Bruce Billson (Dunkley, Liberal Party, Minister Assisting the Minister for Defence) Share this | Hansard source

I would like to acknowledge the contributions of all colleagues to this debate on the Renewable Energy (Electricity) Amendment Bill 2006. This bill before the House implements the government’s response to the 2003 review of the Renewable Energy (Electricity) Act 2000 and reconfirms the government’s commitment to the mandatory renewable energy target under what is otherwise known as the MRET scheme. The act is a world-leading piece of legislation that a number of countries have modelled for promoting renewable energy through a market based trading system. The MRET, which requires that minimum amounts of additional renewable energy be sourced by wholesale electricity purchasers, is a significant greenhouse abatement measure, driving in excess of $3 billion in renewable energy investment to 2010 and increasing renewable energy generation by more than 50 per cent, compared to pre-MRET levels. Since the measure commenced on 1 April 2001, over 230 power stations have been accredited, encompassing small and large producers using a wide range of fuel types.

To assist market transparency, the bill introduces a time limit following renewable energy generation during which renewable energy certificates for that generation must be created. The bill also allows for the publication of additional data relating to renewable energy generation such as existing baselines and additional information on a liable party’s renewable energy certificate shortfalls. The bill also provides a process for granting provisional accreditation from the renewable energy regulator prior to commissioning and introduces a time limit for the regulator’s consideration of applications for accreditation of generators.

The bill increases opportunities for bioenergy and solar technologies. Opportunities for bioenergy are increased by enabling renewable energy certificates to be created for a broader ranger of renewable material, broadening the scope of wood from plantations to be eligible as a renewable energy source under the measure. Amendments in this bill allow more solar water heating systems installed to be eligible to create renewable energy certificates and expedite the process by which certificates can be claimed for new solar water heater models as they become commercially available. In addition to these amendments, the bill provides for the surrender of renewable energy certificates by persons who do not have a liability under the act. This will allow interested individuals or organisations to purchase certificates and voluntarily retire them from circulation. The bill also contains a range of administrative amendments to provide greater clarity about what is an eligible renewable energy source, what is an accredited power station and what is a relevant acquisition of electricity. Similar amendments to vary or amend documentation or decisions allow the regulator to address mistakes made by participants or respond to changing circumstances, additional information or the results of monitoring and compliance actions.

Concerns have been raised by the opposition that the bill does not go far enough and that the government should increase the mandated renewable energy target. However, increasing the MRET would impose significant economic costs through higher electricity prices in Australia. Targets of five per cent and above could increase the cumulative economic costs of the MRET by $10 billion. The decision not to increase the target should also be seen in the context of the government’s strategic focus as articulated in the energy white paper which was released in June 2004. The white paper focuses on developing a broad range of the low-emission technologies needed for deployment at scale in the future to make the deep cuts in the greenhouse emissions that scientists tell us will be needed over the next several decades. The government considers a more effective path to a sustainable energy future is to encourage a broad range of low-emission technologies, including renewables, and to further address barriers and impediments to the uptake of renewable energy. The energy white paper contains a number of new initiatives and articulates an effective pathway to a sustainable energy future.

Concerns have been raised by sections of the renewable energy industry that the gaming provisions in the bill may unintentionally penalise or discourage, for example, sugar mills and refineries from optimising or expanding their core operations or improving their electricity generation efficiency and capacity. This is not the government’s intent, as is indicated in the explanatory memorandum to the bill. To clarify this situation, the government amendment circulated in my name will allow regulations to be made which will specify certain matters that the regulator must take into account when making his or her decision on gaming. I table the supplementary explanatory memorandum. This government amendment has the support of the sugar industry and will provide some certainty to the industry in relation to this issue. I acknowledge the input and advocacy of Senator Boswell on this matter and encourage the ongoing engagement of the sugar industry with the government to ensure that the concerns about unintended consequences—(Time expired)

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