2004-2005-2006-2007

The Parliament of the

Commonwealth of Australia

THE SENATE

Presented and read a first time

National Market Driven Energy Efficiency Target Bill 2007

No.      , 2007

(Senator Allison)

A Bill for an Act to create incentives and a market for energy savings, which are additional to energy efficiency activities set by minimum energy performance regulation, through energy efficiency certificate trading, and for related purposes

 

Contents

 

A Bill for an Act to create incentives and a market for energy savings, which are additional to energy efficiency activities set by minimum energy performance regulation, through energy efficiency certificate trading, and for related purposes

The Parliament of Australia enacts:

 

1  Short Title

This Act may be cited as the National Market Driven Energy Efficiency Target Act 2007

2  Purpose

The purpose of this Act is to promote the adoption of greater energy efficiencies and cost effective greenhouse gas abatement by:

(a) recognising large energy efficiency improvement opportunities;

(b) facilitating investment in energy efficiency activities;

(c) addressing the failure of the energy market to deliver cost effective energy efficiency activities;

(d) completing the energy market through the establishment of a market for energy efficiency and energy savings activities;

(e) introducing a mandated National Market Driven Energy Efficiency Target (NMDEET);

(f) providing for the creation, acquisition and trading of Energy Efficiency Certificates (EECs) which represent accredited eligible energy savings;

(g) establishing accreditation methodologies to result in only high quality energy efficiency activities while minimising administration costs and burdens;

(h) creating a demand for energy efficiency activities by requiring certain purchasers (called liable entities) to surrender a specified number of certificates for the electricity that they acquire during a year.

3  Commencement

This Act commences on 1 January 2008.

Note: In accordance with section 4 of the Renewable Energy (Electricity) Act 2000, no liabilities will accrue under this Act after 1 January 2021.

4  Schedules

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

 

Schedule 1--Amendment of the Renewable Energy (Electricity) Act 2000

1  At the end of section 3

Add:

(d) to result in greater energy efficiency and reduction in energy waste; and

(e) to encourage investment in energy efficiency activities and the development of energy efficiency technologies; and

(f) to reduce the energy intensity and greenhouse gas emission intensity of the Australian economy; and

(g) to contribute to the improvement of Australia's productivity and energy security; and

(h) to reduce Australia's overall greenhouse gas emissions.

This is achieved by:

(i) providing a system for recognising eligible energy efficiency activities;

(j) creating and issuing tradeable certificates (energy efficiency certificates - EECs) for eligible energy efficiency savings;

(k) specifying who is eligible for such a certificate;

(l) setting a national energy efficiency target (the National Market Driven Energy Efficiency Target (NMDEET);

(m) requiring certain purchasers (liable entities) to surrender a specified number of certificates for the electricity that they acquire during a year. Where a liable entity does not have enough certificates to surrender, the liable entity will have to pay the energy efficiency shortfall charge.

2  Subsection 5(1)

Insert:

baseline or energy efficiency activity baseline means the energy consumption before the implementation of the eligible energy efficiency activity. 

certified performance means a type of eligible energy efficiency activity that can be measured and accredited in accordance with section 30T.

discount factor means the factor applied to the energy savings from an eligible energy efficiency activity to reflect varying operational behaviours, or the confidence level associated with the eligible energy efficiency activity. 

eligible energy efficiency activity is an activity provided for in Division 3.

energy efficiency certificate (EEC) means an energy efficiency certificate created under Part 2A.

energy efficiency shortfall charge has the meaning given by section 38A

energy efficiency target percentage means the percentage fixed under section 40A.

energy saving means the energy saved after the implementation of the eligible energy efficiency activity. 

MJ means a megajoule.

system boundary has the meaning given in the regulations.

verified performance means a type of energy efficiency activity that can be measured in accordance with section 30T.

3  After Part 2

Insert:

Part 2A--Energy Efficiency Certificates

Division 1--Preliminary

30H  Overview of Part

This Part provides for the creation, trading and extinguishing of energy efficiency certificates (EECs).

EECs are used to commoditise the energy saving due to the energy efficiency activity and allow trading. Trading of EECs will have the effect of equalising the marginal cost of compliance among the liable entities.

