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 [Page Break] 1 Short Title ........................................................................................... 1 2 Purpose ............................................................................................... 1 3 Commencement................................................................................... 2 4 Schedules............................................................................................. 2 Schedule 1--Amendment of the Renewable Energy (Electricity) Act 2000 3 [Page Break] 2 for energy savings, which are additional to energy 3 efficiency activities set by minimum energy 4 performance regulation, through energy efficiency 5 certificate trading, and for related purposes 6 The Parliament of Australia enacts: 7 8 1 Short Title 9 This Act may be cited as the National Market Driven Energy 10 Efficiency Target Act 2007 11 2 Purpose 12 The purpose of this Act is to promote the adoption of greater 13 energy efficiencies and cost effective greenhouse gas abatement 14 by: National Market Driven Energy Efficiency Target Bill 2007 No. , 2007 1 D:\BillsMigrate2-copy\SenateBills\Bills\FIRST\0716520.doc 23/7/2008 10:16 PM [Page Break] 2 opportunities; 3 (b) facilitating investment in energy efficiency activities; 4 (c) addressing the failure of the energy market to deliver cost 5 effective energy efficiency activities; 6 (d) completing the energy market through the establishment of a 7 market for energy efficiency and energy savings activities; 8 (e) introducing a mandated National Market Driven Energy 9 Efficiency Target (NMDEET); 10 (f) providing for the creation, acquisition and trading of Energy 11 Efficiency Certificates (EECs) which represent accredited 12 eligible energy savings; 13 (g) establishing accreditation methodologies to result in only high 14 quality energy efficiency activities while minimising 15 administration costs and burdens; 16 (h) creating a demand for energy efficiency activities by requiring 17 certain purchasers (called liable entities) to surrender a 18 specified number of certificates for the electricity that they 19 acquire during a year. 20 3 Commencement 21 This Act commences on 1 January 2008. 22 Note: In accordance with section 4 of the Renewable Energy (Electricity) Act 23 2000, no liabilities will accrue under this Act after 1 January 2021. 24 4 Schedules 25 Each Act that is specified in a Schedule to this Act is amended or 26 repealed as set out in the applicable items in the Schedule 27 concerned, and any other item in a Schedule to this Act has effect 28 according to its terms. 29 30 31 [Page Break] 2 Schedule 1--Amendment of the Renewable 3 Energy (Electricity) Act 2000 4 5 1 At the end of section 3 6 Add: 7 (d) to result in greater energy efficiency and reduction 8 in energy waste; and 9 (e) to encourage investment in energy efficiency 10 activities and the development of energy efficiency 11 technologies; and 12 (f) to reduce the energy intensity and greenhouse gas 13 emission intensity of the Australian economy; and 14 (g) to contribute to the improvement of Australia's 15 productivity and energy security; and 16 (h) to reduce Australia's overall greenhouse gas 17 emissions. 18 This is achieved by: 19 (i) providing a system for recognising eligible energy 20 efficiency activities; 21 (j) creating and issuing tradeable certificates (energy 22 efficiency certificates - EECs) for eligible energy 23 efficiency savings; 24 (k) specifying who is eligible for such a certificate; 25 (l) setting a national energy efficiency target (the 26 National Market Driven Energy Efficiency 27 Target (NMDEET); [Page Break] 2 surrender a specified number of certificates for the 3 electricity that they acquire during a year. Where a 4 liable entity does not have enough certificates to 5 surrender, the liable entity will have to pay the 6 energy efficiency shortfall charge. 7 2 Subsection 5(1) 8 Insert: 9 baseline or energy efficiency activity baseline means the energy 10 consumption before the implementation of the eligible energy 11 efficiency activity. 12 certified performance means a type of eligible energy efficiency 13 activity that can be measured and accredited in accordance with 14 section 30T. 15 discount factor means the factor applied to the energy savings 16 from an eligible energy efficiency activity to reflect varying 17 operational behaviours, or the confidence level associated with the 18 eligible energy efficiency activity. 19 eligible energy efficiency activity is an activity provided for in 20 Division 3. 21 energy efficiency certificate (EEC) means an energy efficiency 22 certificate created under Part 2A. 23 energy efficiency shortfall charge has the meaning given by 24 section 38A 25 energy efficiency target percentage means the percentage fixed 26 under section 40A. 27 energy saving means the energy saved after the implementation of 28 the eligible energy efficiency activity. 29 MJ means a megajoule. 30 system boundary has the meaning given in the regulations. [Page Break] 2 that can be measured in accordance with section 30T. 3 3 After Part 2 4 Insert: 5 Part 2A--Energy Efficiency Certificates 6 Division 1--Preliminary 7 30H Overview of Part 8 This Part provides for the creation, trading and extinguishing of 9 energy efficiency certificates (EECs). 10 EECs are used to commoditise the energy saving due to the energy 11 efficiency activity and allow trading. Trading of EECs will have the 12 effect of equalising the marginal cost of compliance among the 13 liable entities. 14 EECs may be created by registered persons who operate or own 15 an eligible energy efficiency activity and are accredited by the 16 Regulator. A person may apply to the Regulator for accreditation. 