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1st February 2023
Attention: Department of Climate Change, Energy, the Environment and Water
RESPONSE TO POLICY POSITION PAPER FOR RENEWABLE ELECTRICITY CERTIFICATION UNDER THE
GUARANTEE OF ORIGIN SCHEME
Energy Person Pty Ltd (EP) is a sole Director contractor/consultancy business providing services to renewable energy projects and enterprises. The Principal, Andrew Stevens, has ~20 years’ experience in energy markets, and energy enterprises ranging across coal, gas, solar and wind generation, and recently, green fields hydrogen production projects.
Mr Stevens has been a registered and active user of the Clean Energy Regulator (CER) Renewable Energy
Certificate (REC) Registry including account and user administration; creating, and certifying generation systems; creating and transacting RECs. Mr Stevens affirms the competency of the CER and REC Registry personnel and is supportive of their proposed role in both the REGO and GO Product Schemes.
EP thanks the Department for the opportunity to provide feedback to the [Policy Paper] and refers the
Department to the following comments:
Policy position proposal 1: The scheme will be covered under new legislation administered by the CER.
• EP supports the proposal that the GO scheme is covered by new legislation, rather than via amendments
to the NGER Act 2007.
Policy position proposal 2: The Product GOs will cover the well-to-user system boundary.
• EP supports the proposal to have a Well-to-user system boundary.
• EP suggests that mandatory recording and reporting at each of the notional stages therein (Input materials,
Production and Transport & Storage) will provide transparency and scheme credibility benefits and will
also allow for improv 3rd party data analysis.
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.
• EP supports the proposal that there be no minimum emissions intensity threshold/requirements to
participate in the GO Products scheme.
Policy position proposal 4: The GO scheme will be cost recovered in line with Australian Government policy.
• EP perceives that a fee levied in the early stages may dissuade participants from early engagement.
• EP supports the proposal to recover efficient overall costs, at a point of time in the future when the
hydrogen industry is established and there is a competitive market, in line with the Aust Govt Cost
Recovery Guidelines.
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.
Energy Person Pty Ltd
andrew@energyperson.com.au
Mullaloo W.A. 6027
• EP notes the GO Product scheme is a new/novel mechanism designed to provide transparency/credibility
initially to the emerging Hydrogen industry, but ultimately to an expansive (if not practically unlimited)
range of products.
• Certification, particularly of a '100% net emissions free' product, is likely to add commercial value to a
product/industry. As such, EP agrees the Scheme should have mandated review windows, which can
thence be planned and resourced appropriately.
• To ensure the scheme can adapt to fast-changing macro factors (eg. new rules in major global
markets such as the EUs CBAM, newly implemented or modified ISO standards etc) EP supports
a review TWO years after the initial implementation of the Scheme, with reviews every THREE
years after that, until it is deemed (at the completion of the last 3-year review period) that the
scheme and the macro factors are sufficiently stable to warrant a shift to reviews every FIVE years
going forward.
• EP believe there should be a mechanism that may enable the Scheme to bring forward a Review
in a circumstance where waiting for the next mandated review would otherwise create an
unacceptable time-delay in realigning the Scheme with changed macro factors/standards and
which may therefore disadvantage Scheme participants relative to international competitors.
• EP notes that the scheme must allow for slow, and fast-tracked, rule and procedure changes (ie.
Changes not requiring legislated changes to the Act ) to ensure that unforeseen/unintended
outcomes and manifest errors can be corrected outside of the 2/3/5/X yearly scheme Reviews.
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 (e.g. time of generation, grid location, commissioning date, end user, etc) and the information that should be publicly visible on Product GOs? (emissions intensity, volume, relevant inputs, etc).
• REGOs: EP has provided separate feedback on this topic by responding to the Departments REGO policy
proposal numbers: 8, 9, 10, 11, 12 and 13 and EP refers the Department to those responses.
