Commonwealth Numbered Regulations - Explanatory Statements

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RENEWABLE ENERGY (ELECTRICITY) AMENDMENT REGULATIONS 2004 (NO. 1) 2004 NO. 322

Subsection 161(1) of the Renewable Energy (Electricity) Act 2000 (the Act) provides, in part, 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 provides the legislative framework for the implementation of the Government's mandatory renewable energy target, announced by the Prime Minister on 20 November 1997. The mandatory renewable energy target is designed to increase the amount of electricity in Australia that has been generated from renewable energy sources. By 2010, an additional 9,500 Giga Watt hours (GWh) of electricity will be required to be supplied from renewable energy sources, raising the contribution that renewable energy sources make to Australia's electricity supply to around 12 per cent.

The Act requires wholesale purchasers of electricity (liable parties) to surrender 'renewable energy certificates' to the Renewable Energy Regulator, or pay a penalty. Liable parties meet a share of the target, in proportion to their share of the national wholesale electricity market. The Act also establishes the framework for renewable energy generators (eligible parties) to create renewable energy certificates that can then be sold to liable parties to meet their requirements under the Act.

The Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations) provide the administrative framework to implement the Act in relation to power station accreditation, eligibility requirements for fuel sources, and calculation methods for determining the number of renewable energy certificates that can be claimed.

The purpose of the Regulations is to amend the Principal Regulations to:

•       prescribe additional solar water heater models, and their corresponding eligibility for renewable energy certificates, for the purposes of the Act;

•       change the definition of Solar Water Heater, by omitting a transitional provision which allows manufacturers to gain product certification under either the current or previous Australian Standard;

•       omit Schedule 4, which outlines renewable energy certificate eligibility for small hydro-electric systems of a set size, replacing it with a formula allowing calculation of the number of renewable energy certificates for a wider range of small hydro-electric systems; and

•       omit Schedule 6, which outlines renewable energy certificate eligibility for wind turbines of a set size, replacing it with a formula allowing calculation of the number of renewable energy certificates for a wider range of wind turbines.

Further details of the Regulations are set out in the Attachment A.

Subsection 161(2) of the Act provides that draft regulations must be available for public comment for a period of not less than 30 days before the regulations are made. In accordance with subsection 161(2) of the Act, the Regulations have been available for public comment for a period of no less than 30 days.

The Regulations commenced on the date of their notification in the Gazette.

It is intended that eligibility for renewable energy certificates for the new solar water heater models be backdated to the date on which certification to Australian Standard 2712:2002 was obtained. This would prevent manufacturers being disadvantaged by the time required to update the list of eligible solar water heater models in the Principal Regulations. The benefits that the manufacturers gain from the new models being listed in the Regulations would be able to be accessed for past sales, back to the date of certification against Australian Standard 2712:2002. Although the eligibility for renewable energy certificates would be backdated, the Australian Government Solicitor has advised that the proposed amendment would not have a retrospective effect and subsection 48(2) of the Acts Interpretation Act 1901 would not have any application in respect of the proposed Regulations (Attachment B refers).

Attachment A

Details of the Renewable Energy (Electricity) Amendment Regulations 2004 (No. 1)

Regulation 1 - Name of Regulations

This provides that the name of the Regulations is the Renewable Energy (Electricity) Amendment Regulations 2004 (No. 1).

Regulation 2 - Commencement

This provides for the Regulations to commence on the date of their notification in the Gazette.

Regulation 3 - Amendment of the Renewable Energy (Electricity) Regulations 2001

This Regulation provides for Schedule 1 to amend the Renewable Energy (Electricity) Regulations 2001 (the Principal Regulations). This Regulation also provides for Schedule 2 to amend the Principal Regulations as amended by Schedule 1.

Schedule 1 Amendments

Item 1 - Sub-subparagraph 3 (3)(b)(ii)(B)

This amendment replaces the phrase "as in force at the commencement of this sub-subparagraph" with "as in force on 29 May 2003". This change will allow readers to see the date without referring to previous amendment regulations. It is an administrative change.

Item 2 - Subregulation 3 (4)

This amendment omits the subregulation, which was added to the Principal Regulations on 1 January 2003 to allow manufacturers of solar water heaters to gain product certification to revised Australian Standard AS2712:2002, where products were previously certified to Australian Standard AS2712:1993. The grace period has concluded and all manufacturers are now required to gain product certification to AS2712:2002.

Item 3 - Paragraph 20 (1)(a)

This amendment revises existing paragraph 20(1)(a) to allow for the calculation of the number of renewable energy certificates a hydro-electric system is eligible for. The new formula replaces the list in Schedule 4 to the Principal Regulations and accommodates hydro-electric systems with a kW rating of slightly less than 0.2 kW, previously excluded from the Schedule (see item 6 below).

Item 4 - Paragraph 20 (1)(c)

This amendment revises existing paragraph 20(1)(c) to allow for the calculation of the number of renewable energy certificates a wind turbine system is eligible for. The new formula replaces the list in Schedule 6 to the Principal Regulations and accommodates wind turbine systems with a kW rating of slightly less than 0.2 kW, previously excluded from the Schedule (see item 7 below).

Item 5 - Subregulation 20 (3)

This amendment updates the reference to subparagraph (1)(a)(i) with the revised reference to subparagraph (1)(a)(ii) to reflect changes to paragraph 20 (1)(a).