17 Accredited participants include but are not limited to the following: 18 (a) energy consumers from all sectors of the economy 19 (commercial, industrial, and domestic sectors); 20 (b) intermediaries or aggregators, for example energy 21 service companies or energy retailers; 22 (c) local government or municipal utilities; 23 (d) liable entities who invest directly in an eligible 24 energy efficiency activity. 25 A liable entity is required to obtain and acquit EECs to the 26 Regulator (refer to section 38A). A liable entity will acquire an 27 EEC by: [Page Break] 2 (b) investing directly in an eligible and accredited 3 energy efficiency activity. 4 A person must be registered in accordance with Division 2 before 5 they may create or acquire an EEC. 6 Division 3A provides for provisional accreditation of an energy 7 efficiency activity. 8 A person needs to be accredited under Division 3 before an EEC 9 can be issued in relation to energy savings achieved. 10 A certificate must be registered in accordance with Division 4 11 when it is created. Every transfer of the certificate must also be 12 registered. 13 When a certificate has been surrendered by a liable entity, it ceases 14 to be valid and provision is made for the surrender of certificates. 15 30I Explaining how energy savings are measured and lead to the 16 issuing of an energy efficiency certificate 17 (1) The diagram in this section and the explanation indicates the energy 18 saving process which leads to the issuing of an EEC. The diagram 19 is intended for use only as a general introductory illustration and is 20 not intended to have any other effect. If there is an inconsistency 21 between any matter contained in the diagram or the accompanying 22 explanation in this section and a provision of this Act or the 23 regulations, the latter provision prevails. 24 25 [Page Break] 2 3 4 5 6 7 (2) Energy savings cannot be 8 directly measured, since the savings represent the absence of 9 energy use. Therefore energy savings are determined by comparing 10 measured energy use before and after any attempt at saving 11 energy. The energy used before the implementation of the energy 12 efficiency activity is referred to as the baseline. The energy used 13 after the implementation of the energy efficiency activity is the 14 post-retrofit energy use. 15 (3) The energy use before and after the implementation of the energy 16 efficiency activity may be adjusted for changes on conditions such 17 as weather and occupancy of fluctuations due to production levels 18 or economic circumstances. Such adjustments are described in 19 paragraph 30N(5)(d). 20 (4) Once a measured energy saving is quantified and accredited it is 21 eligible for certification. A certificate representing the measured 22 saving is known as an EEC. 23 (5) Eligible energy efficiency activities are those activities that can be: 24 (a) measured in units of MWh and MJ saved; and 25 (b) the measurement is capable of independent verification. 26 (6) The principles and procedures for measurement and verification of 27 the energy savings must: 28 (a) emphasise quality control, accuracy and consistency of 29 measurement and verification; 30 (b) be applied only to activities which are related to energy 31 saving; 32 (c) be defined by the system boundary, point of eligibility or 33 measurement at the site or facility level; [Page Break] 2 comply with reporting requirements in the regulations; 3 (e) comply with an energy savings determination technique, 4 based upon available data of suitable quality; and 5 (f) be able to be disclosed through data and analysis enabling 6 energy savings to be independently verifiable. 7 (7) There are three methods of accrediting and quantifying the energy 8 efficiency activity set out in section 30U. Before the energy 9 efficiency activity can be accredited a method of quantifying 10 energy savings must be selected. The method selected must, in the 11 opinion of the Regulator, be consistent with the scope, the budget 12 and the administrative complexity of the energy efficiency activity. 13 (8) In this Division a reference to energy measured in MWh is also 14 taken to refer the equivalent amount of energy in MJ, and vice 15 versa. 16 Division 2--Provisional accreditation of an energy 17 efficiency activity 18 30J Application for provisional accreditation of an energy efficiency 19 activity 20 (1) A registered person may apply to the Regulator for provisional 21 accreditation of the proposed facility of an energy efficiency 22 activity that the person considers would, if implemented, be a single 23 energy efficiency activity. 24 Form of application 25 (2) The application must: 26 (a) be made in a form and manner required by the Regulator; and 27 (b) specify the proposed components; and 28 (c) list the eligible energy efficiency activity from which the 29 energy is intended to be saved; and 30 (d) contain any other information required by the Regulator; and 31 (e) be accompanied by any documents required by the Regulator; 32 and [Page Break] 2 regulations for the making of applications for provisional 3 accreditation. 