Page 2207 - Week 08 - Tuesday, 4 August 2015

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I think that demonstrates that the scheme has provided good economic outcomes for households right across the ACT but in addition the EEIS plays an important role in the territory’s drive towards becoming a carbon neutral jurisdiction especially in the context of the ACT’s renewal energy target of 90 per cent of electricity coming from renewable sources by 2020. Put simply, we know that energy efficiency measures are cheaper than generation activities and that they improve quality of life at the same time. We know that improving household energy efficiency in the territory will mean that we can reach our 90 per cent target more easily and at lower costs than if we did not undertake those activities. Importantly, the amount of renewable energy we need to purchase in 2020 is based on projected energy consumption which assumes improvements in energy efficiency resulting from the EEIS.

It is because of the ACT’s renewable energy target that many of the parameters under the scheme are expected to change under the extension of the scheme and that is an important but technical part of this legislation. Effectively the cost of a tonne of abatement will rise due to the ACT producing more zero carbon electricity through to 2020. Consequently the regulatory impact statement for the scheme produced in May this year flags that the extended target out to 2020 is likely to be reset at 8.6 per cent, as to keep the same target while the cost of abatement rises considerably would result in an increased cost of the scheme overall. The level of activity under the scheme should stay about the same and the pass-through costs will drop slightly. It delivers a much stronger incentive to engage in activities that save natural gas. A tonne of abatement on gas will be cheaper than a tonne of abatement on electricity.

A number of changes to the act were flagged in the regulatory impact statement and many of those are being implemented today. Firstly, this bill extends the life of the scheme to the end of December 2020. It increases the notice that is required to be given by the minister to make increases to any of the targets under the scheme, increases the period of time in which a minister must make a determination in advance of putting both the EE target—the energy efficiency target—and the priority household target up from three months to six months, and where the emission multiplier goes up this now also needs six months notice rather than the current period of three months.

This bill also sets up the capacity for abatement providers under the new section 17A outside of tier 1 retailers and their contractors to be approved under the act. This will allow other parties to undertake abatement activities which would allow tier 2 retailers who have fewer than 500 customers but still have obligations under the act to have the capacity to buy abatement.

This is likely to be a better outcome for them rather than simply paying the penalties under the act but not delivering the abatement. I think this is a very good improvement to the scheme and will hopefully also open up the market for energy efficiency services in the territory, creating new business opportunities for those with both the expertise and the wherewithal to enter this space. I think that is a good opportunity from an economic point of view that this change to the legislation will hopefully unlock. Changes also require that the abatement providers must lodge compliance plans before undertaking abatement activity to ensure that, of course, those who do come into the market do so on a basis of integrity and not some attempt to perhaps make a quick and easy buck.

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