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Submission to
Guarantee of
Origin Scheme
Consultation
Papers
Submitted by GreenPower | February 2023
Overview of this submission
The National GreenPower Accreditation Program (GreenPower) welcomes the consultation by the
Department of Climate Change, Energy, the Environment and Water (DCCEEW) on two policy position papers on the Guarantee of Origin scheme and Renewable Electricity Certification.
GreenPower is generally supportive of the proposed national Guarantee of Origin (GO) schemes for renewable electricity (REGO), hydrogen and other energy carriers and commodities, apart from the proposal to allow below-baseline renewables to receive REGOs which is likely to result in significant risks for voluntary markets. If below-baseline renewables are excluded, the GO schemes will be an important enabler of voluntary markets by providing a trusted and transparent evidence base that supports accelerated action in renewable energy and emissions reduction. The GO schemes will fundamentally change Australian voluntary markets and it is critical that these new schemes don’t undermine achievements to date, such as the Renewable Energy Target and
Australia’s mature market for voluntary renewable energy purchases.
This submission is based on GreenPower’s ongoing work in voluntary renewable energy markets, our current program review and upcoming program changes, and our initiatives to support new voluntary markets for renewable gases. It is informed by consultation with the National GreenPower
Stakeholder Advisory Group and the National GreenPower Steering Group.
About GreenPower
GreenPower enables business and household customers to match their electricity use with accredited renewable energy, which is added to the grid on their behalf. GreenPower is an independent accreditation program managed by the NSW Government on behalf of the National
GreenPower Steering Group, a collaboration of Australian state and territory governments. The positions presented in this submission only represent those of GreenPower.
GreenPower is currently working on changes to its accredited renewable energy products. These will respond to the rapid changes in electricity markets and improve alignment with international renewable energy standards and market-based carbon accounting. We are also currently developing the Renewable Gas Certification Pilot, which we aim to launch in the coming months.
This pilot will initially include biogas, biomethane and hydrogen. The Pilot will complement the proposed GO scheme and provide an interim certification to cover fuels that are not proposed to be covered initially with an aim to transition to the GO scheme when it is ready.
Since its inception, GreenPower has made a significant contribution to the Australian renewable energy industry including:
› around $900 million investment to the renewable energy sector since 2005
› supporting voluntary action to reduce Australia’s grid emissions by at least 16 Mt CO2-e
› providing consumers with a robust, easy to access mechanism for renewable energy
purchasing
More information about GreenPower can be accessed at www.greenpower.gov.au
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Executive summary
A trusted and nationally consistent data framework is essential for voluntary markets to operate successfully. The consultation papers and engagement by the Department and CER to date show that the Australian Government is serious about setting up a best practice framework that delivers broad functionality
GreenPower supports the approach of establishing GO schemes for electricity and products to better inform consumer choice and enable green product supply chains.
The REGO scheme will likely be the mechanism chosen by GreenPower for our renewable electricity products as we approach the end of the RET scheme, and its design will materially impact GreenPower and other voluntary purchases, and thereby consumer access to renewables.
The REGO scheme must not undermine Australia’s well-functioning market for voluntary renewable energy. Voluntary purchases have increased strongly in recent years and absorbed much of the renewable energy surplus above the RET. The REGO schemes should not include below-baseline generation as that would flood markets with certificates from generators built before 1997.
Including them would have zero environmental benefit today and would draw away incentives from new renewable generators that need them, undermining consumer trust in renewable energy retail products. Below-baseline generators should provide firming and storage services, and we believe market signals are already in place to incentivise this.
Visibility of GreenPower compliance or eligibility on REGOs will reduce the administrative and compliance burden for voluntary market participants. This doesn’t only impact GreenPower customers as some corporates also choose GreenPower-compliant LGCs that they then surrender directly and we expect the same will be the case with REGOs.
Market-based carbon accounting needs to be applied consistently across the GO schemes and other Commonwealth schemes and mechanisms. There are currently concerns among energy stakeholders about the use of selective reporting (market-based or location-based) leading to double counting of renewable energy (dual reporting is needed). The REGO should provide clarity early about how double counting will be avoided. The consultation papers are going in the right direction but more detail is needed. This is especially crucial if small-scale systems are eligible, which we don’t oppose in principle but does carry significant risks.
The proposed framework for Product GOs appears robust and consistent. While further information is needed on the implementation, GreenPower believes that the design parameters are well chosen and appropriate.
The Product GO scheme should recognise GreenPower’s Renewable Gas Certification Pilot and its
Renewable Gas Guarantees of Origin (RGGOs) as evidence of the attributes of the product.
GreenPower’s pilot is designed to transition into the Product GO scheme once it expands to biomethane and biogas and it is therefore important for industry development that the two schemes, as well as other Australian Government initiatives such as the Corporate Emissions
Reduction Transparency (CERT) reports and Climate Active certification, are also aligned as much as possible. Biomethane and biogas should be prioritised for future expansion of the GO schemes as they provide a renewable alternative that is compatible with existing equipment.