4 30K Regulator may give provisional accreditation of an energy 5 efficiency activity 6 (1) If: 7 (a) the Regulator receives an application that is properly made 8 under section 30J (about an application for provisional 9 accreditation of an energy efficiency activity); and 10 (b) the Regulator is satisfied that some or all of the proposed 11 components of the system would, if implemented, be an 12 eligible energy efficiency activity for the purposes of this Act; 13 the Regulator must, by written notice given to the applicant: 14 (c) specify which of those proposed components (provisional 15 energy efficiency components) would, if implemented, be an 16 eligible energy efficiency activity for the purposes of this Act; 17 and 18 (d) specify that, if an application is properly made under section 19 30M in relation to the energy efficiency activity: 20 (i) the Regulator will determine that the components 21 specified in that application are taken to be an energy 22 efficiency activity for the purposes of this Act if the 23 Regulator is satisfied that they are not materially 24 different from the provisional energy efficiency 25 components; and 26 (ii) the energy efficiency activity will be eligible for 27 accreditation if subsection 30M is satisfied. 28 Refusal 29 (2) If: 30 (a) the Regulator receives an application that is properly made 31 under section 30J; and 32 (b) the Regulator is not satisfied that some or all of the proposed 33 components of the system would, if assembled, be an eligible 34 energy efficiency activity for the purposes of this Act; [Page Break] 2 the application. 3 Regulations 4 (3) Regulations made for the purposes of section 30U, in relation to 5 determining the components of an eligible efficiency activity, apply 6 in a corresponding way to this section. 7 30L Time limit for deciding applications 8 (1) The Regulator must decide an application that is properly made 9 under section 30J within: 10 (a) the period of 8 weeks beginning on the day the Regulator 11 received the application; or 12 (b) if, before the end of that period, the Regulator and applicant 13 agree to a longer period--that longer period. 14 (2) If the Regulator has not decided the application within the period 15 applicable under subsection (1), the Regulator is taken, at the end of 16 that period, to have refused the application. 17 Division 3--Accreditation of eligible energy efficiency 18 activities 19 30M Application for accreditation 20 (1) A registered person may apply to the Regulator for accreditation of 21 eligible energy efficiency activities if the person: 22 (a) operates those activities (whether alone or together with one 23 or more other persons); or 24 (b) owns all, or a part, of those activities (whether alone or 25 together with one or more other persons). 26 (2) The application must: 27 (a) be made in a form and manner required by the Regulator; and 28 (b) specify the eligible energy efficiency activities; and 29 (c) specify each other person (if any) who: [Page Break] 2 one or more other persons); or 3 (ii) owns all, or a part, of those activities (whether alone or 4 together with one or more other persons); and 5 (d) contain any other information required by the Regulator; and 6 (e) be accompanied by any documents required by the Regulator; 7 and 8 (f) be accompanied by the fee (if any) prescribed by the 9 regulations for the making of applications for accreditation; 10 and 11 (g) be accompanied by a statement in writing from each other 12 person (if any) specified under paragraph (c) indicating that 13 the other person agrees to the making of the application. 14 (3) The Regulator must enter details of the application on the register 15 of applications for accredited eligible energy efficiency activities. 16 30N Regulator to determine certain matters 17 (1) If the Regulator receives an application that is properly made under 18 section 30M, the Regulator must: 19 (a) determine which components of the facility are to be taken to 20 be an eligible energy efficiency activity for the purposes of 21 this Act; and 22 (b) determine whether the energy efficiency activity is eligible for 23 accreditation. 24 (2) If: 25 (a) the Regulator gave a person a notice under section 30J in 26 relation to the energy efficiency activity; and 27 (b) the Regulator is satisfied that the components specified in the 28 application under section 30J are not materially different from 29 the components specified under section 30J; 30 the Regulator must determine, under paragraph (1)(a) of this 31 section, that the components specified in the application under 32 section 30J are taken to be an energy efficiency activity for the 33 purposes of this Act. 34 (3) An energy efficiency activity is eligible for accreditation if: [Page Break] 2 energy efficiency activity; and 3 (b) the energy efficiency activity satisfies any prescribed 4 requirements. 5 (4) However, an energy efficiency activity is not eligible for 6 accreditation if the Regulator is satisfied that a previous 7 determination under paragraph (1)(a) should be varied to include 8 the components of the facility specified in the application for 9 accreditation. 10 (5) If the Regulator determines that the energy efficiency activity is 11 eligible for accreditation, the Regulator must also determine: 12 (a) any energy used by the facility that are not eligible energy 13 efficiency activities; and 14 (b) the baseline for the eligible energy efficiency activity; and 15 (c) the post-retrofit energy use for the eligible energy efficiency 16 activity; and 17 (d) the adjustments if any for the eligible energy efficiency 18 activity; and 19 (e) define the method of accreditation as being either through 20 deeming, certifying or verifying or a combination of methods. 21 (6) The Regulator must determine the matters specified in 22 paragraphs (1)(a) and (3)(a) in accordance with guidelines 23 prescribed in the regulations. 24 (7) To avoid doubt the regulations may provide detail of the method of 25 calculating energy savings, baseline and adjustments that are 26 integral to the operation of the facility or to the use of energy by the 27 facility. 