Item 6 - Schedule 4

This amendment omits Schedule 4 to the Principal Regulations. Schedule 4 will no longer be required as a result of item 4 above.

Item 7 of Schedule 6

This amendment omits Schedule 6 of the Principal Regulations. Schedule 6 will no longer be required as a result of item 5 above.

Items 8 to 118 - Schedule 7, Part 2

These items amend Part 2 of Schedule 7 by:

•       inserting additional solar water heater models that have become eligible for renewable energy certificates under the regulations since Part 2 of Schedule 7 was last revised;

•       revising renewable energy certificate calculations for existing eligible solar water heater models; and

•       deleting solar water heater models which are no longer eligible, as their eligibility has lapsed.

Schedule 2 Renumbering of Part 2 of Schedule 7 of Renewable Energy (Electricity) Regulations 2001

Item 1 - Schedule 7, Part 2, items

This amendment renumbers all the eligible solar water heater models listed in Part 2 of Schedule 7 following the insertion and deletion of solar water heater models in items 8 to 118 of Schedule 1 to the Regulations.

Attachment B

Australian Government Solicitor
50 Blackall Street Barton ACT 2600
Locked Bag 7246 Canberra Mail Centre ACT 2610
T 02 6253 7000 DX 5678 Canberra
www.ags.gov.au

Your ref.
Our ref. 01079130

21 June 2004

Ms Jill Taylor
Office of the Renewable Energy Regulator
GPO Box 621
Canberra ACT 2610

Dear Ms Taylor

Proposed amendments to the Renewable Energy (Electricity) Regulations

1.       You have requested advice about proposed amendments to the Renewable Energy (Electricity) Regulations.

Summary

2.       Subsection 48(2) of the Acts Interpretation Act 1901 will not have any application in respect of the amendments to the Renewable Energy (Electricity) Regulations. Those amendments can, therefore, be validly made.

Background

3.       Section 21 of the Renewable Energy (Electricity) Act 2000 provides that if a solar water heater is installed on or after 1 April 2001 and the solar water heater displaces non-renewable electricity, certificates may be created after the heater is installed. Section 22 provides that the number of certificates that may be created for a particular installation of a solar water heater is to be determined in accordance with the Regulations.

4.       Regulation 19 of the Renewable Energy (Electricity) Regulations provides that the number of certificates that may be created for a particular installation of a solar water heater is the number mentioned in the relevant item in Part 2 of Schedule 7, for the installation and the zone, on or after the date or for the period mentioned in that item.

5.       Part 2 of Schedule 7 contains a list of solar water heater models, a date, and for each of four geographical zones, the number of certificates that may be created on the installation of the solar water heater. The solar water heater must be installed after the date listed in order for the certificates to be created.

6.       In practice, all solar water heaters that are certified under the relevant Australian Standard are ultimately added to the list in Schedule 7. However, due to the time taken to have the regulations made, a period may elapse between the certification and the making of the regulations. However, you have adopted the practice of inserting into Schedule 7 the date of the certification under the Australian Standard. This means that where a certified solar water heater has been installed after certification, but before the regulations has been amended, the person installing the system is conferred, on the making of the regulations, with the right to create certificates with respect to the installation that has already been made.

7.       We have not been provided with a copy of the regulations you presently propose, as they have yet to be drafted. However, we understand that they will add a number of new solar water heaters to the list in Schedule 7, and will include dates from which certificates may be created. Those dates will pre-date the notification of the regulations. As a result, it will be possible, once the regulations are notified, to create certificates in relation of solar water heaters which were installed prior to the notification of the regulations.

Subsection 48(2) of the Acts Interpretation Act 1901

8.       Subsection 48(2) of the Acts Interpretation Act 1901 provides as follows:

(2)       A regulation, or a provision of regulations, has no effect if, apart from this subsection, it would take effect before the date of notification and as a result:

(a)       the rights of a person (other than the Commonwealth or an authority of the Commonwealth) as at the date of notification would be affected so as to disadvantage that person; or

(b)       liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth) in respect of anything done or omitted to be done before the date of notification.

Advice

9.       In our view, s.48(2) of the Acts Interpretation Act does not apply to the proposed amendments, because they do not 'take effect before the date of notification'. The amendments will not commence prior to notification, and they will not purport to confer any rights or impose any obligations on any date prior to notification.

10.       What the amendments will do, instead, is to (prospectively) confer a right on a person to create certificates after the date of notification of the amendments. They will not purport to confer any right on any person to create certificates prior to the date of notification of the amendments. Rather, they will confer this right by reference to an event which in some cases may have taken place prior to the notification of the amendments.

11.       Even if the proposed amendments were read as having retrospective effect, they would not, as a result:

-       affect the rights of a person, as at the date of notification of the regulations in the Gazette, so as to disadvantage that person; or

-       impose on a person any liability in respect of anything done or omitted to be done before the date of notification.

12.       Accordingly, we confirm that subsection 48(2) of the Acts Interpretation Act will not have any application in respect of the proposed amendments to Part 2 of Schedule 7 of the Renewable Energy (Electricity) Regulations.

13.       Please contact us if we can assist further with this matter.

Yours sincerely

Kathryn Graham
Counsel
Office of General Counsel
T 02 6253 7167 F 02 6253 7304
M 0400 058 782
kathryn.graham@ags.gov.au