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GreenPower is ready to help consumers identify best practice, high environmental value products beyond electricity. GreenPower would like to be able to use the Product GO in much the same way that we are currently using LGCs as our currency for renewable energy products. This could potentially take the form of GreenPower accredited hydrogen GOs, ammonia GOs or steel GOs, noting that these are just examples. To enable this, the Product GO scheme must also include optional identifiers for compliance with voluntary schemes, as well as for state or territory initiatives.
We welcome that this is discussed in the consultation papers and GreenPower will continue to develop what our role is in providing this green product certification.
Engagement on the GO schemes has been exemplary to date, especially by the Clean Energy
Regulator on the hydrogen GO trials, and we look forward to continuing to work closely with the
Department and the CER on facilitating a cohesive and voluntary market-enabling framework for energy carriers and products.
For any questions regarding this submission, please contact James Day at greenpower.admin@planning.nsw.gov.au.
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Response to the REGO consultation questions
Policy position proposal 1:
The Department proposes to develop and implement an enduring tradeable renewable electricity certificate mechanism administered by the Clean Energy Regulator (CER).
› Support
Comments:
GreenPower agrees that having one centralised and nationally (and potentially internationally) consistent framework supports efficient outcomes and trust in renewable energy markets, and that the mechanism is administered by the CER.
GreenPower supports the development of a tradeable renewable electricity certificate mechanism that will endure beyond the RET’s sunsetting in 2030 and that allows certificates to be created from offshore renewable generation connected to an Australian electricity network.
A number of GreenPower’s stakeholders have reported their concerns to us about the proposed
2024 commencement date for the REGO scheme. Careful consideration should be given to the commencement date for the REGO scheme and whether it should operate in parallel to Large-
Scale Generation Certificates (LGCs) or only begin to operate after the RET ends in 2030. If the
REGO scheme starts before the end of the RET, there will be two near-equivalent certificates and this complexity could increase administration and compliance costs for GreenPower and other market participants and lead to market confusion unless there is effective stakeholder engagement by the Department and the CER.
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.
› Strongly support with some additional considerations suggested
Comments:
GreenPower strongly supports the approach to not allow the creation of multiple certificates relating to the same generation volume. This is necessary to avoid double counting of environmental and other attributes of the renewable electricity.
While LGCs are not legislated to contain any environmental attributes, the Australian market consensus is that they represent the ‘renewable’ quality of the electricity. This is less clear for STCs where solar system owners generally claim that they use renewable electricity despite having on- sold their STCs. A consistent approach is needed for REGOs. GreenPower supports an approach that is robust and accurate in terms of carbon accounting and reduces double-counting.
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It may be preferable for only one registry to operate for both REGOs and LGCs. This would make it easier for GreenPower to transition to the REGOs and reduce consumer and market confusion.
Please also refer to further comments on the eligibility of small-scale renewables in Proposal 7 and on Residual Mix Factors in Proposal 22 of the Product GO section.
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.
› Alternative policy position proposed: All eligible renewable energy sources as defined
under the Renewable Energy (Electricity) Act 2000 should be able to create REGOs.
Secondary energy sources derived from 100% accredited renewable energy, such as
renewable hydrogen used as a fuel to generate electricity, should be treated as products
under the Product GO. The Product GO could then provide evidence that the fuels used in
the generator are renewable and enable the generator to create REGOs (e.g., if it burns
renewable hydrogen with hydrogen Product GOs that demonstrate emissions below a REGO
eligibility threshold).
Comments:
Most states and territories are supporting the development of green hydrogen from 100% accredited renewable electricity. Other secondary energy sources are also proposed to be developed such as the green hydrogen and green methanol production facility which is proposed to be developed at Bell Bay in Tasmania1 and Port Augusta in South Australia2.
Secondary energy sources are likely to become important energy carriers for storing renewable electricity over the next 5-10 years. While many if not most of these secondary energy sources may not be economically viable currently, some renewable energy sources such as tidal or wave energy are also not currently economically viable. Further research and development and technological deployment in Australia and overseas is expected to reduce the cost of many renewable and secondary energy sources over the next decade. For example, the NSW Hydrogen
Strategy aims to reduce the cost of green hydrogen by $5.80 per kg in the next decade. The US
Department of Energy’s Hydrogen Shot is also seeking to reduce the cost of clean hydrogen by 80% to USD$1 per kg in one decade.
Not all REGOs may be associated with near-zero emissions, and a Product GO would provide the information required to determine whether a REGO can be considered ‘zero emissions’ or not.
Thresholds may be needed for eligibility to create REGOs based on emissions intensity.
1 Barnett, G. (2022), ‘Significant green hydrogen and methanol partnership welcomed’, 19 December,
Media Release: Guy Barnett, Tasmanian Minister for Energy and Renewables.
2 Australian Renewable Energy Agency (2022), ‘Recipients announced for Australia-Germany HyGATE
Initiative’, 27 January 2023
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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.
› Support with some additional considerations suggested
Comments:
GreenPower supports this policy proposal. Surrenders of REGOs or LGCs by storage facilities should include Unaccounted for Energy and losses (e.g., from transmission, distribution, energy conversions in storage facilities etc.). Product GOs for secondary fuels should also be considered.