28 30O Regulator to approve or refuse application 29 If the Regulator determines that a person is eligible for 30 accreditation, the Regulator must approve the application. In any 31 other case, the Regulator must refuse the application. [Page Break] 2 (1) The Regulator must decide an application that is properly made 3 under section 30M within: 4 (a) the period of 8 weeks beginning on the day the Regulator 5 received the application; or 6 (b) if, before the end of that period, the Regulator and applicant 7 agree to a longer period--that longer period. 8 (2) If the Regulator has not decided the application within the period 9 applicable under subsection (1), the Regulator is taken, at the end of 10 that period, to have refused the application. 11 30Q Nominated person for accredited energy efficiency activity 12 If the Regulator approves an application, the applicant becomes the 13 nominated person for the accredited energy efficiency activity. 14 30R Regulator to allocate identification codes 15 If the Regulator approves an application, the Regulator must 16 allocate the facility a unique identification code and advise the 17 applicant of the code. 18 30S What is an eligible energy efficiency activity? 19 (1) An eligible energy efficiency activity is an activity that results in: 20 (a) the improvement in the service provided per unit of power 21 measured in MW or MJ, including activities which increase 22 unit output. 23 Note: Examples of activities are traction, work, electricity, heat, light or 24 fuel. 25 (b) reduced energy consumption where the consumption is: 26 (i) reduced (as measured in MW or MJ) in relation to the 27 baseline; but 28 (ii) lower consumption as a result of lower activity shall not 29 be taken into consideration; 30 (c) improvements in energy performance as measured in units of 31 MWh and MJ; [Page Break] 2 (e) related to demand for electricity, supply of electricity, or both; 3 (f) results in energy savings additional to savings that are realised 4 as a result of compliance with other legal obligations; 5 (g) an activity specified by in the regulations. 6 Regulations 7 (2) For the purposes of this Act, the regulations may provide that an 8 energy efficiency activity referred to in subsection (1) has the 9 meaning prescribed by the regulations. 10 (3) For the purposes of this Act, the regulations may make provision 11 for and in relation to limiting the meaning of an eligible energy 12 efficiency activity referred to in subsection (1). 13 Division 4--Creation of certificates 14 Subdivision I--Preliminary 15 30T Creating certificates for eligible and accredited energy efficiency 16 activities 17 (1) EECs are created according to the measurement and performance 18 of the Eligible Energy Efficiency Activity (EEEA) in accordance 19 with subsections (3), (4) and (5). 20 (2) Accreditation and assessment of the EEEA is by: 21 (a) deemed performance; or 22 (b) certified performance; or 23 (c) verified performance; 24 as set out in subsections (3), (4), (5). 25 Example: The following are examples of deeming, certification and verification: 26 (a) replacement of appliances and equipment is likely to be 27 accredited and assessed by deemed performance; 28 (b) industrial and commercial users are likely to be accredited 29 and assessed by certified performance; 30 (c) major capital upgrades and investments are likely to be 31 accredited and assessed by verified performance. [Page Break] 2 (3) An activity may be deemed as an energy efficiency activity eligible 3 for an EEC if it meets the criteria set out in the regulations which 4 must include the following: 5 (a) there is well documented statistical information supporting the 6 energy efficiency of the activity; 7 (b) the use of energy by the activity is sufficiently small; 8 (c) where the activity is subject to minimum energy performance 9 standards provided under relevant Commonwealth, State or 10 Territory legislation from time to time, the activity meets those 11 standards; 12 (d) a schedule of all activities which have been listed in the 13 regulations as energy efficiency activities. 14 Certified performance 15 (4) An activity may be certified as an energy efficiency activity 16 (certified performance), eligible for an EEC if it meets the criteria 17 set out in the regulations which must include the following: 18 (a) base year energy use normalised against economic activity or 19 production effect; 20 (b) a specific method developed for the activity which either 21 measures or simulates the measurement of energy use by the 22 activity; 23 (c) the energy savings can be replicated by a third party; 24 (d) a schedule of all activities which have been listed in the 25 regulations as certified energy efficiency activities. 26 Verified performance 27 (5) An activity may be verified as energy efficiency activity (verified 28 performance), eligible for an EEC if it meets the criteria set out in 29 the regulations which must include the following: 30 (a) there is little or no variation in energy consumption by the 31 activity; 32 (b) a schedule of all activities which have been verified as energy 33 efficiency activities; [Page Break] 2 production effect; 3 (d) a schedule of all activities which have been listed in the 4 regulations as verified energy efficiency activities. 