EXPLANATORY STATEMENT

Select Legislative Instrument 2010 No. 239

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

Renewable Energy (Electricity) Act 2000

Renewable Energy (Electricity) Amendment Regulations 2010 (No. 5 )

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 compliance regime that applies to certain small generation units (SGUs) eligible to create renewable energy certificates (RECs). The Regulations also clarify the application of a number of the requirements for partial exemptions provided in respect of emissions‑intensive trade-exposed activities under the Act.

The Act, as amended by the Renewable Energy (Electricity) Amendment Act 2010 (the Amendment Act) establishes the Renewable Energy Target (RET) scheme to encourage electricity generation from eligible energy sources. 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 entities’) 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 RECs by renewable energy generators, SGUs and solar water heaters. One REC generally represents one megawatt-hour (MWh) of electricity from eligible energy sources.

The Principal Regulations set out a number of conditions which must be met by the person entitled to create a REC for an SGU, including requirements for documentation. The Principal Regulations require that installers of SGUs must be accredited by the Clean Energy Council and, in certain circumstances, be a licensed electrician, in order to be eligible to create RECs.

The Regulations impose additional requirements to require that a person, who is entitled to create RECs for an SGU, must obtain a written statement by the installer of the unit stating that, for each of the specified Australian Standards, the installation complies with the standard. The Regulations also require the written statement to state whether the installer has appropriate public liability insurance and has complied with the Clean Energy Council’s (CEC) Code of Conduct.

The Regulations also implement new requirements under section 46D of the Act regarding the EITE partial exemption regime. The Regulations: give effect to an information gathering power for the Minister for Climate Change and Energy Efficiency to request information about EITE activities; amend the due date for applications for partial exemption certificates; and make a technical correction to the method for calculating the baseline for integrated lead and zinc production.

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 is a peak body representing the renewable energy industry, and with state and territory government electrical safety regulation authorities.

 

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

 

Attachment

 

Details of the proposed Renewable Energy (Electricity) Amendment Regulations 2010 (No. 5)

Regulation 1 – Name of Regulations

This regulation provides that the title of the Regulations is the Renewable Energy (Electricity) Amendment Regulations 2010 (No. 5).

Regulation 2 – Commencement

This regulation provides for the Regulations to commence on the day after they are registered.

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

This regulation sets out lead-in times for application of the new requirements for different small generation unit (SGU) technologies.

Subregulation 4(1) provides that the Regulations apply to SGUs that are solar photo-voltaic systems installed after 31 October 2010. This allows the Renewable Energy Regulator time to make required changes to the renewable energy certificate (REC) creation process through the REC registry.

Subregulation 4(2) allows a lead-in period of around three months for the industry to adjust to the enhanced requirements for wind and micro-hydro SGUs by providing that for these technologies, the Regulations apply to units installed after 19 December 2010.

SCHEDULE 1 - AMENDMENTS

Item 1 – Subregulation 3 (1), after definition of Act

Item 1 inserts a definition for the terms ‘AS’, ‘AS/NZS’ or ‘Australian Standard’ as they relate to the standards issued by Standards Australia Limited. Standards Australia is recognised by the Government as Australia's peak standards body. More information can be found at www.standards.org.au.

Item 2 – After subparagraph 20AC(5)(a)(ii)

Item 2 inserts new subparagraphs 20AC(5)(a)(iii) and (iv) at the end of paragraph 20AC(5)(a), to impose additional requirements for the creation of RECs for SGUs.

Paragraph 20AC(5)(a) currently provides that before any RECs are created for the SGU, the person who is entitled to create the RECs for the unit must obtain a written statement by the installer of the unit stating the name of the designer and installer of the unit and the Business Council for Sustainable Energy (BCSE) or Clean Energy Council (CEC) accreditation classification and number.

The item extends this requirement to also include in the written statement that the installer has public liability insurance of at least $5 million, and that the installer has complied with the CEC’s Code of Conduct in relation to the installation.

Compliance with the Code of Conduct and public liability insurance are already mandatory requirements for installers who have been accredited under the CEC accreditation scheme. As CEC accreditation is already mandatory for installers of SGUs under subregulation 20AC(2), this item has the effect of establishing requirements directly in the Principal Regulations, currently required by way of CEC accreditation, thereby clarifying requirements for installers.