In the case of below-baseline generators, eligibility to create ‘storage REGOs’ should be limited to storage of above-baseline renewable generation. Below-baseline generators should not be eligible for REGOs for their direct generation, which is discussed further under proposal 6.
The Department should also consider whether additional requirements should apply to storage
REGOs to ensure they provide real ‘storage’ benefits to the energy system, for example a test whether the storage was generating electricity during times of peak demand or of low renewable generation.
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.
› Partly support with some additional considerations suggested
Comments:
GreenPower agrees with offshore renewable energy power stations and storage facilities connected to an Australian electricity network being eligible to create REGOs. Offshore wind in particular is expected to be deployed at scale over the coming decades. It will be important for this offshore generation to be recognized as renewable energy under the same framework as onshore generation.
GreenPower agrees that REGOs should be able to be created by renewable power stations and storage facilities that produce electricity for both domestic and overseas consumption. However, we note that any exported electricity will need to be coupled with REGOs if the overseas end-user claims the electricity as ‘renewable’.
Unaccounted for Energy (UFE) and losses (transmissions, distribution, energy conversions in storage facilities etc.) from electricity that is exported internationally should be accounted for carefully so that Australian energy consumers are not indirectly subsidising the electricity exported internationally.
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Policy position proposal 6
The Department proposes to allow all renewable electricity generation to create REGOs regardless of power station age.
› Do not support - this proposal is likely to: be counterproductive to the energy policies of the
Commonwealth, state and territory governments in Australia, result in significant risks for
voluntary markets, result in a loss of consumer trust in renewable energy products and
undermine confidence in the otherwise commendable REGO and GO schemes proposal
Comments:
As taxpayers and energy consumers have already paid for the construction of most large below- baseline renewables such as the Snowy-Hydro scheme and the hydroelectric dams in Tasmania through taxes and energy charges, GreenPower believes that the environmental attributes of these generators should be allocated to all electricity consumers. Below-baseline generators should either be ineligible to create REGOs or be required to immediately surrender all created certificates on behalf of all Australian energy consumers in order to reduce the emissions intensity of the grid.
Below-baseline renewables are not eligible for inclusion in the RET and the consultation papers don’t demonstrate a need to include them in the REGO scheme.
Permitting below-baseline renewables to create REGOs is likely to lead to significant risks for voluntary markets as below baseline renewables have such significant generation capacity. They generate around 14 TWh of electricity per year, which is almost 74% of the aggregate demand from voluntary renewable energy (RE) commitments.3 The inclusion of below-baseline renewables would divert income from voluntary RE commitments to old, largely government-owned assets, and away from post-1997 renewable energy generators, including GreenPower accredited generators.
This diversion of income away from newer generators is already beginning as I-REC has begun to accredit below-baseline generators in Australia and some former GreenPower customers are buying them. Further incentives for below-baseline generators do not appear to be required and would be counterproductive to the energy policies of all governments in Australia as this could delay the construction of new renewable energy projects, leading to a delay in the energy transition and higher carbon emissions.
GreenPower has received strong feedback from a wide range of stakeholders that indicates that allowing below-baseline renewables to create REGOs is likely to result in a loss of consumer trust in renewable energy products and real impacts on voluntary action. This could significantly set back voluntary markets and public support for renewable energy. The proposal to include below- baseline renewables therefore has the potential to undermine confidence in the otherwise commendable REGO scheme and in voluntary renewable energy procurement more broadly.
Large potential customers of below-baseline REGOs, such as hydrogen and e-fuels producers, have an interest in below-baseline generation not being eligible for REGOs. Public support and the social licence to operate for large, export-focused green fuel projects would likely suffer if these projects directly caused higher electricity emissions for other consumers. These large customers should
3 Green Energy Markets (2023) Submission on Guarantee of Origin – Renewable Electricity Certification
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purchase renewable energy from new renewable electricity generators (REGOs can provide the evidence base) and only rely on below-baseline generators for storage, if required.
It is currently unclear whether any cost of REGOs from below-baseline generation being passed on to consumers would be considered appropriate. REGOs from these generators would not lead to any additional environmental benefit, and the Australian Competition & Consumer Commission may investigate whether such products would mislead consumers into buying a product thinking it is a “greener” option than it really is.4 This would be a further risk to the integrity of the REGO scheme if it includes below-baseline generation.
To help limit warming below 1.5 degrees, GreenPower believes that it is important to accelerate the addition of new renewables into the grid. This approach is in line with international renewable energy and climate change frameworks such as RE100 and the Science Based Targets Initiative, which other certifications such as BCorp are now also proposing to align with. To maintain alignment with these international standards and frameworks, GreenPower is itself considering introducing a 15 year age limit for renewable generators from 1 January 2024. This is on top of the existing, RET-aligned exclusion of below-baseline generation. If this proposal is adopted, a newly built generator would be eligible to use its LGCs (and any future REGOs) for GreenPower sales for 15 years, with some exemptions for: existing PPAs and long-term contracts entered into before 1
January 2024, and the ‘repowering’ of older generators where efficiency improvements or additional generation capacity are substantial.
GreenPower encourages the Department and the CER to also consider introducing a 15 year age limit for renewable generators in the REGO scheme to help accelerate the addition of new renewable capacity into the grid.
