Bills Digest no. 180 2009–10
Renewable Energy (Electricity) (Small-scale Technology
Shortfall Charge) Bill 2010
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Renewable Energy (Electricity) (Small-scale
Technology Shortfall Charge) Bill 2010
Date introduced: 12 May 2010
House: House
of Representatives
Portfolio: Climate Change, Energy Efficiency and Water
Commencement: Sections 1 and 2 on Royal Assent. Sections 3 to 7
commence at the same time as Part 1 of Schedule 1 of the Renewable
Energy (Electricity) Amendment Bill 2010, that is, 1 January
2011.[1]
Links: The
links to the Bill, its Explanatory Memorandum and second
reading speech can be found on the Bills page, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
Relating to the generation of
electricity from small-scale renewable energy projects, the
Renewable Energy (Electricity) (Small-scale Technology Shortfall
Charge) Bill 2010 (the Bill) sets the rate of charge payable under
the Renewable Energy (Electricity) (Charge) Act 2000 (the
Charge Act). It sets the small-scale renewable energy shortfall
charge at $65.
This Bill supports the amendments outlined in the Renewable
Energy (Electricity) Amendment Bill 2010 to separate the existing
Renewable Energy Target (RET) scheme into two parts: the
Large-scale Renewable Energy Target (LRET) and the Small-scale
Renewable Energy Scheme (SRES). Details and background on the
enhanced RET (eRET) scheme, the LRET and the SRES are contained in
the Digest
of the Renewable Energy (Electricity) Amendment Bill 2010.[2]
Under the current RET scheme, liable entities (electricity
retailers and other wholesale electricity buyers) that fail to
surrender sufficient ‘renewable energy certificates’
(RECs) to the relevant Commonwealth regulatory body must pay a
‘shortfall’ charge of $65 per mega-watt hour. The REC
liability is calculated as a percentage of the electricity
purchased or generated, and known as the renewable power percentage
(RPP). The RPP encompasses both large-scale and small-scale
generation of renewable energy for electricity.
Under the proposed eRET, liable entities will still have to
surrender the relevant numbers of RECs or face a shortfall charge.
They will be required to surrender RECs generated both
under the LRET (such RECs are known as LRECs) and or SRES (such
RECs are known as SRECs). This Bill specifies that the shortfall
charge in relation to SRECs, is $65, the same as both the charge
under the existing RET scheme and the charge that will apply for
LRECs. The charge relating to LRECs is to be set by a companion
Bill, the Renewable Energy (Electricity) (Charge) Amendment Bill
2010.
The splitting of the SREC and LRET shortfall charges into
separate legislative devices could potentially allow future
flexibility in altering one independently of the other.
Financial implications
The relevant part of the Explanatory Memorandum refers readers
to the Explanatory Memorandum for the Renewable Energy
(Electricity) Amendment Bill 2010, which states:
The Office of the Renewable Energy Regulator
(ORER) will receive an additional $6 million in 2010-11 to
implement the changes outlined in this Bill. This includes $4.5
million in capital funding to modify and expand the existing
information technology system to enable the ORER to implement the
clearing house functions.
The impact on Government revenue is dependent
on any change in the number of renewable energy certificates that
are traded. Administered revenue is received by the ORER from a
number of statutory fees including fees for the creation and
surrender of renewable energy certificates.[3]
Clause 3
makes it clear that identical expressions used in this Act and the
Renewable Energy (Electricity) Act 2000 will have the same
meaning.
Clause 4
provides that, while the Act will not bind the Crown in right of
the Commonwealth, it will bind the Crown in right of each of the
States, the Australian Capital Territory and the Northern
Territory.
Clause 5
imposes the small-scale technology shortfall charge that is payable
under the Renewable Energy (Electricity) Act 2000.
Clause 6
establishes a separate rate of shortfall charge (penalty) at $65
per megawatt hour for the failure to surrender a mandated quantity
of RECs annually.
Clause 7 makes it clear that the Act does not
impose a tax on ‘property of any kind, belonging to a
State’.[4]
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2421.
Anita Talberg and Juli Tomaras
16 June 2010
Bills Digest Service
Parliamentary Library
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