ACT Sustainable Energy Policy Energy for a sustainable city
2011-2020 © Australian Capital Territory, Canberra 2011
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Printed on recycled paper CONTENTS
MINISTER’S INTRODUCTION 1 SUMMARY OF MEASURES 3 A SUSTAINABLE ENERGY POLICY 5 The need for a Sustainable Energy Policy 5 The purpose of this Policy 5 Features of the ACT energy market 6 Regulatory environment 7 The national policy context 9 How does this Policy fit with the ACT Government’s other policies? 9 GREENHOUSE GAS AND ENERGY TARGETS 10 The ACT’s emissions profile 10 Emission reduction targets 10 Clean energy and energy intensity targets 11 OUTCOME ONE: RELIABLE AND AFFORDABLE ENERGY 12 The national policy context 12 Augmenting existing energy network infrastructure 13 Emergency management and business continuity planning 13 Distributed generation 14 Increasing electricity customer choices 14 National Energy Customer Framework 14 Support for low-income households 15 Smart meters, smart grids 15 OUTCOME TWO: SMARTER USE OF ENERGY 17 The national policy context 17 A target for non-renewable energy use 18 A new energy savings initiative 18 Improved building and planning regulations 19 Continued improvement in appliance and equipment energy efficiency 19 Government leading by example 21 OUTCOME THREE: CLEANER ENERGY 22 The national policy context 22 A renewable energy target 22 A price on carbon 23 GreenPower 23 Cogeneration and trigeneration 23 Large-scale, low-emission generation capacity 24 Encouraging solar generation 24 Integration of waste and energy policies 25 OUTCOME FOUR: GROWTH IN THE CLEAN ECONOMY 26 Support innovative local businesses 26 Skills for a clean economy 26 ACT Government’s clean technology business development strategy 27
ACT SUSTAINABLE ENERGY POLICY i ACRONYMS
AEMC Australian Energy Market Commission AEMO Australian Energy Market Operator AER Australian Energy Regulator COAG Council of Australian Governments FiT Feed-in Tariff ICN Industry Capability Network ICRC Independent Competition and Regulatory Commission LRET Large-scale Renewable Energy Target MEPS Minimum Energy Performance Standards NECF National Energy Customer Framework NEM National Electricity Market NOSEC National Oil Supplies Emergency Committee SCER Standing Council on Energy and Resources SRES Small-scale Renewable Energy Scheme WEST Water and Energy Savings in the Territory YWCA Young Women’s Country Association ii ACT SUSTAINABLE ENERGY POLICY MINISTER’S INTRODUCTION
As a community, the way we respond to the challenge of climate change will be a defining legacy of this generation.
Energy consumption is fundamental to our quality of life. Energy powers our homes and schools, heats and cools our workplaces and hospitals and transports us in cars, buses and planes.
However, the way we produce and consume energy now is unsustainable. There is credible science and observable evidence indicating that human-induced greenhouse gas emissions are polluting the earth’s atmosphere and leading to dangerous and irreversible climate change. Burning fossil fuels is a major contributor to those climatic changes.
In response to the challenge that climate change poses, the ACT Government the most recent developments in has committed the ACT to achieving technologies and our understanding a set of greenhouse gas emissions of the challenge is required to most reductions targets leading to zero net effectively meet our targets. This greenhouse gas emissions by 2060. The includes developing and implementing measures to achieve this outcome will measures within the context of the be guided by the overarching framework Commonwealth Government’s response outlined in the ‘Canberra Plan: Toward to climate change. In addition, the Our Second Century’ and included in measures in this document and possible both this Sustainable Energy Policy and future measures need to be considered Action Plan 2 arising from Weathering in the context of their relative cost the Change, the ACT’s climate change effectiveness, as well as their social strategy. and economic impacts.
Delivering on our ambition for a This Sustainable Energy Policy is built carbon-neutral ACT is possible only on the draft policy released in late 2009 with a sustainable energy policy. and incorporates submissions received A progressive energy policy must in response to the draft. The final policy provide for environmental and climate reflects changes in the policy landscape protection while ensuring sustainable since that time. prosperity, social equity and energy security. At the heart of this policy I would like to take this opportunity to are two key elements: significantly thank all those who found the time to increasing energy efficiency and greater prepare submissions and attended the use of renewable energy. public forums. All the submissions and The ACT’s sustainable energy policy comments received on the draft policy integrates energy policy objectives of were considered thoroughly and, where ensuring secure, reliable and affordable possible, addressed in this policy. supplies of energy with our climate change objectives. The ACT will be innovating and leading by greening and developing the ACT’s economy for a sustainable and climate-friendly future.
