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Sunshine Hydro Pty Ltd
ACN 614 368 286
Level 10, 1 Eagle Street, Brisbane, QLD 4000
www.sunshinehydro.com
Department of Climate Change Energy Environment and Water
Submission of response on Renewable Energy Certification
By email to GuaranteeofOrigin@industry.gov.au
Sunshine Hydro is pleased to be able to submit our views on the REGO scheme.
Kind regards
Chris Baker
Chief Technology Officer
Sunshine Hydro
EXECUTIVE SUMMARY
Context
We have a once-in-a-lifetime chance to revamp the way renewable energy is certified. Currently, the focus is on how much energy is produced, without considering when and where it's made. But if we change that and tie certification to the time and place energy is produced, we will be able to achieve a 100% renewable energy system.
The policy position paper has some great ideas, but some elements of the Renewable Electricity
Guarantee of Origin (REGO) design could hold us back. We love the idea of making all renewable energy eligible, but this is about more than just bringing in energy that was previously excluded. It's also about moving from a scheme that only rewards new energy producers to one that accurately tracks and values all renewable energy, and particularly identifies when it's produced.
We should design REGOs to be flexible, so that they can adjust to changes in technology and usage. For example, if 24/7 matching becomes popular (and we’re betting that it will), REGOs should support that.
The goal should be to create REGOs that accurately reflect the value of renewable energy, by being cheaper when there's a surplus and more expensive when there's a shortage. This is already how the energy market in Australia works, and it makes sense to have an alignment between the energy delivery and the certification.
To make this happen, we need to align REGOs with the dispatch mechanisms used by the Australian Energy
Market Operator (AEMO), so that they work well with the National Electricity Market and can accurately value energy that can fill in the gaps in intermittent sources. The registry meta-data proposed for REGOs right now is limited, so we need to look at it more closely and make sure it's adaptable to changing needs.
Finally, it's important to remember that existing accounting and marketing schemes rely on the Large- scale Renewable Energy Target and Large-scale Generation Certificates. So, if these are backed by the government, it's crucial to have a parallel process that brings the new REGO framework in line with them.
This will give everyone confidence in the new system.
Key Points
Alignment with International Initiatives
There is significant momentum behind the 24/7 carbon-free energy movement and related certification initiatives on a global basis. There are currently over 100 signatories to the United Nations 24/7 Carbon- free Energy Compact 4 including two national governments and with the cities of London, Paris and
Copenhagen. 400 organisations are participating in the EnergyTag granular Certificate standard development. The European Union’s Renewable Energy Directive (REDIII) has recommended time and location matching renewable energy claims in future guarantee of origin schemes “…a framework for electrification needs to enable robust and efficient coordination and expand market mechanisms to match both supply and demand in space and time…” In the United Kingdom, the Department for Business, Energy and Industrial Strategy’s Green Hydrogen standard requires time-matching of energy used by electrolyser from renewable electricity inputs.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Meanwhile on an international stage, the World Resources Institute is currently considering listing time and location matching as a recommended higher level standard for Scope 2 emissions accounting in the next release of the Greenhouse Gas Protocol.
Corporate and government emissions reporting will also take these time and location characteristics increasingly into consideration as evidenced by the growing membership of the United Nation’s 24/7
Carbon-free Energy (24/7 CFE) compact. We therefore believe it is important that design of the Australian
REGO scheme includes time-matching of a suitable granularity and methodology to align with these global initiatives.
The LRET and the SRES both have a finite lifetime, yet there remains a need to value the contribution that these renewable resources have in providing carbon-free energy. The proposed framework should look to considerately incorporate these existing frameworks as a complimentary part of the new framework, rather than a competing and completely parallel system.
Getting granularity right
1 MWh / 1 hour granularity with “carry-over” invalidates the purpose of time-matching.
The proposed 1MWh REGO certificate size means that when timestamping is applied there will be “overs- and-unders” in each time period. By definition carrying energy from one time period over to a later time period invalidates the timestamp applied to that energy.
We’re not suggesting there won’t be unders and overs in energy accounting systems — there will be; due to forecasting inaccuracies, ramping characteristics, plant breakdown and so on — but there’s no need to design them into the certification system. If the granularity is chosen well, the certificates can be whole at the end of each interval.
By getting the granularity right, each certificate can be properly finalised at the end of a 5 minute interval.