5 Determination of energy efficiency savings 6 (6) The method used to determine the energy efficiency saving from 7 which the number of EECs is derived is to subtract the post-retrofit 8 energy use from the baseline as adjusted for variations in both the 9 baseline and post-retrofit energy use. 10 11 Baseline Method - General Equation: Energy efficiency saving Baseline energy use (+ or - adjustments) 12 Post-retrofit energy use (+ or - adjustm ents) 13 Establishing the baseline 14 (7) The method for establishing the baseline will vary depending on the 15 energy savings determination method. The baseline energy of the 16 deemed performance activities would be related to the physical 17 installation status of an activity rather than relating to baseline 18 energy use. 19 Example: A house which previously had no ceiling insulation is retrofitted with 20 insulation resulting in a deemed benefit over the lifetime of the 21 insulation. To reduce administration costs the deeming would be 22 scheduled for typical house construction, orientation, climate and 23 combined with a derating factor. 24 (8) The baseline energy use for accredited performance and verified 25 performance projects would be calculated using energy 26 consumption trends and other performance criteria and adjusted for 27 non-energy efficiency adjustments to reflect variations in demand 28 such as occupancy levels, installed equipment, weather or metering 29 errors. [Page Break] 2 30U Creating certificates for eligible energy efficiency activities 3 (1) The nominated person for an accredited eligible energy efficiency 4 activity may create an EEC for each whole MWh of energy saved 5 by the eligible energy efficiency activity during a year that is above 6 the energy efficiency activity's baseline. 7 (2) An EEC must not be created in respect of a whole MWh of energy 8 saved partly in one year and partly in the following year. 9 (3) If the amount of energy saved by an accredited and eligible energy 10 efficiency activity during a year that is above the eligible energy 11 efficiency activity baseline is less than one MWh but greater than 12 or equal to 0.5 MWh, the nominated person for the eligible energy 13 efficiency activity may create one EEC in respect of the energy 14 saved during the year. 15 (4) The amount of energy savings by an accredited and eligible energy 16 efficiency activity is to be worked out in accordance with the 17 regulations. 18 (5) Energy savings to be excluded from all calculations under this 19 section include: 20 (a) energy savings from any energy saving activities that are not 21 eligible energy efficiency activities; or 22 (b) energy savings generated during any period of suspension of 23 the accreditation of the accredited and eligible energy 24 efficiency activity. 25 (6) The nominated person for an accredited and eligible energy 26 efficiency activity must not create any EEC during any period of 27 suspension of the person's registration. 28 30V When an EEC may be created 29 An EEC may be created at any time after the energy saving from 30 the eligible energy efficiency activity is realised in relation to which 31 it is created and before the end of the year after the year in which 32 it is realised. [Page Break] 2 (1) The number of certificates (each representing one MWh energy 3 saving) that may be created in relation to an eligible energy 4 efficiency activity is to be determined in accordance with the rules 5 made by the Regulator. 6 (2) The rules made by the Regulator may make provision in relation to: 7 (a) the energy savings from the EEEA; 8 (b) calculation of the baseline for the calculation of the energy 9 savings and using energy consumption trends and other 10 performance criteria and adjusted for non-energy efficiency 11 variations in demand including occupancy levels, installed 12 equipment, weather or metering errors. 13 (c) application of any discount factor provided for in the 14 regulations to adjust for non-energy efficiency variations in 15 demand such as occupancy levels, installed equipment, 16 weather or metering errors. 17 (d) determination of the system boundary of the eligible energy 18 efficiency activity. 19 30X Who may create a certificate 20 (1) The owner of rights in relation to the EEEA, is entitled to create 21 any EEC, the creation of which becomes lawful while they are the 22 owner of those rights. 23 (2) However, the owner may, by written notice, and in accordance 24 with the rules made by the Regulator, assign the right to create the 25 EEC to another person. If the owner does this, the owner is not 26 entitled to create the EEC but the person to whom the right was 27 assigned is entitled to create the certificate or certificates. 28 (3) Despite subsections (1) and (2) a person who is not registered must 29 not create a certificate that relates to the deemed energy efficiency 30 activity. [Page Break] 2 (1) The nominated person for an accredited eligible energy efficiency 3 activity must give an energy efficiency and savings return for a 4 year to the Regulator on or before: 5 (a) 14 February in the following year; or 6 (b) any later day allowed by the Regulator. 7 (2) The return must include details of: 8 (a) the amount of energy savings generated by the eligible energy 9 efficiency activity during the year; and 10 (b) the amount of that energy savings generated eligible energy 11 efficiency activities; and 12 (c) the number of EECs created during the year in respect of the 13 energy savings generated by the eligible energy efficiency 14 activity during the year; and 15 (d) the number of EECs created during the year in respect of any 16 energy savings generated by the eligible energy efficiency 17 activities during the previous year; and 18 (e) any other information specified by the regulations; 19 and must be in the form specified by the regulations. 20 30Z Amending energy efficiency and savings returns 21 (1) The Regulator may amend an energy efficiency and savings return 22 if the nominated person for the accredited eligible energy efficiency 23 activities concerned requests, in writing, an amendment within 12 24 months of the energy efficiency and savings return being given. 