|
|||
|
|||
|
 |
|
|
Year |
Required additional GWh |
|---|---|
|
2001 |
400 |
|
2002 |
1100 |
|
2003 |
1800 |
|
2004 |
2600 |
|
2005 |
3400 |
|
2006 |
4500 |
|
2007 |
5600 |
|
2008 |
6800 |
|
2009 |
8100 |
|
2010 |
9500 |
Source: The Australian Greenhouse Office
It is intended that the 12.7 per cent target will then remain constant throughout the period from 2010 to 2020.
Some appreciation of the magnitude of the task is gained if one looks at the present level of installed renewable electricity generation capacity as shown in Figure 3.
Figure 3: Australian installed electricity generation capacity (renewables)
Source: The Australian Greenhouse Office
Note the logarithmic scale in the above figure and that electricity from hydro generation is ten times greater than from other renewable energy sources. Present electricity generation from renewables is around 16 000 GWh per annum and the target will raise Australia's renewable contribution to some 25 500 GWh per annum in 2010. The bulk of present generation from renewable sources as is indicated in Figure 3 comes from large scale hydro with the next major contributor, mini-hydro, although of an order of magnitide much smaller. The bulk of new renewable sources will probably include bagasse, solar (including hot water systems) and wind which presently contribute only very small amounts. There is little liklihood that there will be further large scale hydro developments such as the Snowy scheme and the Hydro-Electric Corporation scheme in Tasmania because of large scale opposition to any further major dams in Australia and the perceived environmental problems. Also, most of the areas where any dams may have been considered for Tasmania now lie in world heritage areas.
The economic cost of the 2 per cent renewable energy measure
Renewable electricty (apart from large scale hydro schemes currently in place) is of an order of magnitude more expensive than electricity generated from present conventional means. Costs have been declining with the introduction of newer technologies, but these still remain much higher than electricity generated from conventional means. However, it is envisaged that costs for renewable energy will continue to decline as investment in these areas ramp up to cater for the new supply requirement.
The Electricity Supply Association of Australia (ESAA) estimates the 2 per cent renewable measure, which aims to have 9 500 GWh of new renewable power produced annually in 2010, will require $3 billion in capital outlays and will add $300 million per year (plus GST) to electricity charges. The ESAA estimates that some 3000 MW of new renewable energy generation capacity will need to be constructed.
The ESAA has urged the Senate to accept the mandated renewable energy measure.(4)
As a signatory to the 1997 Kyoto Protocol, Australia has an undertaking to limit greenhouse gas emissions growth to an 8 per cent increase on a 1990 base level. A number of industry and government stakeholders have suggested that the 2 per cent measure will result in annual savings of 6 to 7 million tonnes a year in savings of greenhouse gas emissions.(5) Whilst this is not a large contribution in terms of absolute savings when one considers Australia's total emissions in 1997 were 431 million tonnes, it will be an important contributor. Also, in addition to the contribution to reducing greenhouse gas emissions, the 2 per cent measure is expected to greatly assist the development of an important and growing worldwide sustainable energy industry.
By way of comparison, the largest potential renewable energy markets in developed countries are in Europe. The European Commission has set a target of doubling to 12 per cent the contribution of renewable energy to Europe's energy needs by 2010. Europe is also a large market for wind generation. The European market is expected to grow from 4 780 MW in 1997 to 10 000 MW by 2000, at an average growth rate of 22 per cent. Major wind markets are Germany, Denmark, Spain, the Netherlands and the UK. Denmark is the dominant exporter. There is also a large potential for wind in the US, for new, large machines to replace older, smaller units dating from the 1980s but the overall market growth is low.
The International Energy Agency (IEA) predicts global electricity generation will grow by an average of 3 per cent per year between 1995 and 2020. By 2010, the IEA projects electricity generation capacity will have increased to 4556 GWh, an increase of almost 48 per cent from 1995. Renewables (other than hydro) is expected to increase to 43 GWh (or 43 000 MWh) in 2010 compared to 13 GWh in 1995 (an increase of over 230 per cent).
Part 2 deals with renewable energy certificates ('certificates').
The purpose of these certificates is to enable 'liable entities'(6) to avoid or reduce the amount of renewable energy shortfall charge (shortfall charge) that they have to pay when they acquire electricity. The liable entities will generally acquire the certificates by purchasing them. The certificates are created by operators who generate power from accredited power stations using renewable energy sources where the amount generated exceeds the relevant 1997 eligible renewable power base line.
Clauses 9-12 cover the process for registration for persons wishing to be eligible to create certificates. Applications for registration are dealt with by the Renewable Energy Regulator (the 'Regulator').