Importantly, this should be considered a living policy document. An iterative Simon Corbell MLA Minister for the Environment and approach whereby energy efficiency Sustainable Development measures are updated to reflect September 2011
ACT SUSTAINABLE ENERGY POLICY 1 2 ACT SUSTAINABLE ENERGY POLICY OUTCOME ONE: RELIABLE AND AFFORDABLE ENERGY Measure 1: The ACT will continue to actively promote the development of national energy policy and market frameworks that integrate social, economic and environmental policy objectives and represent the interests of the Territory. Measure 2: A second connection point at Williamsdale in the south of the ACT will increase the security of the ACT’s connection to the National Electricity Market. The connection is under construction and will be completed as soon as practicable. Measure 3: The ACT will consider the removal of the regulated electricity tariff and thereby encourage new and innovative pricing and service arrangements, where sufficient electricity retail competition exists and where this is demonstrated to be in the interests of the ACT community. Measure 4: The ACT Government will implement the National Energy Customer Framework as one of the final steps in the national energy reform process agreed to by the Council of Australian Governments (COAG). Measure 5: The ACT will seek to address the impact of rising energy prices on households through ongoing monitoring of the suitability of concession arrangements, indexing concession payments based on changes in the cost of living and by investing in energy efficiency measures that can reduce energy costs for low-income households. Measure 6: The ACT Government will decide whether to fast-track the roll-out of smart meters based on a cost-benefit analysis and the outcomes of the current ActewAGL trial and research and analysis undertaken through the COAG Standing Council of Energy and Resources. OUTCOME TWO: SMARTER USE OF ENERGY Measure 7: The ACT will continue its policy of timely implementation of energy efficiency reforms arising from the National Partnership Agreement on Energy Efficiency, where they are suited to the ACT. Measure 8: The ACT will establish a target for the per capita usage of non-renewable electricity. Measure 9: The ACT will, subject to a regulatory impact assessment, establish a new ambitious energy savings initiative, funded by energy users, providing support to low-income households and stimulating the broad-scale energy efficiency improvements of homes and small businesses across the Territory. Measure 10: The Government will seek further consolidation and integration of energy efficiency and social support programs across all Government agencies. Measure 11: Building on our leadership to date, the ACT Government will continue to advocate for effective national standards for buildings and building services through various national forums including the Building Ministers’ Forum and the COAG Standing Council on Energy and Resources in relation to the National Partnership Agreement of Energy Efficiency. The ACT Government will advance its building and planning policies in a manner consistent with its Sustainable Energy Policy objectives. Measure 12: The ACT Government will continue to support the improvement of the energy performance of appliances and equipment through measures such as the Minimum Energy Performance Standards (MEPS) program and labelling requirements for electrical and gas appliances. Measure 13: The new Transport for Canberra policy will include policy measures and actions to reduce energy use in transport, based on reducing travel demand (e.g. encouraging walking, cycling, public transport, carpooling) and increasing vehicle efficiency (light and heavy vehicles). Measure 14: The ACT Government will review the existing Green Vehicles duty scheme and consider how it would more effectively encourage less energy intensive vehicle purchases, and will explore new pricing and regulatory initiatives to encourage a transition to low emission vehicles in a transport pricing study in 2011-12.
ACT SUSTAINABLE ENERGY POLICY 3 Measure 15: The ACT Government will support the roll-out of electric vehicle support infrastructure through the provision of enabling assistance and will introduce electric vehicles into the ACT Government fleet in 2012-13. Measure 16: The Government will undertake transport modelling each year to support the optimisation of transport infrastructure and undertake cost benefit analyses of supportive infrastructure for new developments across the city. Measure 17: The Government will continue to work towards best practice in both energy management for its own operations and in its carbon neutrality objective through the development of an ACT Government Carbon Neutral Framework.
OUTCOME THREE: CLEANER ENERGY Measure 18: The ACT will continue to actively promote the development of national energy policy and market frameworks that integrate social, economic and environmental policy objectives, including in support of renewable and low-carbon distributed energy technologies. Measure 19: The ACT will continue to support a national carbon pricing regime as an economically efficient way of decarbonising our electricity supplies. Measure 20: The ACT Government will continue to encourage the uptake of accredited GreenPower products within the Territory, and work towards enhancing the standing of GreenPower products through the National GreenPower Steering Committee. Measure 21: A target for renewable energy usage has been set in legislation under the Climate Change and Greenhouse Gas Reduction Act 2010 and this target will be reviewed following the finalisation of Action Plan 2. Measure 22: The ACT Government will assess the feasibility of including distributed generation technology in upcoming major developments such as the proposed upgrade of Canberra Hospital and the Braddon-Reid redevelopment. The ACT Government will propose specific measures to encourage a greater awareness and deployment of distributed generation options including cogeneration, trigeneration and large scale, low emissions generation technologies. Measure 23: Legislation in support of a large-scale Feed-in Tariff (FiT) will be introduced in 2011. A first tranche of up to 40MW will be made available through an auction process to ensure the lowest possible prices. Measure 24: Options to create energy from waste, including through trialling of energy from waste technologies will be investigated.