We propose that a Superhybrid would deliver hour by hour balanced renewable energy that is on an hour by hour basis the load and generation profiles will be matched to a close tolerance. By measuring the load and generation on a five minute basis it allows for corrections to be made progressively where there is an inevitable mismatch between forecast and actual.
The one hour time resolution proposed is at odds with the actual five-minute reconciliation in the NEM.
Alignment between the two should be considered a foundational basis of the framework.
The Importance of valuing time-shifting
Storage is mentioned as being “allowed” to participate rather than confirming that it will be a crucial part of a renewable energy grid. “The Department proposes to allow storage facilities to create REGOs…” It's actually critical to have storage facilities in the electricity network — without storage facilities 100% carbon free energy simply cannot be reached without an enormous overbuild and resultant curtailment.
Storage is important for at least two critical reasons:
• It can offer a load during times of abundant renewable energy;
• It can time shift this energy to times of scarcity.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
In both of these roles, time is of the essence. That is, the time of delivery of electricity is critical. It is necessary that the time stamping of the certificates reflect this need and the granularity of the time periods should match the needs of the market.
The cost to the community when market signals misalign with physics
There are examples where market design has brought unintended consequences which are detrimental when a market design does not align with the physical realities of power engineering. Sometimes this is related to the needs of the era and what may have been good policy, may now be sending perverse signals to the market. We would like to give two examples.
• The so called “generator dead band issue”.
• The distorting influence of energy based certificates. a. Example of Generator dead band issue
The generator dead band issue is an example of where market design has badly influenced a physical characteristic of the grid, namely primary frequency response and allowed a gradual deterioration of frequency control in the NEM over the period from its implementation until Nov 2020 when it was corrected by a new rule change which had the effect of returning back to the way it was.
The following graph from the AEMO implementation report shows the improvement in frequency distribution after implementation of the new rule. This restored the frequency distribution to what it was back in 2001.
The point of this comparison is to underline the importance of having a policy and regulatory position that aligns with the physical objectives and attributes of a reliable and efficient grid.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Graph from AMEO PFR Implementation Report 14 June 2022 b. Example of market distorting effect of energy only certification
The RET scheme has served us well and the LGC’s have helped underwrite the introduction of new renewable energy generators into the market. This scheme has encouraged mostly wind and solar generators to be built by creating a value for renewable energy, no matter where or when it is generated in the Australian grid.
Today there is a great deal of attention being given to finding ways to encourage dispatchable renewable energy generators into the market so that energy can be delivered when there is a shortfall.
An example of this is the NSW LTESA scheme which is designed to encourage long duration storage and firming. Currently the Federal Government is considering adopting similar measures for the same purpose.
This is necessary because the only commercial signal for time shifting of RE, or other dispatchable RE generation is the higher spot prices in the energy market when energy is scarce. This merchant exposure is a risky proposition for capital deployment. Hence the development of LTESA mechanism to attempt to underwrite the market for time shifting.
As a practical solution and way of reducing the cost of the renewable energy in the early days it made a lot of sense, and has served us well. Now that our purpose is to get to 100% renewable energy we must find a way of rewarding renewable energy that can be dispatched when needed. Having a guarantee of
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
origin certificate that enables recognition of source and time of generation is critical to properly valuing dispatchable renewable energy.
Introduction to Sunshine Hydro Technology
Sunshine Hydro is a technology and renewable energy project development company. Sunshine Hydro is currently developing and modelling Superhybrid renewable energy power stations in Qld, NSW and Vic and proposes to present, as an example of a typical project arrangement, the Djandori Project located near Gladstone. As we intend to use this project to illustrate various points we wish to make, it is worth describing, briefly, the technology, operating model, and commercial aspects of the project.
A Superhybrid is a combination of Wind, Solar, Pumped Hydro, Electrolysis and Hydrogen carrier production. The Project is modelled to produce time matched Carbon Free Energy on a continuous basis and as part of differentiating this output from fossil fuel baseload power stations it will require a
Guarantee of Origin mechanism for the electrical energy produced.
An outline of the project as currently modelled is shown in the diagram below.
This is snapshot of a live model of this project, as though it is operating in the NEM today. This live model can be accessed here. Please click on this link to see the current live model. (If the time stamp is not the current time and date, refresh the image to catch up to the current interval).
