The Energy Regulation and Markets Review - Stikeman Elliott

Australia
Geothermal
Geothermal energy is another focus area for technological development through the
Emerging Renewables Program and Renewable Energy Demonstration Program (both
to be consolidated into ARENA). As of 2011 only one Australian commercial geothermal
plant with an installed capacity of 0.12MW and owned by Ergon Energy was operating
in Birdsville, Queensland. However, other projects are under development. 42
Smart Grid, Smart City trial
Under the Australian government’s National Energy Efficiency Initiative – Smart Grid,
Smart City, Energy Australia, and its consortium partners (IBM Australia, GE Energy
Australia, AGL Energy, Sydney Water, Hunter Water Australia, and Newcastle City
Council) are deploying Australia’s first commercial-scale smart grid demonstration project,
based in Newcastle, NSW. 43 The A$100 million initiative aims to result in nationwide
advances in energy management by gathering comprehensive information about the costs
and benefits of smartgrids to inform future decisions by government, electricity providers,
technology suppliers and consumers across Australia. 44 Smart meters are also currently
being rolled out to residential and small business electricity customers across Victoria. 45
VI
THE YEAR IN REVIEW
Carbon
The most significant legislative change for the Australian energy sector in the 2011–12
financial year, and indeed in recent times, has been the introduction of the Clean Energy
Act 2011 (Cth) and associated legislation for the implementation of a carbon pricing
mechanism (‘the CPM’) in Australia. The object of the CPM is to reduce Australia’s
carbon emissions to 5 per cent below 2000 levels by 2020. The CPM forms part of the
Commonwealth government’s Clean Energy Future Plan and commences on 1 July 2012.
The CPM will generally impose liability on a person who has operational control
of a facility that has direct greenhouse gas emissions of 25,000 tonnes of carbon dioxide
equivalent emissions or more for a given year. The Australian government has estimated
that there will be approximately 500 entities with direct liability to acquire and surrender
eligible emissions units under the CPM.
The CPM will operate in two distinct phases:
a the fixed-charge period, which will operate from 1 July 2012 for the first three
financial years of the scheme; and
b the flexible-price period, which will operate from 1 July 2015 onwards.
42 See www.ret.gov.au/energy/clean/acre/redp/Pages/default.aspx.
43 Australian government, 2011, Department of Resources, Energy and Tourism, Australia, www.
ret.gov.au/energy/energy_programs/smartgrid/Pages/default.aspx.
44 Department of Resources, Energy and Tourism, Draft Energy White Paper 2011: Strengthening
the foundations for Australia’s energy future, Canberra, December 2011, available at www.ret.
gov.au/energy/Documents/ewp/draft-ewp-2011/Draft-EWP.pdf.
45 Australian Energy Regulator, Australia, www.aer.gov.au/content/index.phtml/itemId/743595.
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