It is also important to recognise that some large below-baseline hydro schemes are being reconfigured to provide firming for renewables, e.g., the Snowy 2.0 scheme. Suitable below- baseline renewables should be used to firm intermittent renewables such as wind and solar. This important firming role should be incentivised, if it is necessary to provide further incentives, through short-duration and long-duration storage incentive schemes, not through a renewable energy certification scheme such as REGO.
4 ACCC (2016), Media release, Momentum Energy pays penalties of $54,000 in relation to renewable energy advertising, www.accc.gov.au/media-release/momentum-energy-pays-penalties-of-54000-in- relation-to-renewable-energy-advertising
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Policy position proposal 7
The Department proposes to allow all renewable electricity generation to create REGOs regardless of power station or storage facility capacity.
› This proposal could lead to significant risks for voluntary markets and more detail is
required to determine whether it is supported.
Comments:
Careful consideration needs to be given to whether all small-scale renewables should be able to create REGOs and how the REGO mechanism will interact with the feed-in-tariff schemes and other state and territory solar incentives in operation around Australia.
The Clean Energy Regulator reported in 2022 that the payback period for a rooftop solar system was 4 years and could reduce to 3 years if retail energy prices increase this year. 5 Rooftop solar already makes economic sense for the vast majority of owner-occupiers of detached dwellings but renters still face significant barriers in accessing rooftop solar due to the “split incentives” issue where the economic benefit of solar panels goes to the renter, but the cost falls on the landlord.6
EnergyLab estimated in 2018 that owner-occupiers are seven times more likely to have solar on their roof than renters.7 Apartment dwellers also face significant barriers in accessing rooftop solar due to the limited roofspace available on apartment blocks, especially multi-storey blocks.
There are also significant risks of double counting, especially if small-scale generation is eligible to create REGOs. This would need to be carefully managed. If they create and sell REGOs, owners of rooftop solar would no longer be able to claim they are using ‘renewable electricity’ despite the electrons from their solar panels being mostly used behind the meter. Based on frequent submissions to GreenPower about attribution of distributed renewables, this is a highly contentious and complex issue.
Consideration should be given to perhaps only allowing small-scale renewables to create REGOs if they are additional and would not have occurred in the absence of the REGO mechanism, such as rooftop solar and solar bank/garden projects for renters and apartment dwellers. This would allow
REGOs to be better directed where they are truly needed to enable more Australians to benefit from small-scale renewable energy projects. If designed well, this could also avoid double counting of renewable energy benefits. For example, the use of small-scale REGOs could be limited to initiatives that retire the REGOs without renewable energy claims being made by the purchaser of the REGO.
While the aim may be to develop a flexible and user agnostic REGO scheme, these implications for consumers need to be considered carefully upfront.
5 CER (2022), Small-scale technology certificates (STCs), Accessed 23 January 2023.
6 Reddy, S. and Painuly, J.P. (2004), Diffusion of renewable energy technologies—barriers and stakeholders’ perspectives, Renewable energy, 29(9), pp.1431-1447.
7 EnergyLab (2018). The final frontiers of rooftop solar: opportunities for energy entrepreneurs
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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.
› Broadly support - with some additional information fields suggested
Comments:
GreenPower supports this proposal and believes that an additional field should also be included on a REGO to identify REGOs that are ‘GreenPower compliant’:
• GreenPower compliant – will be a field to indicate that a REGO is from a renewable energy
generator accredited by GreenPower and is compliant with all GreenPower requirements.
• This identifier will be of great assistance to GreenPower buyers, providers, generators and
the GreenPower Program Manager and will reduce compliance and administration cost.
Please refer to our response to policy proposal 6 in the Product GO consultation for further information.
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.
› Broadly support - It would be preferred if it is made mandatory to include on LGCs all of the
additional information required on REGOs
Comments:
GreenPower is supportive of making it mandatory to include on LGCs all of the additional information required on REGOs. This would enable consistent information and greater transparency by renewable energy certificate creators to be provided to the market, including GreenPower
Providers and customers. Making this additional information mandatory would also make it easier to utilise a common platform for both REGOs and LGCs, thereby reducing the risk of platform inconsistencies causing accounting or other issues which are likely if separate platforms are used to manage information on REGOs and LGCs.
Policy position proposal 10
The Department proposes to require REGOs include the commissioning date of the power station or storage facility creating the certificates.
› Support
Comments:
The Department will need to consider how later updates to a power station or storage facility are treated. This could be additional capacity being added to the power station, a significant upgrade
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that makes it more efficient, or similar. This information will inform whether GreenPower considers the power station’s original commissioning date or a later ‘repowering’ date when determining whether the power station meets GreenPower’s generator age eligibility criterion.
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.
› Support
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.
› Support with some additional considerations suggested
Comments:
GreenPower is supportive of making it mandatory for power stations and storage facilities over 1
MW in capacity to be required to include such a timestamp. It should be optional but possible for smaller power stations and storage facilities to provide such a timestamp as this timestamp may attract a premium in the future and it may become less challenging over time for smaller generators and aggregators to provide this data as technology improves and reduces in cost.