25 (2) The Regulator may also amend an energy efficiency and savings 26 return on his or her own initiative if the amendment is made within 27 4 years of the return being given. 28 (3) If the Regulator refuses to amend an energy efficiency and savings 29 return upon a request by a nominated person for accredited eligible 30 energy efficiency activities, the Regulator must notify the person 31 accordingly. [Page Break] 2 30ZA Improper creation of EECs--offences 3 (1) A person is guilty of an offence if: 4 (a) the person creates an EEC; and 5 (b) the person is not entitled to create the EEC. 6 Penalty: 1 penalty unit. 7 (2) Subsection (1) is an offence of strict liability. 8 Note 1: Chapter 2 of the Criminal Code sets out the general principles of 9 criminal responsibility and Chapter 3 of the Criminal Code contains 10 general principles relating to penalties. 11 Note 2: For strict liability, see section 6.1 of the Criminal Code. 12 (3) To avoid doubt, a penalty may be imposed in respect of each EEC 13 in respect of which a person is guilty of an offence. 14 Example: An individual who commits an offence under subsection (1) by 15 creating 20 EECs that the individual was not entitled to create would 16 be subject to a maximum penalty of 20 penalty units. If the offence 17 were under subsection (3), the individual would be subject to a 18 maximum penalty of 100 units. 19 (5) In determining whether a person was not entitled to create an EEC, 20 the fact that the EEC has been registered by the Regulator under 21 section 26 is to be disregarded. 22 Note: This ensures that a person cannot raise as relevant evidence the fact 23 that an EEC has been registered. 24 Division 7--Form and registration of certificates 25 30ZB Form and content of certificates--eligible energy efficiency 26 activity 27 (1) Certificates issued under Division 4 are to be created in an 28 electronic form approved in writing by the Regulator. 29 (2) Each certificate is to contain: 30 (a) the registered person's registration number; and 31 (b) the year; and [Page Break] 2 certificates created in respect of the eligible energy efficiency 3 activity concerned in that year and that starts at one and has 4 increments of one; and 5 (d) the electronic signature of the registered person who created 6 the certificate; and 7 (e) the date on which the eligible energy efficiency activity 8 concerned was installed; and 9 (f) details of the eligible energy efficiency activity in respect of 10 which the certificate was created; and 11 (g) the date on which the certificate was created. 12 4 Heading to Division 9 of Part 2 13 After "station", insert "or eligible energy efficiency activity". 14 5 Section 30B 15 After "power station" (wherever occurring), insert "or eligible energy 16 efficiency activity". 17 6 Heading to Division 10 of Part 2 18 After "station", insert "or eligible energy efficiency activity" 19 7 Section 30C 20 After "power station" (wherever occurring), insert "or eligible energy 21 efficiency activity". 22 8 Heading to Division 11 of Part 2 23 After "station", insert "or eligible energy efficiency activity" 24 9 Section 30D 25 After "power station" (wherever occurring), insert "or eligible energy 26 efficiency activity". 27 10 After section 30E 28 Insert: [Page Break] 2 Failure to give an electricity generation return 3 (1) The Regulator may, by written notice, suspend the accreditation of 4 an accredited energy efficiency activity if an energy efficiency 5 generation return for a year, in respect of the energy efficiency 6 activity, has not been given to the Regulator in accordance with 7 section 20. 8 (2) The accreditation is suspended until the return is given to the 9 Regulator in accordance with that section. The notice must include 10 a statement to that effect. 11 Contravention of Commonwealth, State or Territory law 12 (3) The Regulator may, by written notice, suspend the accreditation of 13 an accredited energy efficiency activity if the Regulator believes on 14 reasonable grounds that the energy efficiency activity is being 15 operated in contravention of a law of the Commonwealth, a State 16 or a Territory. 17 (4) The accreditation is suspended until the Regulator believes on 18 reasonable grounds that the energy efficiency activity is not being 19 operated in contravention of that law. The notice must include a 20 statement to that effect. 21 Other circumstances 22 (5) The Regulator may, by written notice, suspend the accreditation of 23 an accredited energy efficiency activity in any other circumstances 24 prescribed by the regulations. 25 (6) The accreditation is suspended for such period (including 26 permanently) as the Regulator considers appropriate in all of the 27 circumstances. That period must be specified in the notice. 28 Note: Any electricity generated by the power station while its accreditation 29 is suspended under this section is to be excluded from all calculations 30 under section 18: see subsection 18(4). 31 11 After Division 12 of Part 2 32 Insert: [Page Break] 2 baseline 3 30G Varying an eligible energy efficiency activity 4 (1) The Regulator may, by written determination, vary the baseline for 5 an accredited energy efficiency activity in the circumstances 6 prescribed by the regulations. 7 (2) The regulations may make provision for the baseline for an 8 accredited energy efficiency activity to be varied if an action or 9 policy of the Commonwealth Government reduces the effect of the 10 energy efficiency activity for a sustained period. 11 (3) Subsection (2) does not limit subsection (1). 