrical work, below which it is not required that a licensed electrician undertake the wiring. As such, for small off-grid systems, subregulation 20AC(6) requires that wiring which involves alternating current (AC) electricity of less than 50 Volts, or direct current (DC) electricity of less than 120 Volts, does not need to be installed by a licensed electrician. This allows flexibility for CEC/ABCSE-accredited installers of off-grid systems, who are not licensed electricians, to undertake the non-hazardous wiring themselves.

To provide assurance of compliance, in order for RECs to be created for installations where some or all of the electrical wiring was not installed by a licensed electrician in accordance with subregulation 20AC(3), subregulation 20AC(6) also requires that the person creating RECs must first obtain a written statement by the CEC/ABCSE-accredited installer which confirms that the installation is stand-alone (off-grid) and that all wiring where voltages will equal or exceed 50 volts ac and 120 volts DC has been undertaken by an electrician licensed as specified in subregulation 20AC(3).

Item 5 – After regulation 20B

This item inserts new regulation 20BA, empowered by section 160 of the Act, to clarify that the person who creates RECs for an SGU installation must keep any documents relevant to complying with regulation 20AC.