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.
› Support with some additional considerations suggested
Comments:
GreenPower generally supports this policy proposal but further consideration needs to be given to when, during the lifecycle of a REGO, that this information is included on the certificate. It should also be considered further whether renewable energy projects that directly export electricity to international markets should be able to sell REGOs domestically, or are forced to sell their REGOs along with the electricity (coupled), and what impacts this decision may have on domestic energy and certificate markets.
Unaccounted for Energy and losses (transmissions, distribution, energy conversions in storage facilities etc.) from electricity that is exported internationally should be fully accounted for so that
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Australian energy consumers do not end up indirectly subsidising the production of electricity exported internationally.
GreenPower also supports - with some additional considerations suggested - policy proposals 4 and
5 which are related. Please also refer to our responses to these proposals.
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.
› Support with some additional considerations suggested
Comments:
Unaccounted for Energy and losses (transmissions, distribution, energy conversions in storage facilities etc.) from electricity that is exported internationally should be fully accounted for so that
Australian energy consumers do not end up indirectly subsidising the production of electricity exported internationally. The accounting for storage REGOs should also include Unaccounted for
Energy and losses (e.g., from transmission, distribution, energy conversions in storage facilities etc.).
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.
› Support
Comments:
GreenPower is supportive of this policy proposal and is also keen to work with the CER to develop systems and processes to facilitate this voluntary matching of certificates.
GreenPower Providers will likely wish to offer electricity products that include these new attributes, and the GreenPower Program could provide accreditation services as is currently the case for
GreenPower products.
This proposal may result in significantly higher implementation costs, and the Department should reconsider the proposal once cost impacts are known.
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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.
› Support with some additional considerations suggested
Comments:
GreenPower strongly supports this policy proposal and believes the increased transparency will help maintain confidence in renewable energy and the sustainability claims made by organisations. Due to commercial confidentiality and to increase liquidity in certificate markets this should not be made mandatory as some energy retailers may be unable to provide this granularity of detail, or only at high transaction costs.
GreenPower is keen to work with the Department and the CER on the details of this proposal.
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.
› Support with some additional considerations suggested
Comments:
GreenPower supports this policy proposal, and believes there is strong public benefit in this information being publicly visible. The list of purposes for the REGO surrender should be largely structured and standardised so that those surrendering certificates should choose from a limited selection of purposes when surrenders are made rather than entering information into a freetext field. This will produce structured data which will make it easier for market participants to analyse this data. Some purposes, e.g., NABERS, are also likely to need freetext information to be entered such as the name of the building, but making this whole field freetext should be avoided for the above reasons.
It is also likely to be necessary to allow the selection of more than one purpose in some cases, e.g., an organisation may surrender a REGO as part of a GreenPower purchase for the purposes of
Climate Active certification and their BCorp certification and to have their emissions target or reductions certified by the Science Based Targets initiative.
GreenPower is keen to work with the Department and the CER on the details of this proposal.
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Response to the Product GO consultation questions
Policy position proposal 1
The scheme will be covered under new legislation administered by the CER.
› Support
Policy position proposal 2
The Product GOs will cover the well-to-user system boundary.
› Support
Comments:
GreenPower supports the inclusion of all emissions and other relevant attributes on Product GOs. In our Renewable Gas Certification Pilot, we plan on using well-to-gate as the system boundary, however gas network emissions will also be noted on the certificate making it a simplified well-to- user boundary. This is due to gas network emissions generally being outside the control of consumers that use network-delivered gas.
For behind-the-meter supply of renewable gas, our Pilot will include the emissions of any storage and transport, which results in a well-to-user system boundary.
We would like to understand how the Department plans to implement the proposed boundary approach to network-injected hydrogen and are keen to develop a consistent approach with our certification pilot.
Policy position proposal 3
There will be no minimum emissions intensity requirements for Product GOs and participation will be voluntary for both Product GOs and REGOs.
› Support
Comments:
GreenPower supports broad eligibility for participation in both REGO and Product GO schemes.
As we noted under REGO proposal 3, some secondary renewable energy carriers may have notable emissions and a minimum emissions intensity requirement may be needed for REGOs.
Ideally, the REGO scheme would cover all electricity generation, which could provide complete market information about the emissions intensity of electricity consumption and any energy retailer’s supply mix. Switzerland and Austria mandate certificates for all generation and RECS
International, among other certification stakeholders, recently released discussion papers on the
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topic that recommend full disclosure as the best approach for electricity market transparency8.
RECS International also interpret European Union regulations as recommending that Governments
“should move beyond basic implementation and towards the development of ‘full disclosure’ systems where every megawatt hour of electricity production is certified by a GO.”9
This approach could improve consumer visibility of the source of generation, which is currently hindered by the wholesale market design. Providing a full disclosure market would enable a fully- informed, market-based framework, more informed decision making by consumers and reduce risks of double counting of renewable energy.
Please note that GreenPower does not endorse all positions that are included in the above-linked references by RECS International.
Policy position proposal 4
The GO scheme will be cost recovered in line with Australian Government policy.