The live model operates on the 5 minute interval of the National Electricity Market and creates a synthetic bid stack every interval to simulate how this power station would operate under real conditions.
For the current interval each of these sources and sinks of energy needs to be tracked by a robust system of guarantee. This is where the REGO’s and GOs will come into play.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Sunshine Hydro has partnered with Enosi to support our validation needs, and in doing so we have made assumptions in our modelling that a trusted Guarantee of Origin mechanism will be in place. We have collaborated with Enosi in the preparation of this document.
The interplay between REGOs and GOs is demonstrated by this broader ecosystem diagram.
Possibility to use GO certificates to simplify definition of RE Generators
Within the policy proposals there are two which we think could be simplified by careful use of GOs. Policy
Position 3, Definition of RE sources, and the question of secondary energy sources and Policy Position 4, describing eligible Storage facilities both attempt to describe eligible facilities. We suggest this can be done using the product GOs to define eligibility of both categories of renewable energy generator, by certifying the key characteristics of source and time of generation.
We suggest that the essence of the product in both cases is stored energy. The provenance of this product can be validated by the surrender of REGO’s as the “product” is created. In the case of a pumped hydro station the “product” is water stored in an upper reservoir. This product can be later converted into a certain amount of renewable electricity and this generation can be attached to time and source stamped
REGOs.
A similar path occurs with batteries. Electricity is used to cause a chemical transformation and the
“product” is a change in the arrangement of electrons in the battery. The provenance of this product can be validated by the surrender of REGO’s as the “product” is created. This product can later be converted
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
into a certain amount of renewable electricity and this generation can be attached to time and source stamped REGOs.
A similar path occurs with methanol production. For illustration of the paths assume water is desalinated from sea water, carbon dioxide extracted from the air, and hydrogen produced by electrolysis. Electricity is used to create water, hydrogen and carbon dioxide and the hydrogen and carbon dioxide are combined to produce methanol. The provenance of the methanol can be validated by the surrender of REGO’s as the product is created.
In each case the product, stored water, state of charge, or methanol, can be converted into a certain amount of electricity. There are also other products or devices which can store energy, such as hydrogen, ethanol, ammonia, DME, methane, compressed air, raised weights, flywheels and so on. All of these storage mechanisms can be used to create electrical energy, and if they have already had their provenance validated by surrender of REGO’s, and by attachment of a suitable GO, then surely they should be entitled to create REGOs during this generation. Rather than have to devise a list of generation sources which can be considered renewable energy, the product GO process can be used to validate this. Future technologies or new uses of existing technologies would automatically be eligible, the only criterion being the validation of provenance using GOs.
Some of these products, for example methanol and ammonia are currently primarily created using carbon intensive processes. These products can also be created by renewable energy. The product GO’s attached
(or lack of) would prove their carbon intensity. Buyers can then choose the product, other things being equal, based on the carbon intensity and pay a premium for a product of lower carbon intensity.
There could be a role for the CER to specify the carbon intensity threshold.
Response to Questions
Design
Policy position proposal 1
The Department proposes to develop and implement an enduring tradeable renewable electricity certificate mechanism administered by the Clean Energy Regulator.
Response
We are supportive of the Australian Government leading the trusted services for certification, building upon their existing capabilities. It is important to note, however, in the interests of good governance that there should be a clear separation between the operator of the certification and trading services, and the regulatory body that oversees it.
As such, we do not see the Clean Energy Regulator (CER) as an appropriate administrator of the certification and trading capability for the Australian Government, but instead would propose a separate entity be responsible with the CER continuing in its role as a regulator.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Policy position proposal 2
The Department proposes to allow renewable electricity generation to create REGOs where that generation has not already created LGCs, STCs (unless the certificate creation period has passed) or other certificates.
Response
We disagree with the Department’s policy position proposal 2. We will discuss this with respect to the two key programs the REGO seeks to replace at their completion of operation – the Large-scale Renewable
Energy Target (LRET) Large-scale Generation Certificate (LGC) and the Small-scale Renewable Energy
Scheme (SRES) Small-scale Technology Certificate (STC).
