Key Points:

A new ACT Bill aims to bring forward its target of zero net emissions by a decade to give effect to the Government's recent policies on greenhouse gas emission reduction and renewable energy targets.

On 5 May 2016, the Renewable Energy Legislation Amendment Bill 2016 was passed by the ACT Parliament. Upon commencement, the Bill will make amendments to the Climate Change and Greenhouse Gas Reduction Act 2010 and the Electricity Feed-in (Large-scale Renewable Energy Generation) Act 2011(FiT Act).

Greenhouse gas emission reduction and renewable energy targets

The purpose of the Climate Change Act is to set targets for reducing greenhouse gas emissions in the ACT, provide for monitoring and reporting in relation to targets, facilitate the Government’s development of policies and programs to meet the targets and to address and adapt to climate change and to encourage private entities to take action to address climate change and recognise the entities that take action.

Currently, the Climate Change Act sets the following targets to reduce greenhouse gas emissions in the ACT:

  • principal target ‒ to reduce greenhouse gas emissions to achieve zero net emissions [1] by 30 June 2060;
  • interim targets ‒ to reduce greenhouse gas emissions to:
    • 80% less than 1990 emissions by 30 June 2050.

Under the Climate Change Act, the Minister is also required to determine targets for the use or generation of renewable energy in the ACT. The Minister made a determination in 2011 to set the Renewable Energy Target as 25% by the year 2020. A subsequent determination was made in 2013 to increase the amount to 90% by the year 2020. At the end of April this year, the Minister made a determination to further increase the Renewable Energy Target to 100% by the year 2020.

Feed-in tariff

The purpose of the FiT Act is to promote the establishment of large-scale facilities for the generation of electricity from a range of renewable energy sources to reduce the ACT’s contribution to greenhouse gas emissions and help achieve targets to reduce the ACT’s greenhouse gas emissions.

To achieve this purpose, the FiT Act currently supports the feed-in tariff scheme where large renewable energy generators with a total capacity of 550MW (FiT capacity) which are connected to the interconnected national electricity system are entitled to receive support payments in respect of "eligible electricity" (ie. electricity generated using a renewable energy source and sold through the national electricity market or directly to a market participant) (Feed-in Tariff (FiT) entitlements).[3]

Proposed amendments

The Paris Agreement's main aim is to keep global temperature rise this century well below 2 degreesCelsius, and to drive efforts to limit the temperature increase even further to 1.5 degrees Celsius above pre-industrial levels.

To meet this target in the ACT by mid-century the Bill amends the Climate Change Act to bring forward the target date for zero net emissions from 30 June 2060 to 30 June 2050.

Consequently, the Bill will also remove the second interim target of 80% less than 1990 levels by 30 June 2050, which will become redundant with the new 2050 deadline.

To meet the zero net emissions target a decade earlier than originally required under the Climate Change Act, the Bill amends the FiT Act to:

  • increase the total FiT capacity of the generating systems of large renewable energy generators in relation to which FiT entitlements may be held under the FiT Act from 550MW to 650MW; and
  • allow FiT entitlements to be granted to large renewable energy generators immediately after the total FiT capacity is increased (ie. upon commencement of the amending legislation).

Commencement

Now that the Bill has been passed, it will commence on the day after its notification day.