› Support
Policy position proposal 5
The scheme will be reviewed in 2025 and every five years thereafter to ensure it is fit for purpose and able to support the industry.
› Support with some additional considerations suggested
Comments:
GreenPower broadly supports this policy proposal. Five yearly reviews would likely to be regular enough to ensure the scheme is fit for purpose and able to support the industry but not so frequent that they may seem to always be occurring to some stakeholders. More frequent reviews may be necessary with the rapid changes in energy markets. An initial review in 2025 seems a little early if the scheme only begins to operate in 2024.
Policy position proposal 6
Product GOs and REGOs will be housed on a publicly visible register with general information and the ability to share specific information with other scheme participants. Feedback is sought on the information that should be publicly visible on REGOs and the information that should be publicly visible on Product GOs.
› Support with some additional considerations suggested
8RECS International (2020), What full disclosure means, and why it is so important
9RECS International (2019), Shaping an effective renewable electricity market – Implementing Article 19,
Recast Renewable Energy Directive
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Comments:
Product GOs, REGOs and LGCs should all be housed and searchable on one platform to improve the accessibility and standardisation of information across all these related schemes.
Information that should be publicly visible on REGOs:
• All of the information that is currently visible on LGCs:
o Certificate serial number
o Fuel source for electricity generation*
o Electricity generation year
o State/territory of electricity generation
o Certificate creation date
o Current owner of certificate
o Current status of certificate
o Creator of the certificate
o Power station accreditation code.
• The following additional information that the Department proposes to include on REGOs
should be mandatory to both include and be publicly visible on REGOs as well as LGCs:
o Renewable energy source or storage technology (*this field partly duplicates the
Fuel source for electricity generation field on an LGC and so these two fields could
potentially be combined)
o Date of generation/production and hour, if applicable
o State/ territory and grid location
o Commissioning date as this will be of assistance to GreenPower if we proceed with
a proposal to introduce a 15 year age limit for renewable energy generators
• The following additional information that the Department proposes to include on REGOs
should be optional to both include and be publicly visible on REGOs as well as LGCs. If they
are included on REGOs they should always be publicly visible to enhance the transparency
of the scheme and build confidence in sustainability claims by companies and
organisations.
o Storage or export status
o On whose behalf certificate was surrendered
o Additional fields not proposed in the consultation paper as discussed below.
• The following fields that the Department proposes to include on a REGO should be modified
slightly:
o Purpose of surrender should allow multiple selections or entries
▪ It is likely to be necessary to allow the selection of more than one purpose in
some cases, e.g., an organisation may surrender a REGO or LGC for multiple
purposes such as Climate Active certification or validation by the Science
Based Targets initiative.
▪ The list of purposes for the REGO surrender should be structured and
standardised so that those surrendering certificates choose from a limited
selection of purposes when surrenders are made rather than entering
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information into a freetext field. This will produce structured data which will
make it easier for market participants to analyse this data.
• The Department may want to also include the facility’s accreditation date on REGOs as
part of the facility information.
• GreenPower believes that these identifiers, tags or similar filtering options should also be
included on REGOs and Product GOs:
o GreenPower compliant – a field to indicate that a REGO or Product GO is from a
renewable energy generator or renewable gas project that is accredited by
GreenPower and is compliant with all GreenPower requirements. The ability to filter
certificates for this field would be of great assistance to GreenPower buyers,
providers, generators and the GreenPower Program Manager and reduce their
compliance and administration costs.
o NSW Renewable Fuel Scheme compliant – as above for GreenPower but with
regard to the NSW hydrogen target.
o Other Australian, state or territory schemes.
• Pending inclusion of small-scale generation, REGOs may need an identifier for whether the
environmental claim related to the renewable energy has already been allocated:
o ‘Rooftop solar claimed’, ‘emissions benefit claimed’, or similar – this indicator would
allow voluntary market participants to exclude REGOs where the environmental
attribute has already been claimed by the system owner.
o REGOs should generally operate on the basis that the environmental claim is
inherent in the REGO until the REGO is retired.
o This proposal may help limit the risks of including small-scale generation in the REGO
scheme but exclusion would be clearer.
Policy position proposal 7
Product GOs will use a provenance approach, while REGOs are able to be traded independently of the electricity they were created alongside.
› Support with some additional considerations suggested
Comments:
GreenPower supports the provenance approach for most products as well as the limited- provenance approach proposed for hydrogen that is injected into a gas network. Our Renewable
Gas Certification Pilot will use a closely aligned approach. The Pilot will require ‘displacement of fossil natural gas’ but will allow certificates from different gas types to be fungible as long as they meet this displacement requirement. Eligible gases will initially be biogas, biomethane and hydrogen.
The proposed decoupled approach for REGOs aligns with the current LGC market. It is worth noting that there are some GreenPower Providers that are considering a provenance approach for their
GreenPower products, meaning they would surrender LGCs from generators in the same jurisdiction as the electricity customer. The proposed REGO scheme appears to enable this.
GreenPower® | Accredited Renewable Energy 18
Policy position proposal 8
An upfront data reporting model will be implemented to provide a practical reporting process.
› No comment
Policy position proposal 9
There will be four scheme participant roles with differing responsibilities and permissions.