EECs may be created by registered persons who operate or own an eligible energy efficiency activity and are accredited by the Regulator. A person may apply to the Regulator for accreditation. Accredited participants include but are not limited to the following:

(a) energy consumers from all sectors of the economy (commercial, industrial, and domestic sectors);

(b) intermediaries or aggregators, for example energy service companies or energy retailers;

(c) local government or municipal utilities;

(d) liable entities who invest directly in an eligible energy efficiency activity.

A liable entity is required to obtain and acquit EECs to the Regulator (refer to section 38A). A liable entity will acquire an EEC by:

(a) purchasing it; or

(b) investing directly in an eligible and accredited energy efficiency activity.

A person must be registered in accordance with Division 2 before they may create or acquire an EEC.

Division 3A provides for provisional accreditation of an energy efficiency activity.

A person needs to be accredited under Division 3 before an EEC can be issued in relation to energy savings achieved.

A certificate must be registered in accordance with Division 4 when it is created. Every transfer of the certificate must also be registered.

When a certificate has been surrendered by a liable entity, it ceases to be valid and provision is made for the surrender of certificates.

30I  Explaining how energy savings are measured and lead to the issuing of an energy efficiency certificate

(1) The diagram in this section and the explanation indicates the energy saving process which leads to the issuing of an EEC. The diagram is intended for use only as a general introductory illustration and is not intended to have any other effect. If there is an inconsistency between any matter contained in the diagram or the accompanying explanation in this section and a provision of this Act or the regulations, the latter provision prevails.

(2) Energy savings cannot be directly measured, since the savings represent the absence of energy use. Therefore energy savings are determined by comparing measured energy use before and after any attempt at saving energy. The energy used before the implementation of the energy efficiency activity is referred to as the baseline. The energy used after the implementation of the energy efficiency activity is the post-retrofit energy use.

(3) The energy use before and after the implementation of the energy efficiency activity may be adjusted for changes on conditions such as weather and occupancy of fluctuations due to production levels or economic circumstances. Such adjustments are described in paragraph 30N(5)(d).

(4) Once a measured energy saving is quantified and accredited it is eligible for certification. A certificate representing the measured saving is known as an EEC.

(5) Eligible energy efficiency activities are those activities that can be:

(a) measured in units of MWh and MJ saved; and

(b) the measurement is capable of independent verification.

(6) The principles and procedures for measurement and verification of the energy savings must: 

(a) emphasise quality control, accuracy and consistency of measurement and verification;

(b) be applied only to activities which are related to energy saving;

(c) be defined by the system boundary, point of eligibility or measurement at the site or facility level;

(d) be able to be outlined through documentary evidence and comply with reporting requirements in the regulations;

(e) comply with an energy savings determination technique, based upon available data of suitable quality; and

(f) be able to be disclosed through data and analysis enabling energy savings to be independently verifiable.

(7) There are three methods of accrediting and quantifying the energy efficiency activity set out in section 30U. Before the energy efficiency activity can be accredited a method of quantifying energy savings must be selected. The method selected must, in the opinion of the Regulator, be consistent with the scope, the budget and the administrative complexity of the energy efficiency activity.

(8) In this Division a reference to energy measured in MWh is also taken to refer the equivalent amount of energy in MJ, and vice versa.

Division 2--Provisional accreditation of an energy efficiency activity

30J  Application for provisional accreditation of an energy efficiency activity

(1) A registered person may apply to the Regulator for provisional accreditation of the proposed facility of an energy efficiency activity that the person considers would, if implemented, be a single energy efficiency activity.

Form of application

(2) The application must:

(a) be made in a form and manner required by the Regulator; and

(b) specify the proposed components; and

(c) list the eligible energy efficiency activity from which the energy is intended to be saved; and

(d) contain any other information required by the Regulator; and

(e) be accompanied by any documents required by the Regulator; and

(f) be accompanied by the fee (if any) prescribed by the regulations for the making of applications for provisional accreditation.

