Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

RENEWABLE ENERGY (ELECTRICITY) AMENDMENT (PERCENTAGES) REGULATIONS 2017 (F2017L00322)

EXPLANATORY STATEMENT

Minute No.     of 2017 - Minister for the Environment and Energy

Issued by authority of the Minister for the Environment and Energy

Renewable Energy (Electricity) Act 2000

Renewable Energy (Electricity) Amendment (Percentages) Regulations 2017

The Renewable Energy (Electricity) Act 2000 (the Act), as established, provides the framework for the implementation of the Government's Mandatory Renewable Energy Target (MRET) announced in 1997. An objective of the Act is to encourage the additional generation of electricity from renewable sources.

Section 161 of 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.

The Act has been amended several times. From 1 January 2011 the MRET split into the large-scale renewable energy target (LRET) and small-scale renewable energy scheme (SRES). Both schemes establish a certificate market in their own right.

Under the Act, wholesale purchasers of electricity (the 'liable entities') are required to meet a share of the LRET and SRES in proportion to their share of the national wholesale electricity market. The Act provides for the creation of large-scale generation certificates (LGCs) from accredited renewable energy power stations and the creation of small-scale technology certificates (STCs) from eligible solar water heaters and small generation unit installations.

The purpose of the Renewable Energy (Electricity) Amendment (Percentages) Regulation 2017 (the Regulations) is to amend the Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations) to specify the LRET Renewable Power Percentage (RPP) for 2017 and to prescribe the SRES Small-scale Technology Percentage (STP) for 2017.

The Regulations specify the RPP for 2017 which when used in a set formula calculates the number of LGCs that liable entities have to surrender to the Clean Energy Regulator to avoid a shortfall charge. The RPP for 2017 is 14.22 per cent, increasing from 12.75 per cent in 2016. The RPP has increased in line with legislated LRET targets.

Subsection 39(1) of the Act provides that the RPP for a given year is the percentage specified in the regulations on or before 31 March in that year. The Minister must take into consideration several items under subsection 39(3) of the Act before the Governor General makes the regulations under subsection 39(1).

The Regulations also prescribe the STP for 2017, which when used in a set formula calculates the number of STCs that liable entities have to surrender quarterly to the Clean Energy Regulator to avoid a shortfall charge. The STP for 2017 is 7.01 per cent, decreasing from 9.68 per cent in 2016. The STP for 2017 is lower than the STP for 2016 as it has been adjusted for the items required to be considered under subsection 40A(3) of the Act.

Subsection 40A(1) of the Act provides that the STP for a given year is the percentage prescribed in the regulations on or before 31 March in that year. The Minister must take into consideration several items under subsection 40A(3) of the Act before the Governor-General makes the regulations under subsection 40A(1).

The Regulations allow the:

•                 2017 RPP of 14.22 per cent to be set under Regulation 23. Regulation 23 to the Principal Regulations is amended every twelve months. The amendment is machinery in nature and does not substantially alter the existing legislative arrangements of the Act and the Principal Regulations; and

•                 2017 STP of 7.01 per cent to be set under Regulation 23A. Regulation 23A to the Principal Regulations is amended every twelve months. The amendment is machinery in nature and does not substantially alter the existing legislative arrangements of the Act and Principal Regulations. 

Consequently a public consultation period was not conducted for the Regulations.

The Regulations will be, and will be registered as, a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations will be compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  A Statement of Compatibility with Human Rights was completed (Attachment A).

The Regulations will commence on the day after it is registered on the Federal Register of Legislation.

Authority:  Subsections 39(1) and 40A(1) of the Renewable Energy (Electricity) Act 2000

Minister for the Environment and Energy

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Renewable Energy (Electricity) Amendment (Percentages) Regulations 2017

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The amendment to the Renewable Energy (Electricity) Regulations 2001 (the Regulations) is required to set the Renewable Power Percentage (RPP) and the Small-scale Technology Percentage (STP) for 2017. The 2017 RPP is 14.22 per cent which has increased from 12.75 per cent for 2016. The 2017 STP is 7.01 per cent which has decreased from 9.68 per cent for 2016.

The RPP sets the rate of liability for the given compliance year under the Large-scale Renewable Energy Target (LRET). The STP sets the rate of liability for the given compliance year under the Small-scale Renewable Energy Scheme (SRES). The Regulations prescribing the RPP and STP must be made on or before 31 March.

The setting of the RPP and STP is considered minor and machinery as the percentages are an administrative requirement under section 39 and section 40A of the Renewable Energy (Electricity) Act 2000 (the Act) respectively, to achieve the objectives of the Act which is to increase Australia's renewable energy by setting targets. The Act requires entities that make relevant acquisitions of electricity to surrender certificates created from accredited renewable energy power stations. The Act also requires entities that make relevant acquisitions of electricity to surrender certificates created by entities, individuals or companies from small unit installations, namely solar water heaters and small photovoltaic (solar), wind and hydro generation systems.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Minister for the Environment and Energy