The LRET, LGCs and REGOs
We believe the “mutual exclusivity” outlined in policy position proposal 2 is unnecessary, and creates significant issues during the interim period where LGCs and REGOs are proposed to co-exist. It has been proven viable to uniquely assign timestamped “granular certificates” (GC) uniquely to RECs in a number of demonstrations of the EnergyTag standard, including one being conducted under the RACE for 2030
CRC – TRUZERO project in Australia. Users of these GCs are required to jointly surrender both the appropriate GCs and the equivalent RECs when making a time-matched renewable energy claim. This strategy of joint surrender for LGC linked REGOs delivers the prevention of double counting at the heart of policy position proposal 2.
Issues created by the proposed exclusive approach stem from the inaccessibility of REGO characteristics for consumers who procure LGCs. Suitably designed REGOs provide a superior certification by including time and location (same grid) matching, that may well be required by international bodies.
We applaud the intent to make all renewable generation eligible, but the opportunity here is more than just bringing “below baseline” generation into the system. It is a once in a generation opportunity to reform renewable electricity certification from a scheme designed entirely around the idea of incentive for new renewable generation sources, to one focused on accurate measurement of actual renewable generation in order to drive decarbonisation efforts.
The SRES STCs and REGOs
We note that all STCs basically expire on or before 2030. REGOs are positioned as the logical replacement for measurement of small scale renewable generation in addition to LGCs. Section 4.1 states “…systems that have created STCs under the (L)RET(sic) would only be eligible to create REGOs once the maximum deeming period for which certificates were created…”. Therefore the REGO scheme needs to cater for renewable certification right down to household rooftop PV level. As such the 1MWh / 1h REGO size is clearly inappropriate. It would take a 5kW household system months to meet the proposed conditions to create a certificate. Further, given the use of “carry-over” to create the REGO, the timestamp would be invalid from a system perspective as it would be time-shifted to months later than the actual generation.
In resolving this, and in keeping with world best-practice, we would recommend adopting a variable volume/fixed time period REGO structure. We explore these more in our response to policy position proposal 12.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Policy position proposal 3
The Department proposes to allow eligible renewable energy sources as defined under the Renewable
Energy (Electricity) Act 2000 to create REGOs.
Response
We agree in part with the Department’s policy position proposal 3. We would like to note that this should not be the exhaustive set of sources that may be used for the creation of REGOs. Policy position proposal
4 and 5 should thus be considered as additional requirements.
However, we believe that the ability to create REGOs should not exclude secondary energy sources.
Hydrogen, for example, is a key option for storage of renewable electricity for use at other times.
Assuming that REGOs are surrendered, as proposed in policy position proposal 4, they should not be prevented from creating REGOs when electrification occurs using that energy source.
The design of electricity provenance traceability into, and out of, energy storage is well advanced and applicable in this case. The paper recommends the correct approach to storage under proposal 4 below.
Clearly this should also apply to ‘secondary renewable sources’. That is, certificates are surrendered as energy is stored or as hydrogen is created, and new certificates are created when the storage is discharged or hydrogen used for generation. Timestamping applies to both transactions to ensure the value of the renewable characteristic can be monetised in the REGO market and renewable resources are incentivised to “fill the gaps” in intermittent renewable electricity production.
As a further example of the role of secondary energy sources derived from renewable energy, hydrogen can be used to create Methanol. Methanol production requires hydrogen and carbon dioxide as primary inputs. The carbon dioxide can be produced by direct air capture and this is an energy intensive process and this can be supplied from renewable energy sources validated by surrender of REGOs. Methanol can be easily stored without the difficulty associated with hydrogen storage, and can potentially be a useful method of storing energy, which can later be used to generate electricity. The GO certificates attached to the Methanol can be surrendered at the time of generation, and new REGOs created by that generation.
It’s important in the design of both GO and REGO certificates that they are flexible enough to allow energy flow described here to be traced to guarantee provenance at each step of the chain.
Policy position proposal 4
The Department proposes to allow storage facilities to create REGOs for electricity dispatched if they demonstrate that the stored energy came from eligible renewable electricity generation by first surrendering an appropriate REGO or LGC.
Response
We agree in part with the Department’s policy position proposal 4. We would believe that there should be a requirement that, for a storage facility to create a REGO, a matched REGO for the energy stored should be required.
For energy storage devices, whether batteries or pumped hydro for example, it's critical that the REGO’s surrendered must be time matched with the pumping or charging loads for the stored energy to be
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
considered renewable. This underlines the importance of having the granularity of the certificates match the granularity of the time intervals used by grid.