30K  Regulator may give provisional accreditation of an energy efficiency activity

(1) If:

(a) the Regulator receives an application that is properly made under section 30J (about an application for provisional accreditation of an energy efficiency activity); and

(b) the Regulator is satisfied that some or all of the proposed components of the system would, if implemented, be an eligible energy efficiency activity for the purposes of this Act;

the Regulator must, by written notice given to the applicant:

(c) specify which of those proposed components (provisional energy efficiency components) would, if implemented, be an eligible energy efficiency activity for the purposes of this Act; and

(d) specify that, if an application is properly made under section 30M in relation to the energy efficiency activity:

(i) the Regulator will determine that the components specified in that application are taken to be an energy efficiency activity for the purposes of this Act if the Regulator is satisfied that they are not materially different from the provisional energy efficiency components; and

(ii) the energy efficiency activity will be eligible for accreditation if subsection 30M is satisfied.

Refusal

(2) If:

(a) the Regulator receives an application that is properly made under section 30J; and

(b) the Regulator is not satisfied that some or all of the proposed components of the system would, if assembled, be an eligible energy efficiency activity for the purposes of this Act;

the Regulator must, by written notice given to the applicant, refuse the application.

Regulations

(3) Regulations made for the purposes of section 30U, in relation to determining the components of an eligible efficiency activity, apply in a corresponding way to this section.

30L  Time limit for deciding applications

(1) The Regulator must decide an application that is properly made under section 30J within:

(a) the period of 8 weeks beginning on the day the Regulator received the application; or

(b) if, before the end of that period, the Regulator and applicant agree to a longer period--that longer period.

(2) If the Regulator has not decided the application within the period applicable under subsection (1), the Regulator is taken, at the end of that period, to have refused the application.

Division 3--Accreditation of eligible energy efficiency activities

30M  Application for accreditation

(1) A registered person may apply to the Regulator for accreditation of eligible energy efficiency activities if the person:

(a) operates those activities (whether alone or together with one or more other persons); or

(b) owns all, or a part, of those activities (whether alone or together with one or more other persons).

(2) The application must:

(a) be made in a form and manner required by the Regulator; and

(b) specify the eligible energy efficiency activities; and

(c) specify each other person (if any) who:

(i) operates those activities (whether alone or together with one or more other persons); or

(ii) owns all, or a part, of those activities (whether alone or together with one or more other persons); and

(d) contain any other information required by the Regulator; and

(e) be accompanied by any documents required by the Regulator; and

(f) be accompanied by the fee (if any) prescribed by the regulations for the making of applications for accreditation; and

(g) be accompanied by a statement in writing from each other person (if any) specified under paragraph (c) indicating that the other person agrees to the making of the application.

(3) The Regulator must enter details of the application on the register of applications for accredited eligible energy efficiency activities.

30N  Regulator to determine certain matters

(1) If the Regulator receives an application that is properly made under section 30M, the Regulator must:

(a) determine which components of the facility are to be taken to be an eligible energy efficiency activity for the purposes of this Act; and

(b) determine whether the energy efficiency activity is eligible for accreditation.

(2) If:

(a) the Regulator gave a person a notice under section 30J in relation to the energy efficiency activity; and

(b) the Regulator is satisfied that the components specified in the application under section 30J are not materially different from the components specified under section 30J;

the Regulator must determine, under paragraph (1)(a) of this section, that the components specified in the application under section 30J are taken to be an energy efficiency activity for the purposes of this Act.

(3) An energy efficiency activity is eligible for accreditation if:

(a) some or all of the energy savings are generated from the energy efficiency activity; and

(b) the energy efficiency activity satisfies any prescribed requirements.

(4) However, an energy efficiency activity is not eligible for accreditation if the Regulator is satisfied that a previous determination under paragraph (1)(a) should be varied to include the components of the facility specified in the application for accreditation.

(5) If the Regulator determines that the energy efficiency activity is eligible for accreditation, the Regulator must also determine:

(a) any energy used by the facility that are not eligible energy efficiency activities; and

(b) the baseline for the eligible energy efficiency activity; and

(c) the post-retrofit energy use for the eligible energy efficiency activity; and

(d) the adjustments if any for the eligible energy efficiency activity; and

(e) define the method of accreditation as being either through deeming, certifying or verifying or a combination of methods.

(6) The Regulator must determine the matters specified in paragraphs (1)(a) and (3)(a) in accordance with guidelines prescribed in the regulations.

(7) To avoid doubt the regulations may provide detail of the method of calculating energy savings, baseline and adjustments that are integral to the operation of the facility or to the use of energy by the facility.