OUTCOME FOUR: GROWTH IN THE CLEAN ECONOMY Measure 25: The ACT Government will continue to support capability development in ACT companies that are developing clean technology products or services and creating sustainable businesses. Measure 26: The ACT will continue to support national approaches to skills development that reduce cost and delays in the transition to a clean economy and create new employment opportunities, especially building the skill base of workers to succeed in the clean technology economy. Measure 27: The ACT Government is undertaking work to identify local business and research capability in the emerging clean technology sectors. This will be used to inform business policy and program design to support the development of future growth sectors in clean technology.
4 ACT SUSTAINABLE ENERGY POLICY A SUSTAINABLE ENERGY POLICY
This chapter provides an overview across all levels of government (national, of issues underpinning the need for a state and territory, and local) and all more sustainable way of producing and sectors of the ACT community including using energy and how they relate to the businesses, households and individuals. Sustainable Energy Policy. An ACT Sustainable Energy Policy needs The need for a Sustainable to be strongly integrated with, and Energy Policy complementary to, federal policies and considerate of international trends as Reliable and affordable energy will well as responding to the needs and underpin our Territory’s wellbeing and ideas of our community. Accordingly, the prosperity into the future. However, we measures it proposes may be enhanced are now aware of the way our patterns or amended as more specific details of energy usage are impacting on our emerge leading up to implementation. environment. Human-induced climate change is one of the greatest and most The role of markets as major drivers of urgent threats confronting humanity and investment in our community should action on climate change has profound be recognised and policy should, where implications for the way we use energy. practicable, seek to correct market failures rather than work at odds A modern energy policy needs to with prevailing market forces. consider the social, economic and environmental dimensions of energy The purpose of this Policy use in tandem. The purpose of this Sustainable Energy Our Sustainable Energy Policy addresses Policy is to establish an integrated policy all three of these dimensions. framework for managing the social, economic and environment challenges • Social—substantial upwards pressures faced by the Territory to 2020 as they exist on energy pricing related relate to energy production and use. primarily to exogenous factors such as higher commodity prices, The framework consists of four key required investments in generation targeted outcomes: and network infrastructure and environmental policies including • Outcome one: secure and affordable a potential price on carbon. This energy Policy seeks to mitigate the potential higher energy costs by supporting • Outcome two: smarter use of energy competition in energy markets and • Outcome three: cleaner energy investing in the energy efficiency of our homes and businesses. • Outcome four: growth in the clean economy • Economic—the ACT Government’s commitment to a sustainable Related to each outcome are a series Canberra embraces a prosperous of measures which will underpin the economy founded on secure and Government’s energy policy work affordable energy supplies and a program to 2020. These actions are strong clean energy sector. generally framed at a strategic level • Environmental—mitigating the rather than detailing specific program damaging effects of greenhouse gas measures. Further details of specific emissions, through its relationship to measures, as they relate to greenhouse the ACT climate change strategy, is gas emissions abatement, will be fundamental to this Policy. progressed through the development of the ACT’s climate change strategy, Achieving sustainability in our energy Action Plan 2 Weathering the Change. systems requires coordinated action
ACT SUSTAINABLE ENERGY POLICY 5 Features of the ACT energy market The ACT has no significant domestic electricity generation, for example, electricity generation and imports all depends on non-renewable fossil fuel natural gas and transport fuels, the sources, with coal representing 76 per exceptions being some generation from cent and natural gas 16 per cent.1 mini-hydro, landfill methane gas and While we will continue to rely on small-scale solar, which generate less fossil fuel-based energy in the short to than one per cent of electricity used medium term, that dependence needs in the Territory. The remainder of our to be reduced as quickly as possible. electricity is sourced from the National Electricity Market from generators in Australia’s demand for fossil fuels for other states. motor transport is also increasing. Ethanol and other alternative vehicle The ACT as part of a broader Australian fuels including liquefied petroleum gas, economy is, and will continue to be, compressed natural gas and emerging dependent for some time to come on technologies such as hydrogen fuel cells non-renewable fossil fuel sources such will play an increasing role in meeting as coal, natural gas and petroleum. longer-term motor vehicle fuel needs. Over 90 per cent of the current national
FIGURE 1: MAJOR SOURCES OF ENERGY FOR THE ACT IN 2007–08 16
14 Renewables Non-renewables 12
10
8
6 Energy (Petajoules) 4
2
0 Electricity imports Natural gas Transport fuels Local renewables
National renewables fraction used for 2007–08. Source: Energy in Australia 2010.