The use of fixed time/variable volume certificates, based on a 5 minute time interval would allow validation of a storage facility as a renewable energy facility. The ability to split certificates is critical in the context of a Superhybrid facility. Such a facility will include pumped hydro and electrolysis and each process will need to be able to attach REGOs to a particular time interval. By way of example, the facility may have contracted with a particular wind farm which has generated a volume of energy during an interval, and part of this energy is used for pumping and part is used for electrolysis. The wind farm would create a certificate for that interval with a volume of energy. That one certificate would be split and surrendered partly by the pumped hydro and partly by the hydrogen electrolysis.
There may be an opportunity to use a GO certificate to enable the provenance of a storage facility, rather than create a special category called storage. This may simplify and generalise the notion of storage. The product of the storage facility is stored energy, and its provenance as renewable energy is validated by the surrender of REGO’s during its creation.
The process of surrender and creation a product GO can follow the same path whether the storage facility is a battery, a pumped hydro station, or a methanol plant.
Policy position proposal 5
The Department proposes that electricity generated by offshore renewable energy power stations and storage facilities located within coastal waters of states and territories, the territorial sea of Australia, and
Australia’s Exclusive Economic Zone, and electricity that is exported internationally, be eligible to create
REGOs.
Response
We agree with the Department’s policy position proposal 5.
Policy position proposal 6
The Department proposes to allow all renewable electricity generation to create REGOs regardless of power station age.
Response
We strongly agree with the Department’s policy position proposal 6. The move from an “additionality” scheme, which was then co-opted for renewable energy certification, to one that rewards all renewable electricity generation, is critical to meeting the goals of decarbonisation of the Australian electricity grid.
We need an accurate measurement system for renewable generation, and matched consumption, that is not distorted by specific incentive policies.
The misalignment between the LRET policies, and the marketing of schemes regarding “green” energy, is best seen in the case of Tasmania. Tasmania remains the state with the lowest emissions intensity, with large volumes of renewable hydro generation, yet have been inhibited from correctly identifying it as
“green” or “renewable”. On the other hand, a state such as the ACT with little generation actually located
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
within its borders, and which on a day to day basis relies of coal fired and gas fired power from NSW generators, was able to build wind and solar facilities in other regions of the NEM, such as South Australia, and be in a position to claim being 100% renewable.
Differentiation in the certificate market can create natural incentives for the kind of renewable generation assets that the country needs to meet its overarching goals – renewable sources that “fill the gaps” in intermittent supply. Timestamping of REGOs is critical to this as certificates for green firming assets would attract a premium where REGOs are timestamped, thereby delivering the market price signals needed to help balance the grid with carbon-free energy source 24/7.
Policy position proposal 7
The Department proposes to allow all renewable electricity generation to create REGOs regardless of power station or storage facility capacity.
Response
We agree strongly with the Department’s policy position proposal 7. The design choice to allow any size generation is critical to the viability of REGOs. However this is incompatible with the choice of 1MWh fixed certificate size and hourly timestamp as we outline in our response to policy position proposal 12 below.
We would like to highlight the need for the REGO to cater for small scale generation technology, with the
SRES also finishing in 2030.
Policy position proposal 8
The Department proposes to require REGOs include all the information currently displayed on LGCs, and that this information be publicly visible.
Response
We agree in part with the Department’s policy position proposal 8. The required metadata for LGCs should be considered a subset of that required for a REGO, however the REGO has also been positioned as a replacement for the STC. Given the inclusion of STCs in the discussion, it should be noted that the requirements for a REGO from a smaller generator (for example, residential solar) may necessarily be different from the approach adopted for LGCs, and data privacy requirements may also need to be applied.
Policy position proposal 9
The Department proposes to allow RET participants to choose to include on LGCs some or all of the additional information required on REGOs.
Response
We agree in part with the Department’s policy position proposal 9. We note that, if LGCs are augmented with both location and timestamp information, then the problems highlighted in our response regarding
REGOs sizing would also apply to such timestamped LGCs.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Policy position proposal 10
The Department proposes to require REGOs include the commissioning date of the power station or storage facility creating the certificates.
Response
We agree in part with the Department’s policy position proposal 10. This is an appropriate approach for participants seeking to drive additionality while preserving the REGO scheme as an accurate fully inclusive renewable electricity measurement system.