• GO Product (on a 'per kg' of product basis): EP supports the development of a rigorous and transparent GO
Scheme. As such IGE's stance is that products registered in this scheme, and presumably wishing to benefit
from registration, should be required to accurately provide clarity on the carbon/emissions status of that
product. A non-exhaustive list of product data that should be publicly visible on REGOs should include:
• Name of registered entity.
• Location of each manufacturing facility
• Production stage(s)
• Production method(s)
• Relevant energy grid/network
• Marginal Loss Factor.
• Breakdown of Scope 1 and Scope 2 energy inputs per-kilogram of Product .
• (Net) Product emissions intensity.
• Total % of the embedded energy that is renewable/offset.
• Transparent audit trail of embedded REGOs with links from the GO Product back to the relevant
REGO and its publicly available data/attributes.
• Production Date (to nearest MM-YYYY).
• GO Product Certification Date.
• Product serial/batch numbers.
Energy Person Pty Ltd
andrew@energyperson.com.au
Mullaloo W.A. 6027
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.
• EP supports the Department's proposal that Product GOs will use a provenance approach, while REGOs
will be tradeable independently of the electricity they were created alongside.
• EP notes some concern where a REGO is created on completely isolated network (eg. Via a solar farm
on a remote mine site) is acquired and embedded into a GO Product thereby lending
implausible/impractical green credentials to that Product. EP would view that as an exploitative wealth
transfer to the REGO creator and potentially undermining/discrediting the GO Product scheme.
Policy position proposal 8: An upfront data reporting model will be implemented to provide a practical reporting process.
• EP supports the Departments proposal to implement an upfront data reporting model, rather than a model
where each certification batch is otherwise assessed in detail.
Policy position proposal 9: There will be four scheme participant roles with differing responsibilities and permissions.
• EP supports the Departments proposal to implement four scheme participant roles with differing
responsibilities and permissions.
• EP agrees the functionality should allow for a Register Person have multiple participant roles.
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.
• EP supports the proposed time frames as sufficiently granular (where one-hour increments are the
smallest reporting/creation time frame) and sufficiently large (where one year is the largest reporting time
frame).
• EP considers the CER may be shown evidence that smaller timeframe (eg. 30-minutes, or multiples
thereof) might be preferable and in that case, EP would also support smaller increments if proposed by
the Department.
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.
• EP supports the proposal that Product GOs will require creation and transport and storage information to
be complete but it is unclear to EP if the transport and storage information will always be available or
known at the time of preferred GO Product Certification. Administratively it may be beneficial if batch
certifications can be saved at each Stage such that a batch can be completed when details like Transport
and Storage can be determined.
Policy position proposal 12: REGOs are proposed to be available to be traded or surrendered after being validly created.
• EP supports the proposal that REGOs are proposed to be available to be traded or surrendered after
being validly created.
• EP does not support REGO's created more than 24 months beforehand, being consumed for the creation
of a GO Product.
Energy Person Pty Ltd
andrew@energyperson.com.au
Mullaloo W.A. 6027
Policy position proposal 13: The CER will undertake compliance monitoring and will have regulatory powers to address non-compliance.
• EP supports the proposed strong 'upfront' registration requirements of users, facilities, and products.
• EP supports the compliance arrangements, and enforcement/punitive actions, as proposed by the
Department.
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.
• EP supports the Departments proposal to have 'front-loaded' LSTRs for product registration as EP
perceived this will:
▪ Minimise ongoing participation certification compliance costs.
▪ Reduce the probability of certification error or fraud.
▪ Give added credibility to the Scheme.
▪ Better align the GO Scheme with the IPHE methodology.
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.
• EP supports the Department's proposal that where Product GOs have incorrect information, they will be
updated to reflect the most up to date information.
• EP agrees that after the ARC process and Product GOs have been finalised, they will not be subject to
further amendments.
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.
• EP agrees that 'overs' and 'unders' REGOs should be retrospectively corrected once the error is identified.