In 2008 emissions from transport- Transport energy use in the ACT is related activities accounted for 23 per dominated by private passenger vehicle cent of total ACT emissions but around transport and energy usage has been 44 per cent of total energy imports. relatively stable in recent years despite The use of ethanol, while increasing, strong population growth. While accounted for less than 1 per cent of substantial improvements have been total transport fuels. achieved in vehicle engine efficiency in recent years, this has been partially offset by the trend to heavier vehicles.
1 Energy in Australia 2010
6 ACT SUSTAINABLE ENERGY POLICY FIGURE 2: BREAKDOWN OF THE MAJOR USES OF ELECTRICITY AND NATURAL GAS IN THE ACT
Estimated breakdown of electricity uses in 2010 Estimated breakdown of natural gas uses in 2010
Residential appliances (incl. lighting) Residential appliances Residential cooking Residential cooking Residential water heating Residential water heating Residential space heating Residential space heating Residential space cooling Retail Retail Health and aged care Health and aged care Offices Offices Education Education
Source: Pitt & Sherry 2011.
Figure 2 provides an estimated electricity consumption under business breakdown of electricity and natural gas as usual conditions. While increases in usage in the ACT. This analysis shows efficiency can help curb the growth the that space heating is the major user energy consumption, meeting the ACT’s of natural gas in the Territory. This is growing demand for energy will require expected to grow as households move the development of more sustainable away from relatively expensive electric energy sources. heating technologies. Residential water heating and retail applications such Regulatory environment as restaurants and cafes are also large The National Electricity Market (NEM), users and are expected to grow in the established in 1998, allows power flows coming years. across jurisdictional borders. The NEM operates as a wholesale spot market Residential appliances have also been in which generators and retailers trade a major growth category of electricity electricity through a pool managed by usage in the ACT as more and more the Australian Energy Market Operator electronic goods are purchased for the (AEMO). home. Increases in the stock of electrical appliances and equipment are expected The regulation of electricity and gas to more than offset the substantial transmission networks in the NEM is the gains in appliance efficiency expected responsibility of the Australian Energy over the period of this policy. Similarly, Regulator (AER). However, the ACT while commercial office buildings are retains jurisdiction over technical and expected to become more efficient, the safety aspects of the network. growth in the size of the ACT’s business sector is likely to result in growth in
ACT SUSTAINABLE ENERGY POLICY 7 FIGURE 3: NATIONAL ELECTRICITY MARKET STRUCTURE2
physical transmission electricity flows distribution physical network network physical electricity plant dispatch instructions electricity flows flows industrial generators AEMO retailers consumers consumers determines the amount of the power required electricity electricity payments payments supply offers
electricity settlement payments electricity settlement payments
financial contracts
ACT electricity and gas markets have reduce costs and regulatory barriers and been opened to competition as a result that attract competitive participants in of the National Competition Policy reforms our electricity retail market. from the mid 1990s. As part of that set of reforms, the ACT established Importantly, the new nationally independent arrangements for the consistent framework will continue to regulation of its electricity and gas provide access to the Administrative markets through the Independent and Consumer Appeals Tribunal (ACAT) Competition and Regulatory Commission for assistance in resolving complaints Act 1997 and the Utilities Act 2000. about utility services and for cases Those statutory frameworks provided of financial hardship. Those consumer for licensing of utility service providers, protection facilities will remain an ACT pricing of utility services and consumer responsibility under the NECF. protection and technical and safety regulation. In the transition to national regulation of energy markets, technical and safety Responsibility for electricity network regulation will remain with the Territory, regulation transferred to the AER in as will consumer protection and 2009 and a range of retail regulatory licensing for networks. functions are likely to be moved to a new nationally consistent framework No decision has been made to in 2012 through the adoption of the change current price regulation National Energy Customer Framework functions as currently administered (NECF). The ACT Government is by the Independent Competition committed to a timely implementation and Regulatory Commission (ICRC). of the NECF and will continue to work However, this will be the subject of closely with our federal, state and active consideration during the term of territory counterparts to develop further this policy with the ACT Government to reforms that will create a more seamless monitor market conditions with a view national market for electricity retailing. to the eventual removal of price controls As a relatively small jurisdiction, the where it can be demonstrated to be in ACT stands to benefit from reforms that the interests of the ACT community.