We would also like to note that renewable energy generators, unlike many of the conventional fossil fuel generators, are more modular in build, deployment and operation. As such there is likely a need to handle the case of expansion, or of gradual commissioning, of individual renewable energy generators behind a single aggregated connection point (such as a wind farm, or solar farm).
Policy position proposal 11
The Department proposes to require REGOs to include the grid location of the power station or storage facility creating the certificates.
Response
We agree with the Department’s policy position proposal 11. The design decision to capture the location, both geographical and topological (“grid location”) in which the electricity was generated, rather than a lower level grid location is a pragmatic approach balancing the needs of auditability of certificates against the complexity of the topological arrangement of the grid.
It is important that energy be generated on the same grid to maintain the credibility of renewable provenance claims. But there are significant implementation challenges to any stricter level such as taking into account grid interconnector congestion. While there have been extended periods when the Basslink
Interconnector across Bass Strait was out of service, we note that special consideration for any one interconnection would raise further complications.
Policy position proposal 12
The Department proposes that REGOs created by power stations and storage facilities over 1 MW in capacity be required to include a timestamp reflecting the hour in which the electricity was dispatched by the power station or storage facility.
Response
We agree only in-part with the Department’s policy position proposal 12.
While we generally agree with proposal 12 that time stamping be mandatory at least for larger facilities, this detail of this section raises several design issues.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
We recommend that the approach adopted to include time-of-generation in the new REGO scheme should be a fundamentally different way to that proposed. With support from Energy Tag, and building on the practical experience of time-matching certification undertaken worldwide to date, a variable volume certificate representing the energy produced by each facility in the nominated time interval is the best practice approach to facilitate timestamping of energy attribute certificates. This is the approach adopted by all Energy Tag demonstration projects undertaken to date in Europe, Australia, and the USA.
The only alternative seriously considered was to size the certificate at one watt-hour (1Wh) to ensure there would never be material “unders” or “overs” to account for.
We agree with the need to include timestamping of REGOs, to ensure that value is placed not only on the provenance as renewable electricity, but also the point in time, and location, of that renewable electricity.
We recommend aligning the REGO with the AEMO’s settlement period of five minutes, instead of the 60 minutes proposed. While we accept that timestamping at 60 minute would align with many of the international 24/7 carbon-free energy efforts being undertaken, the alignment with the existing market settlement periods would reduce the availability of “time-shifting” between dispatch/settlement periods within the electricity markets, and those of the REGO matched markets. If required (for example, for export purposes or to align with other reporting requirements) the five minute interval based REGOs could be readily aggregated into 1 hour units. Further to this, the adoption of five minute interval over 60 minute interval for the REGO ensures that the non-hour based time zones (for example, Australian Central
Standard Time) aren’t placed in an odd position when it comes to the REGO creation/surrender (30 minute offset on the 60 minute interval) or have to adopt a different time zone (non-hour based).
We believe the statement regarding “…interest in … granular time matching… ” misrepresents the strength of the 24/7 carbon-free energy movement and related certification initiatives on a global basis.
There are currently over 100 signatories to the United Nations 24/7 Carbon-free Energy Compact including two national governments and with the cities of London, Paris and Copenhagen. 400 organisations are participating in the Energy Tag granular Certificate standard development. The European Union’s
Renewable Energy Directive (REDIII) has recommended time and location matching renewable energy claims in future guarantee of origin schemes “…a framework for electrification needs to enable robust and efficient coordination and expand market mechanisms to match both supply and demand in space and time…”. In the United Kingdom, the Department for Business, Energy and Industrial Strategy’s Green
Hydrogen standard requires time-matching of energy used by electrolyser from renewable electricity inputs. Meanwhile on an international stage, the World Resources Institute is currently considering listing time and location matching as a recommended higher level standard for Scope 2 emissions accounting in the next release of the Greenhouse Gas Protocol.
We disagree with the assertion that the provision of high resolution data would be challenging. Almost every small generator in Australia has a Financially Responsible Market Participant (FRMP) in the NEM or
WEM and a Meter Data Provider (MDP) assigned to measure and report their grid exports based on smart metering data collected daily. This data is available to AEMO, the distribution network operator, the customer’s Retailer, and of course under consumer data rights, to the small generator. Retailers, aggregators and other service providers can readily establish such granular data services. Moreover any post-2030 REGO scheme should be designed with current and emerging measurement and data technology in mind.