30O  Regulator to approve or refuse application

If the Regulator determines that a person is eligible for accreditation, the Regulator must approve the application. In any other case, the Regulator must refuse the application.

30P  Time limit for deciding applications

(1) The Regulator must decide an application that is properly made under section 30M within:

(a) the period of 8 weeks beginning on the day the Regulator received the application; or

(b) if, before the end of that period, the Regulator and applicant agree to a longer period--that longer period.

(2) If the Regulator has not decided the application within the period applicable under subsection (1), the Regulator is taken, at the end of that period, to have refused the application.

30Q  Nominated person for accredited energy efficiency activity

If the Regulator approves an application, the applicant becomes the nominated person for the accredited energy efficiency activity.

30R  Regulator to allocate identification codes

If the Regulator approves an application, the Regulator must allocate the facility a unique identification code and advise the applicant of the code.

30S  What is an eligible energy efficiency activity?

(1) An eligible energy efficiency activity is an activity that results in:

(a) the improvement in the service provided per unit of power measured in MW or MJ, including activities which increase unit output.

Note: Examples of activities are traction, work, electricity, heat, light or fuel.

(b) reduced energy consumption where the consumption is:

(i) reduced (as measured in MW or MJ) in relation to the baseline; but

(ii) lower consumption as a result of lower activity shall not be taken into consideration;

(c) improvements in energy performance as measured in units of MWh and MJ;

(d) measured and verified units of MWh and MJ saved;

(e) related to demand for electricity, supply of electricity, or both;

(f) results in energy savings additional to savings that are realised as a result of compliance with other legal obligations;

(g) an activity specified by in the regulations.

Regulations

(2) For the purposes of this Act, the regulations may provide that an energy efficiency activity referred to in subsection (1) has the meaning prescribed by the regulations.

(3) For the purposes of this Act, the regulations may make provision for and in relation to limiting the meaning of an eligible energy efficiency activity referred to in subsection (1).

Division 4--Creation of certificates

Subdivision I--Preliminary

30T  Creating certificates for eligible and accredited energy efficiency activities

(1) EECs are created according to the measurement and performance of the Eligible Energy Efficiency Activity (EEEA) in accordance with subsections (3), (4) and (5).

(2) Accreditation and assessment of the EEEA is by:

(a) deemed performance; or

(b) certified performance; or

(c) verified performance;

as set out in subsections (3), (4), (5).

Example: The following are examples of deeming, certification and verification:

(a) replacement of appliances and equipment is likely to be accredited and assessed by deemed performance;

(b) industrial and commercial users are likely to be accredited and assessed by certified performance;

(c) major capital upgrades and investments are likely to be accredited and assessed by verified performance.

Deemed performance

(3) An activity may be deemed as an energy efficiency activity eligible for an EEC if it meets the criteria set out in the regulations which must include the following:

(a) there is well documented statistical information supporting the energy efficiency of the activity;

(b) the use of energy by the activity is sufficiently small;

(c) where the activity is subject to minimum energy performance standards provided under relevant Commonwealth, State or Territory legislation from time to time, the activity meets those standards;

(d) a schedule of all activities which have been listed in the regulations as energy efficiency activities.

Certified performance

(4) An activity may be certified as an energy efficiency activity (certified performance), eligible for an EEC if it meets the criteria set out in the regulations which must include the following:

(a) base year energy use normalised against economic activity or production effect;

(b) a specific method developed for the activity which either measures or simulates the measurement of energy use by the activity;

(c) the energy savings can be replicated by a third party;

(d) a schedule of all activities which have been listed in the regulations as certified energy efficiency activities.

Verified performance

(5) An activity may be verified as energy efficiency activity (verified performance), eligible for an EEC if it meets the criteria set out in the regulations which must include the following:

(a) there is little or no variation in energy consumption by the activity;

(b) a schedule of all activities which have been verified as energy efficiency activities;

(c) base year energy use normalised against economic activity or production effect;

(d) a schedule of all activities which have been listed in the regulations as verified energy efficiency activities.

Determination of energy efficiency savings

(6) The method used to determine the energy efficiency saving from which the number of EECs is derived is to subtract the post-retrofit energy use from the baseline as adjusted for variations in both the baseline and post-retrofit energy use. 