2 Energy in Australia 2010
8 ACT SUSTAINABLE ENERGY POLICY The national policy context How does this Policy fit with the ACT Government’s other National responses are being developed policies? to address our future energy needs including ongoing reform of our energy This Policy is a major element of the ACT markets and support for the energy Government’s climate change strategy sector to transition to a low carbon Weathering the Change. Weathering the economy. The principal forum for Change Action Plan 2 is currently under coordination of the energy policies at development and public consultation a national level is the Standing Council on proposed new measures will be on Energy and Resources (formerly the conducted in 2011. Ministerial Council on Energy) under COAG. Along side Action Plan 2, the ACT is developing a planning strategy with Through COAG, the ACT is involved in the objective of providing a long partnerships to develop strategies and term planning policy and goals to implementation plans for activities promote the orderly and sustainable included in the National Partnership development of the ACT, consistent with Agreement on Energy Efficiency under the social, environmental and economic the National Framework for Energy aspirations of the people of the ACT. Efficiency, and the National Energy Customer Framework. The Government’s new transport policy, Transport for Canberra, will New and existing policy measures in the set out a transport policy as we move ACT will be reassessed continually to to a more sustainable and energy ensure that they remain complementary efficient future. Building on the strong to newly introduced national policies; framework established by the 2004 for example, a national price on carbon. Sustainable Transport Plan, Transport This requires a flexible and iterative for Canberra will include mode share approach that maintains the effort to targets to shift 30 per cent of work trips meet the climate change challenge at to sustainable transport modes by 2026, the lowest economic and social cost. supported by new strategies for public transport, active transport (walking Pricing carbon will provide incentives and cycling), roads, freight, parking for cleaner energy and the smarter use and fleet. The actions and policies in of energy. A national carbon market will Transport for Canberra will aim to create help direct abatement efforts towards a sustainable, integrated, safe, efficient the lowest-cost sources of abatement and equitable transport system. in the national economy. However, the ACT’s own greenhouse gas reduction These strategies will align closely targets may require us to implement with the Sustainable Energy Policy carbon reduction measures beyond that and together they will provide a required nationally. comprehensive and integrated framework for improving the sustainability and wellbeing of the ACT community.
ACT SUSTAINABLE ENERGY POLICY 9 GREENHOUSE GAS AND ENERGY TARGETS
The ACT’s emissions profile 37 per cent respectively. Nineteen per cent of emissions came from petrol Geographically, the ACT is Australia’s consumption with a further 4 per cent smallest jurisdiction with a resident from other transport fuels. Residential population of approximately 350,000 and non-residential natural gas (1.6 per cent of Australia’s population). consumption accounted for around 5 and 3 per cent respectively. Only In 2008, the ACT produced 4.18 million 6 per cent of emissions came from tonnes of greenhouse gas emissions. non-energy related sources such as Residential and non-residential industrial processes and waste. electricity use accounted for 25 and
FIGURE 4: THE ACT’S SOURCES OF GREENHOUSE GAS EMISSIONS
Residential electricity
Non-residential electricity
Residential natural gas
Non-residential natural gas
Petrol
All other transport fuels
Industrial processes
Waste
Other
The ACT’s per capita emissions are Combating climate change means approximately 12 tonnes of carbon a rapid reduction in emissions of dioxide equivalent emissions. While this greenhouse gases at an international is lower than any other state or territory, level with all communities making this figure is increasing at a greater rate an equitable contribution. Given our than national per capita emissions. Our relatively high per capita emissions and low per capita emissions are due to the high standard of living, there is a moral structure of our economy and the lack as well as an economic imperative for of large energy intensive industry in the the ACT to respond to the challenge of ACT. climate change by acting swiftly and effectively. While overall ACT per capita emissions are relatively low, our residential sector Tackling climate change requires emissions are relatively high on a per everyone to make an equitable household basis. Our high household contribution. ACT households are among emissions are due in large part to the most emissions-intensive in the higher heating requirements in the ACT world, and this means that we need to compared to elsewhere in Australia. work harder and faster than many other jurisdictions to reduce our emissions. It Without action to reduce the ACT’s also means that we are more exposed emissions they will continue to increase, to carbon constraints in the national as a result, apart from anything else, of economy as they impact upon future increases in the ACT’s population. energy prices and energy security. In 2010, the ACT Legislative Assembly Emission reduction targets passed the Climate Change and The argument for action to reduce Greenhouse Gas Reduction Act greenhouse gas emissions is compelling. 2010 introducing some of the most While action comes at a cost, the costs ambitious greenhouse gas reductions of delaying action are potentially much targets in the world. The principal target greater.
10 ACT SUSTAINABLE ENERGY POLICY of the legislation is to achieve zero net Figure 2 illustrates the challenge of emissions (carbon neutrality) by 2060. achieving our emissions reduction The following interim targets are also set: target relative to historical emissions trends. The 2020 target is equivalent • per capita emissions to peak by 2013; to an estimated 53 per cent reduction • emissions reduced by 40 per cent from 2010 levels. The life of this from 1990 levels by 2020; and Policy therefore represents the major turnaround in the Territory’s emissions • emissions reduced by 80 per cent trajectory. from 1990 levels by 2050.