We agree that “power stations and storage facilities” over 1 MW in capacity should be required to timestamp their certificates, and we wish to ensure that in implementing this policy position proposal that facilities less than or equal to 1 MW in capacity are not inhibited from timestamping their certificates.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Such an approach is unnecessary and may limit the value available to smaller generators by forcing them into aggregation schemes. The world of big data processing has progressed significantly in the more than two decades since the introduction of the LRET. Further, services already exist that provide for the provenance of individual small generation sources to be assigned, certified and matched to consumption across the grid.
We strongly disagree that a “carry-over” approach is either required or desirable. The introduction of any
“carry-over” action violates the very principle of timestamping. Further, as “power stations and storage facilities” energy output reduces each certificate then becomes increasingly time-shifted. This unnecessarily discriminates against small generation providers and small consumers wishing to procure renewable energy. Due to the output of generators, the carry-over would need to be applied to every generator every hour, increasing scheme complexity rather than reducing it, and distorting further the actual operation of the electrical system.
We wish to highlight that many renewable power stations, and storage facilities, are highly variable in output, and even large ones are to be found generating at small percentages of their capacity below 1
MW continuously for the hour. This carry-over inaccuracy to be exacerbated and extended across many intervals. Consider that for 100kW PV generators (currently eligible for LGCs) it will take ~2 days to produce a 1 MWh certificate even in sunny conditions. So every day it is probable that hundreds of kilowatt hours will need to roll into the following day, and if it's cloudy it may be shifted even further from the originating point in time.
We recommend the approach of supporting variable-volume and “splittable”’ REGOs. We point to the capabilities of existing systems already in commercial usage such as Enosi’s Powertracer, and registries already trialling EnergyTag certificates such as MRETs and I-REC.
Such fixed rules are reflective of designs appropriate to the late 90's but not today, and certainly not post
2030. These interconnected issues (generation size eligibility, hourly time stamping, and certificate size) are solved by adopting the variable volume/settlement-interval timestamp approach favoured by the
EnergyTag standard and already proven in multiple trials. Units of volume should be more granular than
MWh, and while kwh would be suitable for a large facility such as we have in mind, we expect that a finer granularity may be desriable to properly include small distributed generators such as rooftop solar.
Policy position proposal 13
The Department proposes to require REGOs to include information indicating whether the certificate was created for generation exported overseas, or for electricity dispatched from a storage facility.
Response
We disagree with the Department’s policy position proposal 13. We believe that the rationale is unclear.
The point of generation may not indicate whether or not the renewable electricity generation was indeed earmarked prior as “for export”. Except in isolated systems (none of which yet exist) where the only possible use is overseas, the point at which a REGO can be marked as “for export” would be at the point of matching the generation with consumption.
This issue does raise a requirement for physical matching that exported energy from renewable electricity sources may need. It may be simpler to consider than once international interconnectors are built, then
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
the location stamp of the generation will be amended to provide that context. This once again highlights the need for a flexible metadata system to be adopted as part of the framework to support possible future adaptations of the REGO framework.
This requirement appears to have been included with the Suncable project in mind. That project proposes solar generation in central Australia which is transmitted to Darwin and then at that point some of the energy will be used locally and some will be delivered to the DC cable to Singapore. It would seem simple enough that the Cable operator be considered an agent who would surrender the certificates, thus demonstrating the renewable nature of the energy, and then that entity would export the energy. This would ensure consistency with the product GO model where the nature of the product determines whether it can be exported, for example hydrogen for export. In this case the hydrogen could be seen as an energy carrier, just as the DC cable to Singapore is an energy carrier. The original generator of the
REGO does not need to be concerned whether the user of the electricity will export it. That is the role of the user to declare its use as covered under proposal 17 purpose of surrender.
Policy position proposal 14
The Department proposes that anyone may surrender a REGO at any time, including for the purpose of creating a product Guarantee of Origin certificate.
Response
We broadly agree with the Department’s policy position proposal 14. The approach that anyone may surrender a REGO at any time creates flexibility for innovation in services and use of REGOs by consumers seeking proof of provenance for renewable electricity. We note this indicates accredited third parties will provide time and location matching services, not the agency responsible for the operation of the framework.
Policy position proposal 15
The Department proposes that the Clean Energy Regulator develop systems and processes to facilitate the voluntary matching of certificates based on time or other energy attributes.