Item 3 – Paragraph 20AC(5)(c)

Item 3 amends paragraph 20AC(5)(c) to accommodate the insertion of new paragraphs at the end of the regulation which are made by item 4 below.

Item 4 – After paragraph 20AC(5)(c)

Item 4 inserts new paragraphs into regulation 20AC to impose additional requirements for the creation of RECs for SGUs. In summary, the provisions provide that before any RECs are created for the SGU, the person who is entitled to create the RECs for the unit must obtain a written statement by the installer of the unit stating that for each of the Australian Standards mentioned, the unit and its installation comply with the standard.

Paragraph 20AC(5)(d) requires a written statement from the installer of a unit that an SGU complies with the named Australian Standards, as in force from time-to-time. These are AS/NZS 3000:2007, AS/NZS 1768:2007 and, where the unit is an on-grid system, AS 4777‑2005.

Paragraph 20AC(5)(e) requires a written statement by the installer of a solar photovoltaic system that the unit complies with specified Australian Standards as in force from time-to-time, uses modules which are listed on the CEC website, and uses a grid-connected inverter of a model type published on a list published on the CEC website. The specified Australian standards are AS/NZS 5033:2005, AS/NZS 1170.2:2002, AS/NZS 4509.1:2009 and AS 4086.2‑1997. The CEC website is http://www.cleanenergycouncil.org.au and the relevant page for the two documents is http://www.cleanenergycouncil.org.au/cec/accreditation/Solar-PV-accreditation/approvedproducts.html.

Paragraph 20AC(5)(f) requires a written statement by the installer of a wind system that the unit complies with specified standards. These are AS/NZS 1170.2:2002, AS/NZS 4509.1:2009 and AS 4086.2–1997.

It is noted that the standards themselves have different rules for different situations. If part of a standard did not apply in a particular circumstance, this could be explained in the statement and the installation would still comply with the standard. For example, AS/NZS 5033 does not necessarily apply to solar installations above 30 kilowatt, but states that similar principles would apply to those installations.

 

False or misleading statements made by the installer under this provision could be a breach of section 137.1 of the Criminal Code and would be a reason to refuse to validate the certificates created in relation to the installation.

Item 5 – Subregulation 22W(1)

Item 5 amends the due date for applications made under subsection 46A(1) of the Act for a partial exemption certificate in relation to the 2010 compliance year for particular classes of persons described by regulations 22G to 22K. The amendment changes the deadline for such applications from 31 October 2010 to 1 December 2010. This is to allow sufficient time for relevant applications to be made.

Item 6 – Subregulation 22W(2)

Item 6 amends the due date for applications made under subsection 46A(1) of the Act for a partial exemption certificate in relation to the 2010 compliance year for particular classes of persons described by regulations 22L and 22M (namely where a liable entity changes or where there are two liable entities at the same site). The amendment changes the deadline for such applications from 1 January 2011 to 14 January 2011.

Item 7 – Subregulation 22X(1)

Item 7 amends the due date for applications made under subsection 46A(1) of the Act for a partial exemption certificate in relation to the compliance years after 2010 (i.e. from 2011) for particular classes of persons described by regulations 22G to 22K. The amendment changes the deadline for such applications from 1 January to 31 March of the year to which the application relates. For example, applications for 2011 are now not due until 31 March 2011. This would not preclude earlier applications being made.

Item 8 – After Part 3A, Division 8

This item inserts new Division 8A into the Principal Regulations to give effect to section 46D of the Act.

Section 46D of the Act provides an information gathering power for the Minister to request information about emissions-intensive trade-exposed (EITE) activities. However, the power is to be constrained by regulations specifying the types of information received by the Department of Climate Change and Energy Efficiency.

Subregulation 22ZSA of Division 8A provides that the information that must be received to trigger the power must be about all of the following:

•                the emissions of greenhouse gases for the activity;

•                the electricity used by the activity; and

•                the revenue generated by the activity.

This includes a submission of historical data or an expert consultancy report about a future activity that is currently not being undertaken in Australia.

Item 9 – Schedule 6, subitem 625(2)

Item 9 makes a technical amendment to the basis for calculating the amount of a liable entity’s partial exemption for integrated lead and zinc production. The amendment will ensure that the units of production reportable by a prescribed person when applying for a partial exemption match the units of production submitted by industry and used by the Government in calculating assistance rates for this output.