FIGURE 5: THE ACT’S EMISSION REDUCTION TARGETS
5000
4000 Target years 000 ) 3000 o2 -e('
2000 onne sC T
1000
0 1990 2000 2010 2020 2030 2040 2050 2060
In 2060, to become carbon neutral, Clean energy and energy these commitments will require the intensity targets Territory to reduce its greenhouse gas emissions to the maximum extent The Climate Change and Greenhouse Gas Reduction Act 2010 also establishes possible and offset any residual a legislative basis for the development emissions by undertaking or investing in of targets for: accredited carbon offset projects. • the use or generation of renewable Producing energy from burning fossil energy in the ACT; and fuels is the major source of greenhouse • per capita usage of non-renewable gases in the ACT. Therefore, effective electricity. climate protection is impossible Final targets related to per capita without a Sustainable Energy Policy that non-renewable energy usage will supports reduced emissions through be informed by the Commonwealth cleaner energy generation and reduced Government’s response to the Prime energy usage. Minister’s Task Group on Energy Efficiency Report, in which they The ACT is working with other proposed a national retailer obligation jurisdictions across a broad range of energy efficiency scheme. The ACT areas to achieve national coordination in has established targets for the use of renewable energy of: emissions reductions and energy policy initiatives. It is important to recognise • at least 15 per cent by 2012; and that, while our efforts will build on • at least 25 per cent by 2020. effective action at the national level, participation in national activities will Weathering the Change Action Plan 2 not be adequate in itself to meet the will provide an opportunity for further ACT’s targets. consultation with the community on the potential to expand upon clean energy and energy intensity targets.
ACT SUSTAINABLE ENERGY POLICY 11 OUTCOME ONE: RELIABLE AND AFFORDABLE ENERGY
The national policy context be informed by the National Energy Security Assessment, which identifies The reliability and affordability of energy the current strategic energy security supplies has underpinned the growth of issues in the liquid fuels, natural gas and the Territory since its inception and is electricity sectors. central to supporting the economic and social development of our community into The ACT Government recognises the future. the challenge of potential supply and demand imbalances in world oil In an Australian context, energy security production in the medium to long is defined as the adequate, reliable and term, and the impact this may have on affordable supply of energy where: the price of fuels in the Territory and imported goods. The ACT Government • adequacy is the provision of sufficient is mindful of these factors in the energy to support economic and social development of transport and activity; planning policies.
• reliability is the provision of energy with The ACT Government will play an active minimal disruptions; and role in national energy policy processes consistent with our demonstrated • affordability is the provision of energy commitment to the reform of the NEM. at a price which does not adversely impact on the competitiveness of the The continual evolution and integration economy and which supports continued of Australia’s energy markets will investment in the energy sector. support security, reliability and affordability of energy in the ACT. The Affordability also relates to the impact of ACT will continue to promote and work rising energy prices on the cost of living, towards the integration of Australia’s and the standard of living for vulnerable energy markets and advocate for and low-income households in our consumer and environmental concerns to community. be addressed through these processes.
While Australia is one of the world’s great The Standing Council on Energy and primary energy producers and exporters, Resources (SCER) is the responsible body the ACT does not itself have abundant low for the national oversight of the energy cost primary energy reserves. Virtually market governance and institutional all of our energy needs are met through arrangements. The ACT along with electricity, natural gas and transport other jurisdictions is a member of fuel imports. Energy security in the SCER and has taken an active approach Territory is therefore heavily influenced by towards monitoring pricing trends in external factors such as the operation of these markets. The SCER is considering national electricity and gas markets and a number of changes in the national infrastructure. This is in turn influenced regulatory regime to discourage any by a range of international factors such as exercise of market power. international commodity prices and long- term supply constraints for petroleum and Within the ACT, the impact of policies other fossil fuels. on energy prices is also considered as part of the energy policy development The Commonwealth Government is processes. The development of a developing an Energy White Paper, which competitive market is an essential will set out federal policies for ensuring ingredient towards ensuring long term the provision of clean, adequate, reliable consumer benefits and sustainable and affordable energy supplies. This will
12 ACT SUSTAINABLE ENERGY POLICY pricing. In 2011, the ACT Government New generation technology and its recently decided to continue regulating integration into, and interaction with, electricity prices to protect consumers the existing networks can present while considering how to ensure the technical challenges and safety risks. development of a competitive market Standards for sustainable energy in the medium term. installations will be incorporated into the regulatory framework so that high safety Improving existing energy and reliability standards can continue network infrastructure to be enjoyed by owners and energy users in the ACT as new technology is The ACT has no significant transmission networks with the electricity market in implemented and improved. the ACT focusing on the distribution and retail supply of electricity and gas. Emergency management and business continuity planning Gas consumed in the ACT is produced While