30 October 2006
Key Points:
South Australia's progressive attitude to energy reform has culminated in the Climate Change and Greenhouse Emissions Reduction Bill 2006 and the new solar feed-in initiatives.
Premier Mike Rann has called South Australia the "exemplar of the nation", and the world, because of the progressive nature of greenhouse gas emission reduction and renewable energy legislation that is set to be introduced in that state. South Australia's Climate Change and Greenhouse Emissions Reduction Bill 2006 (the "Climate Change Bill") will be introduced before Christmas, said Premier Rann. In addition, the promise of new legislation for a solar "feed-in" rebate for South Australians was also recently announced, which will pay householders up to double the standard electricity retail price for putting solar power back into the main electricity grid.
The Climate Change and Greenhouse Emissions Reduction Bill 2006
South Australia's Climate Change and Greenhouse Emissions Reduction Bill 2006 represents the first attempt nationally to enforce the reduction of greenhouse gas emissions and to increase the consumption of renewable energy through legislation on the state as a whole.
Specifically, the legislation has the primary objectives of:
The Climate Change Bill will also establish the Premier's Climate Change Council, which will consist of five members from different sectors including the government, business or scientific community for terms of three years.
The Council's function will be to provide advice to the Minister on the impact of climate change on business and the community while also looking at the impact of the legislation on the business community. In addition, it will also address the balance of costs associated with reducing or limiting climate change or greenhouse emissions with those of failing to take such action.
We note that, aside from the voluntary agreements as discussed below, the Climate Change Bill only sets out general objectives and does not impose any specific obligations.
Sectoral agreements also form a part of the Climate Change Bill's policy, with the Minister able to enter into agreements with a particular person or industry on a voluntary basis for the purpose of promoting strategies to meet the target set by the legislation. Such agreements would address the objectives of a particular industry or sector of the State's economy.
As the substantive provisions of the Climate Change Bill impose a general obligation on the State as a whole there are no penalty provisions, aside from those that apply to the purely mechanical sections such as breach of confidentiality or conflict of interest and a $10,000 penalty for providing misleading information to the Minister. The Bill does allow the Governor to enact regulations which can prescribe fines not exceeding $10,000 for the contravention of a regulation, but there is no indication as to what those obligations may be.
The Solar "feed-in" rebate
As part of South Australia's action on global warming and the prospective legislative obligation to increase the use of renewable energy by 20%, the government has announced a new plan to reward householders who install solar power in their homes.
Under the legislation, the surplus electricity derived from solar panels will be put back into the electricity grid meaning that homeowners can earn a profit from their solar power contributions.
Premier Rann said the State Government will start consulting with energy retailers, regulators and distributors about the new legislation.
The Australian Business Council for Sustainable Energy says that this holds enormous potential to relieve the pressure on Australia's electricity network, which is estimated to need $24 billion worth of infrastructure investment over the next five years. South Australia currently has 45% of the nations grid-connected solar power. Already South Australia's Parliament, art gallery, museum and state library are solar powered.
Conclusion
The targets set out by the South Australia initiatives are challenging and it will be interesting to see whether they can be achieved solely through voluntary means.
For further information, please contact Paul O'Donnell.