Baseline Method - General Equation:

Establishing the baseline

(7) The method for establishing the baseline will vary depending on the energy savings determination method.  The baseline energy of the deemed performance activities would be related to the physical installation status of an activity rather than relating to baseline energy use. 

Example: A house which previously had no ceiling insulation is retrofitted with insulation resulting in a deemed benefit over the lifetime of the insulation.  To reduce administration costs the deeming would be scheduled for typical house construction, orientation, climate and combined with a derating factor.

(8) The baseline energy use for accredited performance and verified performance projects would be calculated using energy consumption trends and other performance criteria and adjusted for non-energy efficiency adjustments to reflect variations in demand such as occupancy levels, installed equipment, weather or metering errors.

Division 5--Energy efficiency activity

30U  Creating certificates for eligible energy efficiency activities

(1) The nominated person for an accredited eligible energy efficiency activity may create an EEC for each whole MWh of energy saved by the eligible energy efficiency activity during a year that is above the energy efficiency activity's baseline.

(2) An EEC must not be created in respect of a whole MWh of energy saved partly in one year and partly in the following year.

(3) If the amount of energy saved by an accredited and eligible energy efficiency activity during a year that is above the eligible energy efficiency activity baseline is less than one MWh but greater than or equal to 0.5 MWh, the nominated person for the eligible energy efficiency activity may create one EEC in respect of the energy saved during the year.

(4) The amount of energy savings by an accredited and eligible energy efficiency activity is to be worked out in accordance with the regulations.

(5) Energy savings to be excluded from all calculations under this section include:

(a) energy savings from any energy saving activities that are not eligible energy efficiency activities; or

(b) energy savings generated during any period of suspension of the accreditation of the accredited and eligible energy efficiency activity.

(6) The nominated person for an accredited and eligible energy efficiency activity must not create any EEC during any period of suspension of the person's registration.

30V  When an EEC may be created

An EEC may be created at any time after the energy saving from the eligible energy efficiency activity is realised in relation to which it is created and before the end of the year after the year in which it is realised.

30W  How many certificates may be created

(1) The number of certificates (each representing one MWh energy saving) that may be created in relation to an eligible energy efficiency activity is to be determined in accordance with the rules made by the Regulator. 

(2) The rules made by the Regulator may make provision in relation to:

(a) the energy savings from the EEEA;

(b) calculation of the baseline for the calculation of the energy savings and using energy consumption trends and other performance criteria and adjusted for non-energy efficiency variations in demand including occupancy levels, installed equipment, weather or metering errors.

(c) application of any discount factor provided for in the regulations to adjust for non-energy efficiency variations in demand such as occupancy levels, installed equipment, weather or metering errors.

(d) determination of the system boundary of the eligible energy efficiency activity.

30X  Who may create a certificate

(1) The owner of rights in relation to the EEEA, is entitled to create any EEC, the creation of which becomes lawful while they are the owner of those rights.

(2) However, the owner may, by written notice, and in accordance with the rules made by the Regulator, assign the right to create the EEC to another person.  If the owner does this, the owner is not entitled to create the EEC but the person to whom the right was assigned is entitled to create the certificate or certificates.

(3) Despite subsections (1) and (2) a person who is not registered must not create a certificate that relates to the deemed energy efficiency activity.

30Y  Energy efficiency and energy savings return

(1) The nominated person for an accredited eligible energy efficiency activity must give an energy efficiency and savings return for a year to the Regulator on or before:

(a) 14 February in the following year; or

(b) any later day allowed by the Regulator.

(2) The return must include details of:

(a) the amount of energy savings generated by the eligible energy efficiency activity during the year; and

(b) the amount of that energy savings generated eligible energy efficiency activities; and

(c) the number of EECs created during the year in respect of the energy savings generated by the eligible energy efficiency activity during the year; and

(d) the number of EECs created during the year in respect of any energy savings generated by the eligible energy efficiency activities during the previous year; and

(e) any other information specified by the regulations;

and must be in the form specified by the regulations.

30Z Amending energy efficiency and savings returns

(1) The Regulator may amend an energy efficiency and savings return if the nominated person for the accredited eligible energy efficiency activities concerned requests, in writing, an amendment within 12 months of the energy efficiency and savings return being given.