› Broadly support with some additional considerations suggested
Comments:
We encourage the Department and the CER to add a fifth role for government schemes such as
GreenPower and the NSW Renewable Fuel Scheme to be able to access the REGO and GO platform. The role should involve supporting data sharing arrangements that enable these government schemes to access data from:
• GO Producers
• GO Intermediaries
• GO Agents
• GO Consumers.
Policy position proposal 10
The creation process will be implemented which combines batch data with the upfront profiles to create certificates. The creation period for GOs can range from a single hour to a year. Feedback is sought on whether the certificate creation period range is suitably practical for businesses.
› Broadly support with some considerations suggested
Comments:
Depending on the renewable energy supply to a Product GO eligible facility, the creation period may not be consistent in its attributes. For example, a facility may have onsite solar to cover all electricity use during the middle of the day and night-time supply is covered with the grid electricity mix. The GO scheme will need to consider how these facilities should be treated, and whether it allows the emissions intensity of the product to vary hourly/daily or mandates the use of annual averages.
Policy position proposal 11
Product GOs are proposed to require creation and transport and storage information to be complete. Product GOs can then be surrendered and report consumption information.
› Support with additional considerations for energy carriers such as hydrogen noted above,
and for recognition of the Renewable Gas Certification Pilot
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Comments:
The GO scheme should accept certificates under GreenPower’s Renewable Gas Certification Pilot as verified information about GO attributes. This Pilot aims to transition to the Product GO scheme once it expands to biomethane and biogas and is well-aligned, making mutual recognition of the validity of certificates and respective attributes possible. This will support renewable gas industry development and avoid process duplication for participants. For example, a hydrogen producer using GreenPower certified biogas. The hydrogen product GO would use emissions information from the biogas certificate created under GreenPower’s certification.
Policy position proposal 12
REGOs are proposed to be available to be traded or surrendered after being validly created.
› Support if validation/verification occurs prior to creation
Comments:
One of the strengths of the LGC market has been that certificates can only be created after the renewable energy has been generated, and validation or verification of the generation is critical to build trust in REGOs.
Policy position proposal 13
The CER will undertake compliance monitoring and will have regulatory powers to address non- compliance.
› Support
Policy position proposal 14
LSTRs will provide third-party assurance of the information reported under the GO scheme. The need for LSTRs will be front-loaded requiring less as time goes on and participants demonstrate compliance with the requirements of the scheme.
› More information is required
Comments:
More information is needed regarding the proposed arrangements for GreenPower to provide a response to this proposal. Our initial comments are:
• Participants should have the option to conduct ARCs more frequently than mandated to
meet the requirements of corporate reporting or voluntary schemes that require annual
auditing.
• Considering the term ‘Annual Reconciliation Check’ and the proposed five yearly
frequency, will the GO Producer self-report ARCs in between independent ARCs?
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• Does the Department suggest the five-yearly ARCs to assess all five years, or only the latest
reporting year?
• Will the Department or the CER publish a list of assessors that can conduct LSTRs and ARCs,
what conditions will there be for assessors to be listed and how will the accreditation
process for assessors be managed, e.g., CPE requirements, processes for handling
complaints and the disciplinary and deregistration procedures for assessors?
Policy position proposal 15
Where Product GOs have incorrect information, they will be updated to reflect the most up to date information. After the ARC process, Product GOs will be finalised and not subject to further amendments.
› Support noting special arrangements may be required for energy carriers such as hydrogen
Policy position proposal 16
Where REGOs have incorrect information, they will not be updated and instead will follow an
‘unders’ and ‘overs’ reconciliation process to minimise impacts on the renewable electricity certificate market.
› Support with minor corrections, with some considerations suggested
Comments:
GreenPower is keen to work with the Department and the CER to ensure the notification protocols for stakeholders impacted by the correction reach all relevant entities so that risks and commercial impacts can be managed appropriately.
Policy position proposal 17
The Department proposes the GO scheme methodologies will align where possible with the NGER and the Safeguard mechanism.
› Support with some considerations suggested
Comments:
GreenPower supports alignment between schemes and frameworks to improve efficiency and clarity, and to reduce red tape. However, it is worth noting that changes to the NGER and
Safeguard mechanism may be required to make them more consistent with global carbon accounting standards, and that market-based carbon accounting approaches should be utilised as much as possible in all of these schemes and mechanisms.
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Policy position proposal 18
The CER will be able to establish formal data sharing arrangements with the administrators of these schemes to streamline the creation process.
› Support with some additional considerations suggested
Comments:
GreenPower welcomes the proposed support for formal data sharing arrangements with
GreenPower’s Renewable Gas Certification Pilot and the NSW Renewable Fuel Scheme. We would also like to formally request that this data sharing arrangement be extended to GreenPower generally, including REGOs and LGCs for the purpose of the GreenPower renewable electricity accreditation program. Please refer to our response to policy proposal 9 for further information about data sharing arrangements.
Policy position proposal 19
Material emissions sources that must be measured for each product and production pathway will be specified in the methodologies. The sources will be selected based on materiality threshold of
2.5% of total emissions per source.