• A batch of REGOs or GO Products will often be created over a batch-period of much longer than 60
minutes (eg. 1st month to last day of the month)
Policy position proposal 17: The Department proposes the GO scheme methodologies will align where possible with the NGER and the Safeguard mechanism.
• EP supports the Departments proposal to align the GO Scheme where possible with the NGER and the
Safeguard mechanism.
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.
• EP is supportive, in principle, of the concept of establishing formal data sharing arrangements with other
schemes. EP notes however that this workstream will be scrutinised (by participants) as to the detail of
what the CER would be allowed to share. Participants will be concerned that commercially sensitive
information may be bundled into the datasets.
• EP suggests the Department rationalise the datasets that (any) other entity/scheme should be able to
have access to and separately propose that for consultation before making a generic information interface
available for other scheme operators.
Energy Person Pty Ltd
andrew@energyperson.com.au
Mullaloo W.A. 6027
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.
• EP supports an initial Materiality Threshold of 2.5%, noting the obligation to otherwise report or estimate
emissions if the NGER scheme would require it.
• EP believes that threshold should be mandatorily review at each Scheme Review.
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.
• EP supports the proposal that ACCUs issued from within the system boundary can (and must) be
surrendered for the emissions reductions to be recognised under the GO scheme.
• EP does not support the inclusion of ACCUs, in their current design form, that are created outside the
system boundary, being included in the GO Product Scheme/reducing a GO Product's carbon intensity.
• EP believes the Scheme design should leave room, or be adaptable, to Offset credits in the future.
Specifically, where a subset of Offsets that are deemed 'permanent' may be created, EP would support
their inclusion in the GO Scheme as this would encourage investment in that permanent carbon reduction
method.
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.
• EP agrees with the Department in regard the treatment of LGCs and REGOs to demonstrate renewable
electricity use and in regard to the treatment of behind-the-meter (BTM) generation.
• (Properly metered) BTM generated electricity should either create no certificates, or any created must be
surrendered to make claim for renewable electricity generation in that GO Product system.
Policy position proposal 22: A new Residual Mix Factor (RMF) will be calculated for use within the GO scheme that is updated frequently and can be accessed by other market-based frameworks.
• EP agrees broadly with the RMF calculation methodology (ie. Removing energy and surrendered
certificates to leave a residual quantity of energy with fewer associated RECs, and therefore a higher
emissions factor.)
• EP poses the question: As REGOs as proposed to be surrendered at any time after their creation, is it
possible that in a future year more REGO's are surrendered, than energy generated, and this creates a
negative emissions intensity for that year? Systemically, the proposed calculation method appears to have
potential to distort the RMF in years where very large numbers of historically created REGOs are
surrendered.
• EP agrees that the RMF should be approachable and usable by other market-based frameworks.
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.
• EP supports the proposal that RECs used to demonstrate renewable electricity usage in production of a
GO product must have been issued within the previous 12 months.
• Due to the additional complication and potential administrative/process burden, EP does not support any
mandatory requirement to time match renewable energy generation associated with the creation of a
Energy Person Pty Ltd
andrew@energyperson.com.au
Mullaloo W.A. 6027
REGO or LGC, with GO Product time of creation and foresee the desire for this to fall away as renewable
generation becomes more ubiquitous in the coming decade (particularly after 2030).
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.
• EP agrees with the Department's proposed approach (prioritisation and methodology) to incorporating
more GO Products to the Scheme.
• EP suggests that prioritising new GO Products that are key input raw materials (eg. Iron ore) or next-phase
of raw materials (eg. Pre-construction steel or cement) which will contribute to reducing the scope and
complexity of certifying new 'finished' GO Products and suggests this may be a broad prioritisation
consideration.
Thank you for considering the comments herein.
Yours sincerely
Andrew Stevens
Principal
Energy Person Pty Ltd
andrew@energyperson.com.au
Mullaloo W.A. 6027