12 Increase in baseline 13 (4) If a determination increases the baseline for an accredited energy 14 efficiency activity, the determination has effect only for the years 15 following the year in which the determination is made. 16 Decrease in baseline 17 (5) If a determination decreases the baseline for an accredited energy 18 efficiency activity, the determination has effect for the year or 19 years specified in the determination. 20 12 Heading to Part 4 21 After "energy", insert "and energy efficiency". 22 13 At the end of section 36 23 Add: 24 (4) Subject to subsection (2), if a liable entity has an energy efficiency 25 certificate shortfall for a year, energy efficiency shortfall charge is 26 payable in respect to the shortfall. 27 (5) No energy efficiency shortfall charge is payable by a liable entity 28 for a year if its energy efficiency certificate shortfall for the year is 29 less than 10% of the liable entity's required energy efficiency for [Page Break] 2 becomes a carried forward shortfall for the year. 3 (6) Energy efficiency shortfall charge imposed in respect of a liable 4 entity's energy efficiency certificate shortfall for a year is payable 5 by the liable entity. 6 14 After section 37 7 Insert: 8 37A Amount of energy efficiency certificate charge 9 The amount of energy efficiency charge payable by a liable entity is 10 worked out using the formula: 11 12 Energy efficiency certificate shortfall rate of charge 13 where: 14 rate of charge is the rate of charge as specified under the 15 Renewable Energy (Electricity) (Charge) Act 2000 and the 16 National Mandatory Energy Efficiency Target (Charge) Act 17 2000. 18 15 After section 38 19 Insert: 20 38A Determination of energy efficiency certificate shortfall 21 The following method statement shows how to work out a liable 22 entity's energy efficiency certificate shortfall for a year. 23 Method statement--working out the energy efficiency 24 shortfall 25 Step 1. Work out the total amount, in MWh, of energy used by 26 the liable entity during the year under relevant 27 acquisitions. [Page Break] 2 efficiency percentage for the year and round the result to 3 the nearest (rounding 0.5 upwards). Add to the result any 4 carried forward shortfall from the previous year. The 5 result is the liable entity's required energy efficiency 6 savings for the year. 7 Step 3. Subtract the total value, in MWh, of energy efficiency 8 certificates surrendered to the Regulator for that year by 9 the liable entity from the required energy efficiency for 10 the year. 11 Result: If the result is greater than zero, the liable entity has an 12 energy efficiency certificate shortfall for the year equal 13 to the result. 14 If the result is zero, the liable entity does not have a 15 energy efficiency certificate shortfall for the year. 16 If the result is less than zero, the liable entity has a 17 carried forward surplus for the year. 18 16 After Division 2 of Part 4 19 Insert: 20 Division 2A--Energy efficiency target percentage 21 40A Regulations to specify energy efficiency target percentage 22 (1) The annual energy efficiency target for a year is the percentage 23 specified in the regulations. The regulation specifying a percentage 24 for a year must be made on or before 31 March in the year. 25 (2) For the year commencing on 1 January 2008 the energy efficiency 26 target is to be set at 1.0%. 27 (3) For the year commencing on 1 January 2009 the energy efficiency 28 target is to be set at 2.0%. [Page Break] 2 subsection (1), the Minister must take into consideration: 3 (a) the required energy efficiency improvement opportunity for 4 the year; and 5 (b) the amount estimated as the amount of electricity that will be 6 acquired under relevant acquisitions during the year; and 7 (c)the amount of energy efficiency saving as an accumulative 8 percentage toward the energy efficiency target of 20% by 9 2020. 10 (5) A failure to comply with subsection (4) does not affect the validity 11 of the regulations. 12 17 Heading to Division 3 of Part 4 13 After "energy", insert "and energy efficiency". 14 18 Section 41 15 After "energy" (wherever occurring), insert "and energy efficiency". 16 19 Section 44 17 After "renewable energy certificates" (wherever occurring), substitute 18 "or energy efficiency certificates". 19 20 At the end of section 45 20 Add: 21 (d) a renewable energy certificate can only be surrendered 22 against a renewable energy liability and an energy efficiency 23 certificate can only be surrendered against an energy 24 efficiency liability. 25 21 Heading to section 46 26 After "energy shortfall", insert "or energy efficiency shortfall". 27 22 Section 46 28 After "energy shortfall" (wherever occurring), insert "or energy 29 efficiency shortfall". [Page Break] 2 Insert: 3 47A First energy efficiency shortfall charge statement for year taken 4 to be assessment 5 If: 6 (a) a liable entity lodges an energy efficiency shortfall statement 7 for a year; and 8 (b) an EEC shortfall statement has not previously been lodged, 9 and an assessment has not previously been made for the year 10 in relation to the liable entity; 11 then: 12 (c) the statement has effect as an assessment of the liable 13 entity's EEC shortfall for the year and of the energy 14 efficiency shortfall charge (if any) payable on the shortfall; 15 and 16 (d) the assessment is taken to have been made on 14 February in 17 the following year or the day on which the statement was 18 lodged, whichever is the later; and 19 (e) the EEC shortfall specified in the statement is taken to be the 20 liable entity's energy efficiency certificate shortfall for the 21 year; and 22 (f) the amount of EEC shortfall charge (if any) specified in the 23 statement is taken to be the amount of EEC shortfall charge 24 payable by the liable entity for the year; and 25 (g) the statement has effect as if it were a notice of assessment 26 signed by the Regulator and given to the liable entity on the 27 day on which the assessment is taken to have been made. 28 24 Section 48 29 After "energy shortfall" (wherever occurring), insert "or energy 30 efficiency shortfall". 