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2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Renewable Energy (Electricity) (Charge) Amendment Bill 2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Climate Change, Energy
Efficiency and Water,
Senator the Honourable Penelope Ying Yen Wong)
Renewable Energy (Electricity) (Charge)
Amendment Bill 2010
GENERAL OUTLINE
The purpose of the Renewable Energy (Electricity) (Charge) Amendment
Bill 2010 (the Bill) is to support the separation of the Renewable Energy
Target (RET) scheme into two parts - the Large-scale Renewable Energy
Target (LRET) and the Small-scale Renewable Energy Scheme (SRES) - outlined
in the Renewable Energy (Electricity) Amendment Bill 2010. The changes will
provide greater certainty for households, large-scale renewable energy
projects and installers of small-scale renewable energy systems such as
solar panels and solar water heaters. The enhanced scheme will further
strengthen the Government's commitment that the equivalent of at least 20
per cent of Australia's electricity will come from renewable sources by
2020.
In particular, the Bill will establish the rate of charge to be used in the
calculation of the taxation liability assessed under Subdivision B of
Division 1of Part 4 of the Renewable Energy (Electricity) Act 2000.
Background
The legislation underpinning the scheme comprises the Renewable Energy
(Electricity) Act 2000 (the Act); the Renewable Energy (Electricity) Charge
Act 2000 (the Charge Act); and the Renewable Energy (Electricity)
Regulations 2001 (the Regulations).
Under the Act, wholesale purchasers of electricity ('liable entities') are
required to meet a share of the renewable energy target in proportion to
their share of the national wholesale electricity market. The Act provides
for the creation of Renewable Energy Certificates (RECs) by generators of
renewable energy. One REC generally represents one megawatt-hour (MWh) of
electricity from eligible renewable energy sources. Installations of solar
water heaters and small generation units (including rooftop solar panels,
small wind turbines and micro-hydro systems) are able to create RECs under
deeming arrangements prescribed in the Regulations. Once registered, the
RECs are able to be traded and sold to liable entities who may surrender
them to the Regulator to demonstrate their compliance under the scheme and
avoid paying the shortfall charge. The Charge Act sets the level of the
shortfall charge for non-compliance.
Details of the Bill are set out in the Attachment.
Financial Impact Statement
Refer to the statement in the Explanatory Memorandum for the Renewable
Energy (Electricity) Amendment Bill 2010.
NOTES ON INDIVIDUAL CLAUSES
Clause 1 - Short Title
1. This clause is a formal provision specifying the title of the amendment
Act.
Clause 2 - Commencement
2. This clause sets out that section 1 to 3 of the Act will commence on
the day the Bill receives the Royal Assent and that the items in
Schedule 1 will commence at the same time Part 1 of Schedule 1 to the
Renewable Energy (Electricity) Amendment Act 2010 commences (1 January
2011).
Clause 3 - Schedule(s)
3. This is a formal clause providing that each Act specified in the
Schedule is amended or repealed as set out in the applicable items in
the Schedule, and other items in the Schedule have effect according to
its terms.
SCHEDULE 1 - AMENDMENTS
Renewable Energy (Electricity) (Charge) Act 2000
1. - Title
4. This item replaces the term renewable energy certificate charge, with
large-scale generation shortfall charge in the long title to the Act.
This recognises that the Act will now deal separately with large-scale
liability under the Renewable Energy (Electricity) Act 2000 and that
the Renewable Energy (Electricity) (Small-scale Technology Shortfall
Charge) Act 2010 will impose liability in relation to the small-scale
liability under the Renewable Energy (Electricity) Act 2000.
2. - Section 1
5. This item replaces the term Charge with large-scale generation
shortfall charge in the short title to the Act. Accordingly, from 1
January 2011 the Act will be known as the Renewable Energy
(Electricity) (Large-scale Generation Shortfall Charge) Act 2000.
3. - Section 5
6. This item amends section 5 to refer to the new term large-scale
generation shortfall charge. Accordingly, section 5 will impose the
taxation liability assessed under Subdivision B of Division 1of Part 4
of the Renewable Energy (Electricity) Act 2000.
4. - Application of amendments
7. This item clarifies that the $65 large-scale generation shortfall
charge applies to shortfalls that occur in the calendar years between 1
January 2011 and 31 December 2030. Accordingly, the unamended Act will
continue to apply to the 2010 liability which is assessed by
14 February 2011 in a liable entity's energy acquisition statement and
in relation to any liability for any earlier year which has not been
resolved.