From the beginning of June 2013, ‘standing notices’ disclosing the status of compliance with all local, state and federal planning and approval requirements must be lodged each time an accredited Renewable Energy Target power station creates large-scale generation certificates.

"The standing notice was introduced to enhance the integrity of the large-scale renewable energy target," a spokesperson for the Clean Energy Regulator said.

Disclosure of non-compliance will not automatically result in a suspension of a power station’s accreditation, but the Clean Energy Regulator, in considering any regulatory response, will take into account the conduct of scheme participants, including their compliance history.

Who does this affect?

  • All large-scale power stations accredited under the renewable energy target (RET) (ie those which generate their electricity from approved sources such as solar energy, wind, ocean waves and the tide, geothermal-aquifers, wood waste, agricultural waste, bagasse (sugar cane waste), black liquor (a by-product of the paper-making process), or landfill gas).
  • Anyone with a present or future acquisition or investment interest in large-scale renewable energy power stations.

Background

Accredited RET power stations are entitled to create large-scale generation certificates (LGCs) in the Renewable Energy Certificate (REC) Registry based on the amount of renewable electricity they produce above their baseline. LGCs are then available for purchase and/or surrender.

Under the Renewable Energy (Electricity) Act 2000 (RE Act) an accredited RET power station must confirm its compliance with Commonwealth, state, territory and local government planning and approval requirements to maintain its accreditation status. The RE Act provides that accreditation may be suspended if the Clean Energy Regulator believes that the power station is operating in contravention of a law or approval. Until recently confirmation of compliance was required to be made only in the power station’s annual Electricity Generation Return.

In response to widespread community complaints, the Renewable Energy (Electricity) Amendment (Excessive Noise from Wind Farms) Bill 2012 debated in the Senate earlier this year, proposed powers to ensure that accredited wind farms do not create excessive noise. In particular, it was proposed to remove the discretion of the Clean Energy Regulator to suspend accreditation of a power station and replace that power with a mandatory requirement for the Clean Energy Regulator to act when a power station contravenes the law. Even though the proposed amendments failed, the Clean Energy Regulator opted, in addition to the annual disclosure in the Electricity Generation Return, to require details of any non-compliance every time LGCs are created.

How different are these requirements?

What is unique about this reform is the frequency of the disclosure of the information, which can be as often as every month. Ongoing compliance for accredited RET power stations is now monitored and supplemented by accredited power station standing notice disclosure during creation of LGCs, annual compliance statements (Electricity Generation Returns) and risk based audits as required.

The changes do not go so far as to remove the discretion of the Regulator to suspend the accreditation of an accredited RET power station if the Regulator believes that the power station is operating in contravention of a law or approval, but the Clean Energy Regulator has advised that the standing notice disclosure regime is designed to ensure the Regulator is able to identify issues related to non-compliance at the time LGCs are created.

The stated policy of the Clean Energy Regulator is to ensure, amongst other things, that regulatory responses, including risk audits, enforceable undertakings, suspension of accreditation and/or civil penalties, are proportionate to the risks proposed by any non-compliance and take into account the conduct of scheme participants, including their compliance history.

What do you need to do?

You need to be aware that ongoing compliance is monitored not only by annual Electricity Generation Returns and possible risk based audits, but also now supplemented by accredited RET power station standing notice disclosure completed during creation of LGCs.

Generators should review and update environmental management plans and audit programs to ensure potential non-compliances are quickly identified and addressed.

There is still considerable public controversy regarding the environmental impacts of wind power, especially in relation to noise. This issue may be the subject of even greater regulation which will affect both the operation of power stations and their economic feasibility.