(2) The Regulator may also amend an energy efficiency and savings return on his or her own initiative if the amendment is made within 4 years of the return being given.

(3) If the Regulator refuses to amend an energy efficiency and savings return upon a request by a nominated person for accredited eligible energy efficiency activities, the Regulator must notify the person accordingly.

Division 6--Improper creation of certificates

30ZA  Improper creation of EECs--offences

(1) A person is guilty of an offence if:

(a) the person creates an EEC; and

(b) the person is not entitled to create the EEC.

Penalty: 1 penalty unit.

(2) Subsection (1) is an offence of strict liability.

Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility and Chapter 3 of the Criminal Code contains general principles relating to penalties.

Note 2: For strict liability, see section 6.1 of the Criminal Code.

(3) To avoid doubt, a penalty may be imposed in respect of each EEC in respect of which a person is guilty of an offence.

Example: An individual who commits an offence under subsection (1) by creating 20 EECs that the individual was not entitled to create would be subject to a maximum penalty of 20 penalty units. If the offence were under subsection (3), the individual would be subject to a maximum penalty of 100 units.

(5) In determining whether a person was not entitled to create an EEC, the fact that the EEC has been registered by the Regulator under section 26 is to be disregarded.

Note: This ensures that a person cannot raise as relevant evidence the fact that an EEC has been registered.

Division 7--Form and registration of certificates

30ZB  Form and content of certificates--eligible energy efficiency activity

(1) Certificates issued under Division 4 are to be created in an electronic form approved in writing by the Regulator.

(2) Each certificate is to contain:

(a) the registered person's registration number; and

(b) the year; and

(c) a number in an unbroken sequence that is used for all certificates created in respect of the eligible energy efficiency activity concerned in that year and that starts at one and has increments of one; and

(d) the electronic signature of the registered person who created the certificate; and

(e) the date on which the eligible energy efficiency activity concerned was installed; and

(f) details of the eligible energy efficiency activity in respect of which the certificate was created; and

(g) the date on which the certificate was created.

4  Heading to Division 9 of Part 2

After "station", insert "or eligible energy efficiency activity".

5  Section 30B

After "power station" (wherever occurring), insert "or eligible energy efficiency activity".

6  Heading to Division 10 of Part 2

After "station", insert "or eligible energy efficiency activity"

7  Section 30C

After "power station" (wherever occurring), insert "or eligible energy efficiency activity".

8  Heading to Division 11 of Part 2

After "station", insert "or eligible energy efficiency activity"

9 Section 30D

After "power station" (wherever occurring), insert "or eligible energy efficiency activity".

10  After section 30E

Insert:

30EA  Suspending the accreditation of an energy efficiency activity

Failure to give an electricity generation return

(1) The Regulator may, by written notice, suspend the accreditation of an accredited energy efficiency activity if an energy efficiency generation return for a year, in respect of the energy efficiency activity, has not been given to the Regulator in accordance with section 20.

(2) The accreditation is suspended until the return is given to the Regulator in accordance with that section. The notice must include a statement to that effect.

Contravention of Commonwealth, State or Territory law

(3) The Regulator may, by written notice, suspend the accreditation of an accredited energy efficiency activity if the Regulator believes on reasonable grounds that the energy efficiency activity is being operated in contravention of a law of the Commonwealth, a State or a Territory.

(4) The accreditation is suspended until the Regulator believes on reasonable grounds that the energy efficiency activity is not being operated in contravention of that law. The notice must include a statement to that effect.

Other circumstances

(5) The Regulator may, by written notice, suspend the accreditation of an accredited energy efficiency activity in any other circumstances prescribed by the regulations.

(6) The accreditation is suspended for such period (including permanently) as the Regulator considers appropriate in all of the circumstances. That period must be specified in the notice.

Note: Any electricity generated by the power station while its accreditation is suspended under this section is to be excluded from all calculations under section 18: see subsection 18(4).

11  After Division 12 of Part 2

Insert:

Division 12A--Varying eligible energy efficiency activity baseline

30G  Varying an eligible energy efficiency activity

(1) The Regulator may, by written determination, vary the baseline for an accredited energy efficiency activity in the circumstances prescribed by the regulations.

(2) The regulations may make provision for the baseline for an accredited energy efficiency activity to be varied if an action or policy of the Commonwealth Government reduces the effect of the energy efficiency activity for a sustained period.