Clauses 13-17 covers the process for obtaining accreditation of electricity generating power stations for the purpose of creating certificates. The main condition for eligibility under subclause 14(2) is that the power station, or elements of it, generates some or all of its power from an 'eligible renewable power source'. Clause 17 provides that 'eligible renewable energy sources' are to be defined by regulations. It also says that fossil fuels and waste products derived from fossil fuels cannot be eligible sources.
Clauses 18 -24 deal with the creation of certificates. Clause 18 provides that a registered person may create a certificate for every 1 megawatt hour (MWh) of electricity generated by an accredited station from eligible renewable sources that is in excess of the stations 1997 baseline. Clauses 21-23 provide that certificates can also be created by solar hotwater heaters if they are installed on or after 1 January 2001 and 'displace' electricity usage from non-renewable sources. Much of the detail regarding solar hotwater heater certificates are to be decided by regulations. The improper (ie unlawful) creation of certificates is dealt with in Clause 24. Penalties are imposed both according to how many certificates are improperly created and whether the offence is a strict liability offence(7) or criminal offence. For example, improperly creating 10 certificates could result of a penalty of up to $1 100 for a strict liability offence and $5 500 for a criminal offence. The maximum penalty for improperly creating 100 certificates would be 10 times greater, ie $11 000 and $55 000 respectively.
Clauses 27-28 provide that certificates may be transferred (eg sold) from one person to another, providing the Regulator is advised of the transfer once it has occurred.
Part 3 deals with the acquisition of energy. Essentially this sets out what entities will be 'liable entities' and thus be required to either purchase additional electricity from renewable energy sources or pay a financial penalty (see Part 4). There are a few circumstances where what would otherwise be a liable entity purchase does not give rise to liability under the Bill. The most important are:(8)
Part 4 deals with the situation where a liable entity does not have enough certificates to demonstrate that it has bought the prescribed level of energy from renewable sources. If it has such a shortfall, it must pay a renewable energy certificate shortfall charge (shortfall charge).
Under clause 37, the amount to be paid is calculated by multiplying the shortfall (itself calculated by clause 38) by 'the rate of charge' set out in the Renewable Energy (Electricity) Charge Bill 2000. The latter Bill sets this at $40 per MWh.
Clause 42 makes it clear that while the Commonwealth (including any Commonwealth agency or authority) is not legally obliged to pay any Part 4 shortfall in the same way as non-Commonwealth entities are, the Minister for Finance may give certain directions for the transfer of funds between various Commonwealth accounts. The practical effect is of this is that the Minister for Finance may require Commonwealth departments, agencies or authorities to account for any shortfall charges in their budgets.
Part 5 covers the annual lodging of an assessment of energy acquisition statements and renewable energy shortfall statements by liable entities. In broad terms, the purpose of these statements is to allow the Regulator to assess the liability of the entity to any shortfall charges and related issues. The reporting of shortfalls to the Regulator is through a chiefly self-assessment process. In particular, clause 47 specifies that if a liable entity lodges a renewable energy shortfall statement, and has not previously lodged a shortfall statement for that year with the Regulator, that statement shall be taken to be the assessment of a liable entity's shortfall and the charge payable on that shortfall. However the Regulator can amend an assessment (clause 49), or make a default assessment if the Regulator considers that the entity is liable for a shortfall charge but has not lodged a shortfall statement (clause 48).
Part 6 deals with objections, reviews and appeals of Part 5 renewable energy shortfall assessments and charges.
Only the liable entity can object to the assessment. There are no prescribed grounds for an objection. In general, it must be made within sixty days of the Part 5 assessment, although this can be extended (Clause 55 and 57). The Regulator has sixty days to make a decision on the objection - the 'objection decision' (clause 59).
Clause 60 provides that an application for review or appeal against the Regulator's objection decision can be made either to the Administrative Appeals Tribunal (AAT) or the Federal Court. It is not immediately obvious why the Bill gives the choice of two avenues for review or appeal. It appears that the Federal Court may undertake a merits review and substitute its own decision as to a shortfall assessment. Clause 61 provides that the burden of proof in such appeals lies with the liable entity.
A range of other procedural decisions by the Regulator (such as the accreditation of a power station) are reviewable by the AAT (subclause 66(5)).
Part 7 deals with the collection, recovery and refunding of the shortfall charge.
Clause 67 provides that the annual charge is due on the 14 February the following year,(9) or when the shortfall statement is lodged, whichever is the later. Interest is payable on unpaid charges (clause 70). The Regulator may sue for the recovery of an unpaid charge (clause 71),
The Regulator may also collect unpaid charges and related debts from third persons, liquidators, receivers, deceased estates etc. For example, in the case of third persons, if a liable entity has failed to pay a shortfall charge but is owed or may in the future be owed money by another person, the Regulator may require that person to pay that money to the Regulator rather than to the entity (clause 73). Failure to comply with the Regulator's notice on this is subject to a court imposed penalty of $3,300 on conviction (clause 76).