Response
We disagree with the Department’s policy position proposal 15, however, agree with the use of an agency separate from the regulatory function to act as the administrator of the framework.
The agency responsible for the administration of the framework should certainly be tasked with the development and operation of systems and processes to facilitate matching of certificates based on time or other energy attributes. However, we argue that third party organisations should be accredited to deliver the matching services themselves on behalf of energy buyers and sellers. These services can be integrated via standardised application programming interfaces (APIs) with systems developed by the framework administrator. In this way the agency responsible need not develop the matching capabilities themselves, but rather rely on accredited third parties to deliver these services.
A suitable approach for the agency would be to operate the registry, while accredited third party organisations deliver matching services for energy buyers seeking to acquire and surrender timestamped
REGOs and LGCs that match their actual consumption profile.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
Policy position proposal 16
The Department proposes to require REGOs to include the name of the person or organisation on whose behalf the REGO is being surrendered, where applicable, and if the surrender is being made on behalf of many organisations.
Response
We broadly agree with the Department’s policy position proposal 16. We would extend this, however, in order to better support matching services. As such, we recommend the registry should include identification of the consumption point NMI against which the REGO has been matched.
We would like to note that electricity retailers could, if suitably equipped, match REGOs on a many to many basis, and provide a service to GreenPower customers that identifies their time and location matched energy. This is a desirable step in the evolution of all voluntary schemes – not just 24/7 corporate
PPAs. Corporate PPA and GreenPower customers alike would then be informed sufficiently to incentivise shifting of demand to hours of renewable production.
The transparency regarding the surrendering entity is a highly desirable outcome. Nevertheless, some data privacy processes will of course be required. This is particularly so with respect to information from which the customer's load profile may be determined. There may be steps put in place to manage this for mass market (that is, residential and small business) customers in particular.
Policy position proposal 17
The Department proposes that additional information capturing the purpose of the REGO surrender be required to be provided when a person or organisation surrenders a REGO, and be publicly visible.
Response
We broadly agree with the Department’s policy position proposal 17. Clarity in the public domain as to the justification for surrender of a REGO should be considered a key deliverable of a framework intended to deliver trust in its operation. This same approach should be considered from an end-to-end perspective
– the independent auditability of participants and the broader public should be considered a key capability the framework delivers. This would ensure that, where participants delegate responsibility for sourcing
REGOs (for example, to their retailer under a GreenPower contract), they have the ability to independently check the delivered products and services.
Implementation
5.1 Legislated frameworks and administration
Registration of Consumers
While registration of registry participants is simple, validating claims of certificate surrender will be significantly more complex when time/location matching of energy consumption is also claimed.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
For this reason it is suggested that accredited 3rd party agents are enabled in the design to perform such services. This would involve access via a suitable APIs to the REGO data, and to AEMO's meter data stream records for consumption data which in turn would be authorized under consumer data access provisions.
5.2 Implications for the RET and other schemes a. Mutual exclusivity between LGCs and REGOs
As discussed elsewhere, the design of time/location based granular certificate schemes in Europe, USA and under the RACE for 2030 TRUZERO project has dealt with this differently.
In all other cases where a new 'granular certificate' GC is proposed to operate in parallel with a legacy REC scheme, the solution has been to uniquely allocate GCs to one or more RECs. To avoid double counting, consumers are required to surrender both the RECs and the matched GCs that apply to their load if they wish to make a time/location matched claim. b. Adding time-stamps to LGCs
While this would solve the problem of mutual exclusivity restricting access to time attributes for LGC users, under the current 1MWh LGC structure, adding a time stamp would attract the same issues described for 1MWh REGOs.
• When generation falls below 1MW output, the timestamp would have to roll-over and become
inaccurate. This would happen almost every day as the sun rises and sets / wind rises and falls.
Sunset in particular would cause roll-overs to the following day.
• Smaller generators <1MW would never get an accurate timestamp (noting there are many LGC
eligible generators between 100kW and 5MW).
Again we suggest a better solution is to allow variable volume, time-stamped REGOs and LGCs to represent the same energy, with REGO's uniquely assigned to LGCs. An attribute of a REGO would be the
LCGs that are surrendered at the same time (if any) - noting below baseline generation REGOs would not have or require a matching LGC.
Sunshine Hydro submission for DEECCW position paper Renewable Energy Certification