(3) Subsection (2) does not limit subsection (1).

Increase in baseline

(4) If a determination increases the baseline for an accredited energy efficiency activity, the determination has effect only for the years following the year in which the determination is made.

Decrease in baseline

(5) If a determination decreases the baseline for an accredited energy efficiency activity, the determination has effect for the year or years specified in the determination.

12  Heading to Part 4

After "energy", insert "and energy efficiency".

13  At the end of section 36

Add:

(4) Subject to subsection (2), if a liable entity has an energy efficiency certificate shortfall for a year, energy efficiency shortfall charge is payable in respect to the shortfall.

(5) No energy efficiency shortfall charge is payable by a liable entity for a year if its energy efficiency certificate shortfall for the year is less than 10% of the liable entity's required energy efficiency for the year. However, the energy efficiency certificate shortfall becomes a carried forward shortfall for the year.

(6) Energy efficiency shortfall charge imposed in respect of a liable entity's energy efficiency certificate shortfall for a year is payable by the liable entity.

14  After section 37

Insert:

37A  Amount of energy efficiency certificate charge

The amount of energy efficiency charge payable by a liable entity is worked out using the formula:

where:

rate of charge is the rate of charge as specified under the Renewable Energy (Electricity) (Charge) Act 2000 and the National Mandatory Energy Efficiency Target (Charge) Act 2000.

15  After section 38

Insert:

38A  Determination of energy efficiency certificate shortfall

The following method statement shows how to work out a liable entity's energy efficiency certificate shortfall for a year.

Method statement--working out the energy efficiency shortfall

Step 1. Work out the total amount, in MWh, of energy used by the liable entity during the year under relevant acquisitions.

Step 2. Multiple the total electricity acquired by the energy efficiency percentage for the year and round the result to the nearest (rounding 0.5 upwards).  Add to the result any carried forward shortfall from the previous year.  The result is the liable entity's required energy efficiency savings for the year.

Step 3. Subtract the total value, in MWh, of energy efficiency certificates surrendered to the Regulator for that year by the liable entity from the required energy efficiency for the year.

Result: If the result is greater than zero, the liable entity has an energy efficiency certificate shortfall for the year equal to the result.

If the result is zero, the liable entity does not have a energy efficiency certificate shortfall for the year.

If the result is less than zero, the liable entity has a carried forward surplus for the year.

16  After Division 2 of Part 4

Insert:

Division 2A--Energy efficiency target percentage

40A  Regulations to specify energy efficiency target percentage

(1) The annual energy efficiency target for a year is the percentage specified in the regulations. The regulation specifying a percentage for a year must be made on or before 31 March in the year.

(2) For the year commencing on 1 January 2008 the energy efficiency target is to be set at 1.0%.

(3) For the year commencing on 1 January 2009 the energy efficiency target is to be set at 2.0%.

(4) Before the Governor-General makes a regulation under subsection (1), the Minister must take into consideration:

(a) the required energy efficiency improvement opportunity for the year; and

(b) the amount estimated as the amount of electricity that will be acquired under relevant acquisitions during the year; and

(c) the amount of energy efficiency saving as an accumulative percentage toward the energy efficiency target of 20% by 2020.

(5) A failure to comply with subsection (4) does not affect the validity of the regulations.

17  Heading to Division 3 of Part 4

After "energy", insert "and energy efficiency".

18  Section 41

After "energy" (wherever occurring), insert "and energy efficiency".

19  Section 44

After "renewable energy certificates" (wherever occurring), substitute "or energy efficiency certificates".

20  At the end of section 45

Add:

(d) a renewable energy certificate can only be surrendered against a renewable energy liability and an energy efficiency certificate can only be surrendered against an energy efficiency liability.

21  Heading to section 46

After "energy shortfall", insert "or energy efficiency shortfall".

22  Section 46

After "energy shortfall" (wherever occurring), insert "or energy efficiency shortfall".