Part 8 deals refunding shortfall charges where the liable entity surrenders certificates to the Regulator.
The effect of clauses 95-98 is that where a entity has paid a shortfall charge (because it did not have enough certificates to demonstrate that it has bought the prescribed level of energy from renewable sources) in previous years (but not more than 3 years previously) it can in certain circumstances get a refund if it surrenders to the Regulator certificates to the value of that charge.
Part 9 deals with penalties if the entity fails to provide certain statements or information relating to the shortfall charge assessments as required under the Bill or makes false or misleading statements. It is not applicable to Government bodies.
Clause 99 covers situations in which the entity fails to provide statements or information required under the Bill. The penalty is double the shortfall charge that the entity is liable for.
Clause 100 covers the making of false or misleading statements by the entity. The penalty is double the difference between the shortfall charge based on the false or misleading claim and the charge based on the true situation (assuming the false or misleading statement resulted or would have resulted in smaller shortfall charge).
Part 10 provides that the Regulator is responsible for the administration of the Act (clause 104) and at the end of each year must give the relevant Minister a report for presentation to Parliament (clause 105).
Part 11 deals with the auditing of persons registered under the Act and liable entities.
Key provisions under Part 11 are those covering search warrants (clause 125) and the powers of authorised officers in conducting searches (clauses 111-112).
Warrants to enter and search premises can only be issued by magistrates. The grounds for issuing a warrant is that the magistrate is satisfied, by information on oath, that it is reasonably necessary that one or more authorised officers have access to the premises for the purposes of substantiating information provided under the proposed Act or of determining whether the proposed Act has been complied with.
Authorised officers operating under a warrant may inspect and copy any thing that relates to information relevant to the proposed Act. They may also seize things if so authorised by a warrant. Authorised officers operating under a warrant may require any person on the premises to answer questions or produce any document or thing that relates to information relevant to the Act unless this might tend to incriminate the person or expose them to a penalty.(10) Any failure to do so except under the self-incrimination defence carries a maximum penalty of six months imprisonment. Knowingly giving false or misleading answers or documents(11) carries a maximum of twelve months imprisonment.
Part 12 covers the requirements of the Regulator, their employees or other persons in protecting confidential information.
Part 14 deals with the position of the Regulator and the Office of the Regulator. The Regulator is appointed by the Minister for Environment and Heritage for a term specified at appointment (clause 143). However, that term cannot be more than 7 years.
Under clause 147, the Minister may terminate the Regulator's appointment on grounds on misbehaviour or physical or mental incapacity, or because of defined absence without leave, or because they engage in other paid employment without the Minister's approval. The Minister must terminate the Regulator's appointment if they become bankrupt, seeks legal relief from bankruptcy etc.
The Minister may appoint a person as acting Regulator where there is a vacancy, or the regulator is absent from duty or 'for any reason' unable to perform the duties of the office (clause 148).
Part 15 is a general provision relating to offences. Clause 152 specifies that the Criminal Code applies to all offences under the Act. Clause 153 provides a penalty of 12 months imprisonment for knowingly giving false or misleading information to a person performing functions under the Act. A failure to provide documents to the Regulator or another authorised person if required under the Act carries penalty of up to $3 300 for strictly liability or 6 months jail if charged under Criminal Code.
Part 16 covers miscellaneous items.
Clause 155 allows the Regulator to employ any person to assist with any of the Regulator's functions.
Subclause 156(1) deals with delegation. Any senior officer(12) of the Regulator's office may be delegated by the Regulator to perform any of his / her functions or powers. The delegation must be in writing. Subclause 156(2) allows the Regulator to delegate a limited range of his / her functions or powers. Note there appears to be an error in that paragraph 156(2)(b) refers to Part 9A. There is no Part 9A in the Bill as drafted.
Clause 161 provides for the making of regulations, including those dealing with penalties of up to $5 500.
Subsequent to the initial drafting of this digest in late June, the Bill was referred to the Senate Environment, Communications, Information Technology and the Arts References Committee.(13) The Committee is due to report on 15 August.
Public Hearings were held in Canberra on 13 and 14 July 2000. Almost 20 organisations provided evidence to the hearings. From a legal perspective, the evidence of Dr Harry Schaap of the Electricity Supply Association of Australia is of particular interest. Noting that ESAA had had very little time to consider the Bill in any detail, Dr Schapp flagged that a number of both broad and specific issues had been referred to ESAA's legal counsel for advice. The broader issues included:(14)
The more specific issues included:
Angus Martyn and Mike Roarty
9 August 2000
Bills Digest Service
Information and Research Services
This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.
ISSN 1328-8091
© Commonwealth of Australia 2000
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Published by the Department of the Parliamentary Library, 2000.