› Support noting the CER should have the ability to add mandatory emissions sources without
requiring changes to the NGER scheme
Policy position proposal 20
ACCUs issued from within the system boundary will need to be surrendered for the emissions reductions to be recognised under the GO scheme. ACCUs or other carbon offsets cannot be used to reduce the emissions intensity of products listed on GO certificates.
› Strongly support with some considerations suggested
Comments:
Many ERF methods include several emissions abatement sources in one project. If a project has to retire ACCUs from only one abatement source, these ACCUs cannot be distinguished from other abatement sources that are part of the same project. The Department will need to consider whether the ACCUs need to be sourced from the related abatement or not.
In our Renewable Gas Certification Pilot, we currently require the ‘in-boundary’-ACCUs to be sourced from the project related to the GO producer and don’t allow the ACCUs to be sourced from elsewhere (e.g., another abatement project of the same technology, or different technologies).
GreenPower also strongly supports the proposal that ACCUs or other carbon offsets cannot be used to reduce the emissions intensity of products. This ensures end consumers have visibility of the emissions related to the product.
GreenPower® | Accredited Renewable Energy 22
Policy position proposal 21
LGCs and REGOs will be used to demonstrate renewable electricity use. Behind the meter or directly supplied renewable electricity will not require certificate surrender if none were created.
› Support
Comments:
GreenPower supports this policy proposal and also welcomes the Department’s recognition of the important role that GreenPower does and can continue to play in demonstrating renewable electricity use. GreenPower is considering whether, and when, the program should transition from using LGCs to REGOs and we look forward to working with the Department and CER to ensure this process can be completed with minimal impact on renewable energy customers.
Policy position proposal 22
A new RMF will be calculated for use within the GO scheme that is updated frequently and can be accessed by other market-based frameworks.
› Broadly support but requesting additional detailed consultation
Comments:
Further consultation is needed on the design of the RMF and small-scale system eligibility. We are keen to work with the Department on approaches to these issues as it is an opportune time to consider them while the legislation that will be required to implement the proposed GO schemes is being developed.
Additional information is needed regarding the calculation of the proposed new RMF, existing calculation methods for electricity NGA factors, and how small-scale systems as well as voluntary markets are considered. The framework needs to clearly distinguish between an NGA factor intended purely for national emissions reporting (i.e., the current NGA factors) and emissions intensity factors (both for location-based reporting and in an RMF) intended for sub-national, corporate or individual consumer reporting.
The current situation is inconsistent and eroding trust in renewable energy products. Some of the key reasons for this are that states and corporates can choose whether to use location-based or market-based reporting, the NGER scheme is misunderstood as providing data for use in market- based reporting, and all small-scale generation is included in NGA electricity emissions factors.
The calculation of the RMF may need to be hourly if hourly time stamping is enabled.
It will be important to clarify which types of small-scale renewables should be included in the calculation of an RMF, and whether RMFs for each jurisdiction should also be published. The current, generally-accepted market consensus seems to be that the environmental benefits of small-scale renewables, including those which receive and on-sell STCs, remain with the owner of the small- scale system. This means that small-scale renewables should currently be excluded from calculations of what is renewable generation in any RMF. This market consensus position may change if only some types of small-scale renewables become eligible to receive REGOs or other
GreenPower® | Accredited Renewable Energy 23
incentives from Australian governments, especially after 2030. Please also refer to our response to policy proposal 2 in the REGO consultation for further information on our position.
Policy position proposal 23
RECs used to demonstrate renewable electricity usage in production of a GO product must have been issued within the previous 12 months. Additional information will be captured on REGOs to allow for voluntary time matching at a more granular level.
› Broadly support with some considerations suggested
Comments:
Floating certificate vintage requirements may be difficult to assess and could result in significant compliance costs. Alignment with calendar years or financial years could simplify compliance checks.
GreenPower is keen to work with the Department and the CER on this proposal so that it can be aligned with GreenPower’s proposed certificate vintage requirements. GreenPower is currently proposing to introduce a 15 month certificate vintage requirement on accredited GreenPower
Providers. This would require GreenPower Providers to source GreenPower LGCs (or potentially
REGOs in future) with a Generation Year which is either from:
• the year in which the Provider sells GreenPower to a customer (within the relevant
compliance year)
• prior to 31 March in the year after the Provider sells GreenPower to a customer (three
months following the end of the compliance year).
This effectively becomes a maximum 15 month certificate vintage as GreenPower Providers must surrender an equivalent amount of GreenPower LGCs within three months of the end of each
GreenPower reporting year, and GreenPower reporting years are currently aligned with calendar years.
Policy position proposal 24
The GO scheme will expand over time by incorporating new product-specific methodologies. A prioritisation, development and review process with industry input and international engagement will be established to ensure domestic applicability, international alignment, and continued suitability of legislation.
› Support
Comments:
We look forward to providing input into the prioritisation process for future development and expansion of the GO scheme. In particular, there is strong interest from gas sector stakeholders to have assurance that the transition from GreenPower’s Renewable Gas Certification Pilot to an ongoing scheme doesn’t impact commercial arrangements.
- End of questions –
GreenPower® | Accredited Renewable Energy 24