31 25 Section 48 32 After "energy certificate" (wherever occurring), insert "or energy 33 efficiency certificate". [Page Break] 2 After "energy shortfall" (wherever occurring), insert "or energy 3 efficiency shortfall". 4 27 Subsection 50(1) 5 After "energy shortfall", (wherever occurring), insert "or energy 6 efficiency shortfall". 7 28 Section 65 8 After "energy shortfall", insert "or energy efficiency shortfall". 9 29 Subsection 66(1) (table) 10 Insert: 11 Table of reviewable decisions Item For a decision ... made under ... the affected person is ... 2A in relation to an application section 14 the applicant for for accreditation of an accreditation. eligible energy efficiency activity 3B to refuse to accredit an section 15 the applicant for eligible energy efficiency accreditation. activity 3C to amend, or to refuse to section 20A the nominated person for amend, an energy the accredited eligible efficiency generation energy efficiency activity. return 5F to refuse to approve a section 30B the person. person as the nominated person for an accredited eligible energy efficiency activity 5G to vary, or to refuse to section 30C the nominated person for vary, a determination under the accredited eligible paragraph 14(1)(a) energy efficiency activity concerned. [Page Break] Item For a decision ... made under ... the affected person is ... 5H to suspend the section 30D or the nominated person for accreditation of an 30E the eligible energy accredited eligible energy efficiency activity. efficiency activity 5D to vary the eligible energy section 30F the nominated person for efficiency activity baseline the eligible energy for an accredited eligible efficiency activity. energy efficiency activity 1 30 After section 67 2 Insert: 3 67A Collection and recovery of energy efficiency shortfall charge etc. 4 The provisions of Divisions 1 and of 2 of Part 7 relating to 5 collection and recovery of charge apply to the energy efficiency 6 shortfall charge, and all references in that Part to charge and 7 energy shortfall charge shall be read as references to the energy 8 efficiency shortfall charge for the purpose of this Part. 9 31 After section 95 10 Insert: 11 95A Refunding energy efficiency shortfall charge in later years 12 The provisions of Part 8 relating to refunding of charge apply to the 13 refunding of the energy efficiency shortfall charge, and all 14 references in that Part to charge or energy shortfall charge shall be 15 read as references to the energy efficiency shortfall charge for the 16 purposes of this Part. 17 32 After section 99 18 Insert: [Page Break] 2 The provisions of Part 9 relating to penalty charge apply to the 3 energy efficiency shortfall charge, and all references in that Part to 4 charge or energy shortfall charge shall be read as references to the 5 energy efficiency shortfall charge for the purposes of this Part. 6 33 Section 134 7 After "renewable energy" (wherever occurring), insert " or energy 8 efficiency". 9 34 At the end of section 135 10 Add: 11 (e) the register of accredited eligible energy efficiency activities; 12 (f) the register of energy efficiency certificates; 13 (g) the register of applications for accredited eligible energy 14 efficiency activities. 15 35 After section 138 16 Insert: 17 138A Contents of register of accredited eligible energy efficiency 18 activities 19 The register of accredited eligible energy efficiency activities is to 20 contain: 21 (a) the name of each accredited eligible energy efficiency 22 activity; and 23 (b) the name of the nominated person for the accredited eligible 24 energy efficiency activity; and 25 (c) the identification code for each accredited eligible energy 26 efficiency activity; and 27 (ca) the baseline for each eligible energy efficiency activity 28 (including any variation of that baseline under section 30F); 29 and 30 (d) any other information that the Regulator considers 31 appropriate. [Page Break] 2 After "certificate" (wherever occurring), insert "and energy efficiency 3 certificate". 4 37 After paragraph 140(da) 5 Insert: 6 (db) the eligible energy efficiency activity in respect of which the 7 certificate was created; and 8 38 After section 141A 9 Insert: 10 141AB Contents of register of applications for accredited eligible 11 energy efficiency activities 12 The register of applications for accredited eligible energy efficiency 13 activities is to contain: 14 (a) the name of each applicant for an accredited eligible energy 15 efficiency activity; and 16 (b) the location of the eligible energy efficiency activity; and 17 (c) the eligible energy efficiency activity type or accreditation 18 methodology proposed to be used by the eligible energy 19 efficiency activity; and 20 (d) any other information that the Regulator considers 21 appropriate. 22 39 Heading to Part 14 23 After "Energy" (twice occurring), insert "and Energy Efficiency". 24 40 Heading to Division 1 of Part 14 25 After "Energy", insert "and Energy Efficiency". 26 41 Heading to Division 2 of Part 14 27 After "Energy", insert "and Energy Efficiency". 28 42 Section 149 29 After "energy" (twice occurring), insert "and energy efficiency". [Page Break] 2 Repeal the section, substitute: 3 150 Functions 4 The functions of the Office of the Renewable Energy and Energy 5 Efficiency Regulator are to: 6 (a) assist the Regulator in performing the Regulator's functions; 7 and 8 (b) assist the Regulator with the administration of the energy 9 efficiency target percentage.