23  After section 47

Insert:

47A First energy efficiency shortfall charge statement for year taken to be assessment

If:

(a) a liable entity lodges an energy efficiency shortfall statement for a year; and

(b) an EEC shortfall statement has not previously been lodged, and an assessment has not previously been made for the year in relation to the liable entity;

then:

(c) the statement has effect as an assessment of the liable entity's EEC shortfall for the year and of the energy efficiency shortfall charge (if any) payable on the shortfall; and

(d) the assessment is taken to have been made on 14 February in the following year or the day on which the statement was lodged, whichever is the later; and

(e) the EEC shortfall specified in the statement is taken to be the liable entity's energy efficiency certificate shortfall for the year; and

(f) the amount of EEC shortfall charge (if any) specified in the statement is taken to be the amount of EEC shortfall charge payable by the liable entity for the year; and

(g) the statement has effect as if it were a notice of assessment signed by the Regulator and given to the liable entity on the day on which the assessment is taken to have been made.

24  Section 48

After "energy shortfall" (wherever occurring), insert "or energy efficiency shortfall".

25  Section 48

After "energy certificate" (wherever occurring), insert "or energy efficiency certificate".

26  Section 49

After "energy shortfall" (wherever occurring), insert "or energy efficiency shortfall".

27  Subsection 50(1)

After "energy shortfall", (wherever occurring), insert "or energy efficiency shortfall".

28  Section 65

After "energy shortfall", insert "or energy efficiency shortfall".

29  Subsection 66(1) (table)

Insert:

30  After section 67

Insert:

67A  Collection and recovery of energy efficiency shortfall charge etc.

The provisions of Divisions 1 and of 2 of Part 7 relating to collection and recovery of charge apply to the energy efficiency shortfall charge, and all references in that Part to charge and energy shortfall charge shall be read as references to the energy efficiency shortfall charge for the purpose of this Part.

31  After section 95

Insert:

95A  Refunding energy efficiency shortfall charge in later years

The provisions of Part 8 relating to refunding of charge apply to the refunding of the energy efficiency shortfall charge, and all references in that Part to charge or energy shortfall charge shall be read as references to the energy efficiency shortfall charge for the purposes of this Part.

32  After section 99

Insert:

99A  Penalty charge etc.

The provisions of Part 9 relating to penalty charge apply to the energy efficiency shortfall charge, and all references in that Part to charge or energy shortfall charge shall be read as references to the energy efficiency shortfall charge for the purposes of this Part.

33  Section 134

After "renewable energy" (wherever occurring), insert " or energy efficiency".

34  At the end of section 135

Add:

(e) the register of accredited eligible energy efficiency activities;

(f) the register of energy efficiency certificates;

(g) the register of applications for accredited eligible energy efficiency activities.

35  After section 138

Insert:

138A  Contents of register of accredited eligible energy efficiency activities

The register of accredited eligible energy efficiency activities is to contain:

(a) the name of each accredited eligible energy efficiency activity; and

(b) the name of the nominated person for the accredited eligible energy efficiency activity; and

(c) the identification code for each accredited eligible energy efficiency activity; and

(ca) the baseline for each eligible energy efficiency activity (including any variation of that baseline under section 30F); and

(d) any other information that the Regulator considers appropriate.

36  Section 140

After "certificate" (wherever occurring), insert "and energy efficiency certificate".

37  After paragraph 140(da)

Insert:

(db) the eligible energy efficiency activity in respect of which the certificate was created; and

38  After section 141A

Insert:

141AB  Contents of register of applications for accredited eligible energy efficiency activities

The register of applications for accredited eligible energy efficiency activities is to contain:

(a) the name of each applicant for an accredited eligible energy efficiency activity; and

(b) the location of the eligible energy efficiency activity; and

(c) the eligible energy efficiency activity type or accreditation methodology proposed to be used by the eligible energy efficiency activity; and

(d) any other information that the Regulator considers appropriate.

39  Heading to Part 14

After "Energy" (twice occurring), insert "and Energy Efficiency".

40  Heading to Division 1 of Part 14

After "Energy", insert "and Energy Efficiency".

41  Heading to Division 2 of Part 14

After "Energy", insert "and Energy Efficiency".

42  Section 149

After "energy" (twice occurring), insert "and energy efficiency".

43  Section 150

Repeal the section, substitute:

150  Functions

The functions of the Office of the Renewable Energy and Energy Efficiency Regulator are to:

(a) assist the Regulator in performing the Regulator's functions; and

(b) assist the Regulator with the administration of the energy efficiency target percentage.

 

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