Australia’s Guarantee of Origin Scheme: consultation papers

5 February 2023

Department of Climate Change, Energy, the Environment and Water.
John Gorton Building,
King Edward Terrace,
Parkes ACT 2600

Submitted via: https://consult.dcceew.gov.au/aus-guarantee-of-origin-scheme-consultation

Australia’s Guarantee of Origin Scheme

Alinta Energy appreciates the opportunity to provide feedback on the Guarantee of Origin
Scheme consultation papers.

We strongly support the intent of the scheme to:

• provide a mechanism to track and verify emissions associated with low emissions
commodities produced in Australia; and

• provide an enduring certificate mechanism for renewable electricity.

We also support the proposal to adopt a market-based accounting method in calculating a commodity’s emissions intensity under the GO scheme.

However, we oppose the proposal to allow STCs and below-baseline generation to be eligible for REGOs prior to the RET expiry in 2030. We also caution that appropriate scrutiny over timestamp information will be required to ensure its integrity.

STC and below baseline generation should not be eligible for REGOs prior to the RET expiry

We consider that incorporating STCs and below baseline generation into REGOs prior to 2030 would unnecessarily complicate and stratify the current voluntary market for LGCs by adding a product which could be perceived as equivalent to an LGC, STC or neither.

It would also needlessly risk undermining recent investments in projects generating LGCs.
Creating a certificate that has much broader eligibility criteria than an LGC, yet is ostensibly equivalent, could flood the voluntary market for LGCs with REGOs derived from STCs and below baseline generation, devaluing recent renewable generation projects.

Being a substantial change to the policy settings under which these investments were made, introducing STC and below baseline generation REGOs prior to 2030 could also increase uncertainty and perceptions of sovereign risk in the renewable generation investment environment.

Finally, we do not perceive any benefits to offset these risks in incorporating below baseline generation and STCs in REGOs prior to 2030. For example, doing so would not give customers access products they cannot already purchase, and LGC-producing renewable generators
could opt to produce REGOs for use in product GOs regardless.

We recommend appropriate scrutiny over timestamp information.

The marginal cost of facilities able to produce dispatchable renewable energy is generally much higher than intermittent renewable energy generators, meaning the cost of having certain timestamps would be much higher during certain periods of the day. Noting this cost differential, if a market for time-matched energy becomes more established, adequate controls would be required to avoid timestamp information being misrepresented. Equally, there will need to be appropriate controls to avoid double counting of REGOs produced by storage facilities.

Thank you for your consideration of Alinta Energy’s submission. Should you wish to discuss this further, please contact Oscar Carlberg at Oscar.carlberg@alintaenergy.com.au.

Yours sincerely

Oscar Carlberg
Wholesale Regulation Manager
Alinta Energy