Climate Change Authority

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PERFORMANCE

This section of the report describes the Authority’s performance in achieving the deliverables against the key performance indicators for Program 1.1: Reviewing Climate Change Mitigation Policies, as published in the Climate Change and Energy Efficiency Portfolio Budget Statement 2012-13 and set out in the table below:

 

PROGRAM 1.1 Reviewing Climate Change Mitigation Policies

PROGRAM OBJECTIVE

The Authority’s objective is to contribute to the sound governance of climate change mitigation initiatives by ensuring these are efficient and effective through recommending improvements to their design and operation.

DELIVERABLES

  • Complete review of the Renewable Energy Target.
  • Complete other reviews as requested by the Minister or Parliament.

KEY PERFORMANCE INDICATORS

  1. The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.
  2. The delivery of reviews within legislated timeframes.
  3. The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.
  4. The independence of the Authority’s decision-making in conducting and completing reviews, including the perception of independence by stakeholders.

4.1 REVIEW OF THE RENEWABLE ENERGY TARGET

4.1.1 LEGISLATIVE REQUIREMENTS OF THE REVIEW

The first review of the Authority was of the Renewable Energy Target scheme (RET review).

The Renewable Energy (Electricity) Act 2000 (REE Act) and the Climate Change Authority Act 2011 set out the legislative requirements for the RET review in respect of timing, scope, conduct, recommendations and publication.

The Authority is required to conduct reviews of the RET every two years and must examine:

  • the operation of the REE Act and the scheme constituted by the REE Act;
  • the operation of the regulations;
  • the operation of the Renewable Energy (Electricity) (Large-scale Generation Shortfall Charge) Act 2000;
  • the operation of the Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010; and
  • the diversity of renewable energy access to the scheme constituted by the REE Act, to be considered with reference to a cost benefit analysis of the environmental and economic impact of that access.

In conducting a review, the Authority must make provisions for public consultation.

The first review of the RET had to be completed by 31 December 2012. The Authority was required to submit a copy of its report to the Climate Change Minister and publish the report on the Authority’s website as soon as practicable after giving the report to the Minister.

The Minister was required to table the report in the Parliament within 15 sitting days of receiving it and respond to any recommendations within six months.

4.1.2 CONDUCT OF THE REVIEW

In line with the legislative requirements, the Authority interpreted the scope of its review as covering:

  • the capacity of the RET arrangements to support additional generation of electricity from renewable sources to contribute reductions in greenhouse gas emissions at reasonable cost;
  • the role of the RET and its relationship to other policy measures;
  • the Large-scale Renewable Energy Target (LRET), including the level and trajectory of the target;
  • the Small-scale Renewable Energy Scheme (SRES), including its design, architecture, and administration;
  • the liability and exemptions framework, and the shortfall charge of both the large-scale and small scale schemes;
  • the eligibility framework for both schemes and the diversity of renewable energy; and
  • the frequency and scope of future reviews under the REE Act.

As required, the Authority consulted widely with interested parties throughout the review, including energy retailers and consumers, environmental and welfare groups, and the renewable energy industry.

To assist the consultation process, the Authority released an issues paper and a discussion paper.

The issues paper (released 20 August 2012) described the RET scheme and requested feedback from stakeholders on particular questions. Almost 8 700 submissions were received.

The discussion paper (released 26 October 2012) set out the Authority’s preliminary views on key issues. The discussion paper formed the basis for further consultation, including four stakeholder consultation roundtables held on 2 and 5 November 2012 in Melbourne and Sydney respectively. A summary of these discussions has been published on the Authority’s website along with a list of the participating stakeholders. The Authority received 54 written responses to the discussion paper and held more than 60 one-on-one meetings with participants over the course of the review.

4.1.3 PUBLICATION AND RESPONSE

The Authority provided the final report to the Climate Change Minister and published it on the Authority’s website on 19 December 2012.

The Authority made 34 recommendations to the Australian Parliament.

The key recommendation was that the Authority recommended the legislated large-scale target remain fixed at 41 000 gigawatt hours, as currently legislated. It was the Authority’s view that adjusting the target up or down would entail significant risks. It would likely reduce investor confidence and increase risk premiums for renewable energy projects.

The Authority also found the costs of the RET scheme to households and small and medium sized businesses are modest.

The full list of the Authority’s recommendations can be found in the final report on the Authority’s website.

The Climate Change Minister tabled the Authority’s report in the House of Representatives and responded to the Authority’s recommendations on 21 March 2013.

The Minister accepted the majority of the Authority’s recommendations, including keeping the legislated large-scale target fixed at 41 000 gigawatt hours.

The Minister indicated the Australian Government would not pursue three recommendations. Three recommendations were agreed-in-principle and subject to further consultation in the first half of 2013:

  • permitting large energy users to opt-in to assume direct liability for RET obligations;
  • making Partial Exemption Certificates tradeable; and
  • allowing for incidental electricity offtakes under the self-generators exemption that provide community benefits in remote locations.

The Minister indicated that recommendations requiring legislative change, including moving to full reviews of the RET every four years, would be introduced in 2013.

 

4.1.4 PERFORMANCE AGAINST KEY PERFORMANCE INDICATORS

The following is an assessment of the Climate Change Authority’s performance in conducting the RET review against the key performance indicators from the Climate Change and Energy Efficiency Portfolio Budget Statement 2012-13.

1. The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.

  • In conducting the RET review, the Authority undertook rigorous research and analysis, including commissioning electricity sector modelling, and extensive stakeholder consultation to ensure it developed well informed and evidence based recommendations.
  • The Government accepted 28 of the Authority’s recommendations and agreed in principle to three recommendations, which reflects acceptance of the conduct and conclusions of the Authority’s review.
  • The Authority’s recommendations have been widely acknowledged and understood by stakeholders. The recommendations have received extensive reporting in the media and are quoted in media articles and discussions on the future of the RET scheme.

2. The delivery of reviews within legislated timeframes.

  • The Authority delivered the final report on the RET review to the Minister on 19 December 2012, ahead of the date required under legislation.

3. The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.

  • The Authority conducted extensive public consultation during the course of the review. An issues paper and discussion paper were released which called for submissions from the public. The Authority also held a number of roundtable consultation events and one-on-one meetings with stakeholders. The Authority considered the number of submissions, over 8 700 written responses, to be a validation of the transparency and accessibility of theprocess. The Authority received positive feedback on its efforts to consult, especially given the tight timeframes involved.

4. The independence of the Authority’s decision- making in conducting and completing reviews, including the perception of independence by stakeholders.

  • In conducting the RET review, the Authority acted independently, ensuring its final recommendations were supported by extensive and rigorous research and analysis. The transparency of the review process, through regular public consultations and engagement, further illustrated the independent conduct of the Authority.

4.2 OTHER REVIEWS AS REQUESTED BY THE MINISTER OR PARLIAMENT.

Under section 59 of the Climate Change Authority Act 2011, the Climate Change Minister or the Parliament may request reviews of matters relating to climate change.The Authority did not receive any requests from the Minister or Parliament in 2012-13.