**Published name**
Below baseline: Power stations that have Renewable Energy Target baselines are proposed to be eligible to create REGO certificates for ‘below baseline’ generation.
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Small scale systems: Power stations, including small-scale system owners, are proposed to be able to assign the right to create REGO certificates to another person or entity by written notice and in accordance with regulations. The regulations are proposed to include requirements for REGO scheme participants who have been assigned the right to create REGO certificates on behalf of another person, such as information that must be collected and maintained, metering arrangements, and certificate creation processes.
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Electricity storage: Electricity storage is proposed to be eligible to create REGO certificates where it can be demonstrated that renewable electricity has been stored, with detailed arrangements to be outlined in regulations. The approach paper provides details of a proposed method for electricity storage facilities to prove they have stored renewable electricity in Section 1.3.
This is absolutely essential.
Surrender restrictions: The REGO scheme legislation is proposed to include a provision allowing regulations to be made that could limit the surrender of REGO certificates for ‘below baseline’ generation prior to 2030.
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Below-baseline status: Below-baseline REGO certificates are proposed to be clearly differentiated from other certificates. Stakeholder views are invited on how this should be implemented.
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Time stamping: REGO certificates are proposed to include a time stamp only where 1 MWh is generated within an hour. A procedure for time stamping certificates will be outlined in regulations.
This approach misses a critical opportunity.
I lay out the need for companies to access data on the emissions displaced for each MWh certificate in articles for RenewEconomy and The Australian (https://reneweconomy.com.au/companies-can-speed-up-the-energy-transition-we-should-let-them/ and https://reneweconomy.com.au/why-time-stamping-renewable-certificates-will-take-us-closer-to-net-zero-emissions/ and https://www.theaustralian.com.au/business/renewable-energy-economy/powering-up-the-proposed-rego-renewable-energy-certificate/news-story/4fb93c319090670f16521e58feb2d015).
Without this data, companies risk being accused of greenwashing for neutralising their megawatt hours but not their usage emissions. Timestamping is a crude proxy for emissionality and will frustrate trading liquidity and certificate price discovery.
The Consultation Paper makes an important error in disregarding AEMO's Carbon Dioxide Emissions Intensity Index as a ready source of displaced emissions data, and incorrectly points to the relevance of a theoretical marginal abatement value. Marginal abatement is incorrect for several reasons:
• Tim Nelson et al’s 2021 paper for the Australian Journal of Agricultural and Resource Economics showed that marginal emissions are similar across all states, with the marginal set by similar fossil fuel assets. Average and total emissions of course differ by state and point to different energy transition investment needs, which a relevant to voluntary certificate buyers.
• Reference to marginal emissions would not incentivise output from electricity storage, with batteries well placed to time shift solar to evening peak electricity demand, but early evening marginal emissions relatively low as a result of gas being economic at this time of day.
• Reference to marginal emissions could reduce the overall number of renewable certificates procured, by attaching higher emission savings to midday certificates, given that coal would otherwise output at this time.
• Pursuit of a value for marginal emissions would be administratively burdensome to compute for each asset at each dispatch interval and would be highly theoretical at high levels of renewable penetration.
• Reference to state-level average emissions for each megawatt hour and dispatch interval would allow a company’s grid energy use emissions to be calculated in a consistent way to their certificate emissionality, using the grid average. This would build literacy and the incentive for energy efficiency and emissions-sensitive load shaping to align usage with grid conditions.
Companies might use energy when grid emissions intensity is high and buy certificates from when renewable output is abundant and grid emissions are already lower. A company doing this could be under the mistaken impression that they had fully cancelled out the emissions from their use of fossil fuelled electricity.
If high ambition companies understood that they hadn’t neutralised their energy use emissions, a new tier of green ambition could evolve centring on energy emissions.
The emissions data already exists and could be stamped on each megawatt hour-based certificate, with a just a small change to AEMO’s Carbon Dioxide Emissions Intensity Index.
Corporate buyers with energy use emissions want to direct their spend to where it matters for energy decarbonisation. Average emissions do this better across Australia’s states than industry talk of a theoretical marginal measure or cumbersome time-based credentials, and access to the data would spur innovation.
It would be such a shame to miss this opportunity.