effective regulatory oversight in the Cooper Basin primarily located in and management of the energy South Australia and from Bass Strait in sector by governments has ensured Victoria and is transported to the ACT that customers in Canberra have by major transmission pipelines from access to a robust energy market and Moomba and Dalton to the north of enjoy reliable services of the highest the ACT and from Longford via the east standard, it is essential to plan for those coast of Victoria and NSW. rare unpredictable events that can disrupt our energy supplies on a Our transport fuels are imported large scale and cause hardship to the from the major petroleum processing community. and distribution facilities in NSW and Victoria. The ACT Government continually develops and updates emergency plans The ACT has a single secure connection to manage these events. These to the NEM and has applied the National include developing, testing and Electricity Law setting relevant reliability simulating public communication standards to ensure reliability for strategies and emergency response consumers. A second connection point actions in case of such events. The ACT at Williamsdale in the south of the ACT Government also regularly participates will increase the security of the ACT’s in national emergency exercises connection to the NEM. This connection involving other jurisdictions, energy is under construction and will be completed as soon as practicable. suppliers and AEMO. These activities ensure that the ACT will be prepared A fundamental part of a sustainable if such an event ever occurs. network is the effective regulation of its operation, maintenance and The ACT sits on the National Oil development with technical and safety Supplies Emergency Committee standards. Technical regulation supports (NOSEC), which provides an overall the implementation of new policies and management response to a national technologies. It can also help to reduce liquid fuel emergency. NOSEC costs to consumers from preventable comprises representatives from major upgrades and repairs to utility the Commonwealth (chair), the infrastructure due to poor maintenance states/territories and the downstream of the network or ongoing operational petroleum industry. The ACT problems. Government is a member of NOSEC and participates in emergency simulations.
ACT SUSTAINABLE ENERGY POLICY 13 Distributed generation argued that there was a risk that new retailers would not capture a sufficient Distributed generation, including mass of new customers over which to embedded cogeneration and spread their upfront fixed costs which trigeneration, as well as the construction gave an advantage to the incumbent of large-scale generation capacity in retailer that enjoys significant the ACT, would contribute significantly economies of scale. As a consequence, to the diversity of, and to reducing the AEMC argued that the margins the emissions intensity of, our power available to new retailers may not be the supplies. same as those earned by the incumbent retailer and that this was a major barrier The costs of renewable energy to competition in the ACT. generation options are expected to continue to come down through to The removal of regulated electricity 2020 and beyond and this will greatly tariffs and creating a more seamless enhance our ability to balance our national market could enhance national environmental, energy security and electricity retailers’ ability and incentives affordability objectives. to enter, and bring new products to the ACT market. New products may Options for promoting distributed include time-of-use tariffs which allow energy are further explored in relation consumers to make savings by shifting to Outcome three: cleaner energy. their consumption into off-peak periods, Increasing electricity for example by choosing to run their customer choices washing machines and dishwashers overnight. More efficient price signals Utility charges for energy and water can lead to more informed consumption services in the ACT are set by the ICRC decisions. on a periodic price path determination basis. In determining prices the Experience in the United Kingdom, ICRC considers a wide range of data where energy retailers are shifting from and issues including the prudent businesses simply trying to sell more and efficient costs of operating the energy into ‘energy service businesses’ business over the price period, required that actively assist customers to reduce investments in distribution networks their energy consumption, provides a and external factors such as energy further indication of what is possible. generation and transmission network pass-through costs. National Energy Customer Framework While prices have trended upward in The National Energy Customer recent years, the ACT currently has Framework (NECF) is one of the final among the lowest residential electricity steps in the national energy reform prices in Australia. This is primarily a process agreed to by COAG. The NECF result of the ACT having a relatively involves implementing a nationally young and well planned distribution consistent framework for the regulation network meaning we have not required of the retail supply of electricity and gas. the large network investments that have driven up prices in other jurisdictions. The implementation of the NECF is aimed at promoting competition for In a review of the effectiveness of the benefit of consumers by creating competition in the ACT retail electricity efficiencies and reducing the regulatory market released by the Australian burden on energy businesses that Energy Market Commission (AEMC) in operate across the various jurisdictions November 2010, the AEMC found that that make up the national energy the relatively small size of the ACT retail markets. Consumers will benefit electricity market meant that there were through enhanced consumer protection fewer customers over which to spread across a number of key areas, the the fixed costs of entering the Territory’s increased availability of energy products market compared to most other and innovative pricing. jurisdictions in Australia. The AEMC also
14 ACT SUSTAINABLE ENERGY POLICY Support for low-income Other sources of support for low-income households households include the following:
The ACT Government is conscious that • The ACT Government Concessions there are members of the community Portal is an internet-based, who have difficulties meeting their one-stop information service energy bills. The ACT Government detailing concessions offered in considers the best protection the Territory. The ACT Government for consumers is ultimately the has also developed ACTSmart—a development of a competitive market as one-stop-shop for consumers to gain over the long-run this will help to drive information and apply for prices down. ACT Government water and energy efficiency programs and rebates. However, the ACT Government also accepts that there is a clear role to assist • The ACT Civil and Administrative those in financial difficulty. Tribunal promotes the socially equitable supply of energy by dealing As market forces and Government with hardship cases on a case-by-case policies shift energy generation from basis. fossil-based to renewable sources of energy, the price of energy is expected • The Government also recently to increase. Minimising the impact concluded a trial for the delivery of these cost pressures is a critical of direct assistance to low-income element of the Sustainable Energy households with energy efficient Policy, especially through measures that appliances delivered through assist the community to reduce energy community organisations such as the consumption and therefore energy bills. YWCA, the Salvation Army, St Vincent de Paul, Belconnen Community A review of concession arrangements Services and Communities at to ensure vulnerable customers are Work. The findings of this trial are supported has been completed. The currently being considered for the improved concession arrangements development and implementation provide significant assistance of such a scheme on a wider basis. for vulnerable customers. In the In its 2011-12 Budget, the ACT 2010-11 Budget, the ACT Government Government significantly expanded announced a significant increase in the Outreach Program, to help low the Energy Concession available to income households to improve their consumers who hold a Centrelink energy and water efficiency through Pensioner Concession Card, Centrelink education and retro-fit measures. Health Care Card or Veterans’ Affairs Pensioner Concession Card. Further, It is the intention of this Policy to the Budget provided for an automatic enhance support for low-income increase to the concession each year households through both market reform in line with CPI. The ACT is the only and direct assistance. jurisdiction to apply an automatic increase mechanism to this type Policies that will enhance energy of payment. In 2010, there were efficiency for low income households approximately 22,000 households in the are explored in relation to Outcome two: ACT receiving the Energy Concession. smarter use of energy.
Funding contained in the 2011-12 Smart meters, smart grids Budget will deliver $8 million over four years to increase the energy Smart meters are meters with added efficiency of public housing dwellings functionality that provide consumers across Canberra and ease cost‐of‐living with greater information about their pressures for tenants in recognition of energy consumption. Smart meters the financial burden posed by utilities’ combined with in-house displays will costs. allow consumers to monitor their energy usage in real time. Based on this additional information, consumers will
ACT SUSTAINABLE ENERGY POLICY 15 have a greater ability to make informed While the cost-effectiveness of smart decisions regarding their energy use, meters is likely to improve over coming and therefore potentially reduce their years as electricity costs increase, consumption. previous studies have indicated that it would not be cost-effective to retrofit Smart meters can also form part smart meters to all households in the ACT. The ACT Government will decide of broader smart grid and load whether to fast-track the roll-out of management applications where utilities smart meters based on a cost-benefit can provide financial incentives for analysis and the outcomes of the current customers to reduce electricity usage at ActewAGL trial and the results of studies times of peak demand so as to further undertaken for the Standing Council of enhance the reliability of electricity Energy and Resources (SCER). networks and reduce requirements for additional investments in network and The ACT will also closely monitor generation infrastructure. developments in relation to smart grids, such as the outcomes of the national Smart Grid/Smart City project.
ACTIONS DELIVERING RELIABLE AND AFFORDABLE ENERGY
MEASURE 1: The ACT will continue to actively promote the development of national energy policy and market frameworks that integrate social, economic and environmental policy objectives and represent the interests of the Territory.
MEASURE 2: A second connection point at Williamsdale in the south of the ACT will increase the security of the ACT’s connection to the National Electricity Market. The connection is under construction and will be completed as soon as practicable.
MEASURE 3: The ACT will consider the removal of the regulated electricity tariff and thereby encourage new and innovative pricing and service arrangements, where sufficient electricity retail competition exists and where this is demonstrated to be in the interests of the ACT community.
MEASURE 4: The ACT Government will implement the National Energy Customer Framework as one of the final steps in the national energy reform process agreed to by the Council of Australian Governments.
MEASURE 5: The ACT will seek to address the impact of rising energy prices on households through ongoing monitoring of the suitability of concession arrangements, indexing concession payments based on changes in the cost of living and by investing in energy efficiency measures that can reduce energy costs for low-income households.
MEASURE 6: The ACT Government will decide whether to fast-track the roll-out of smart meters based on a cost-benefit analysis and the outcomes of the current ActewAGL trial and research and analysis undertaken through the COAG Standing Council of Energy and Resources.
16 ACT SUSTAINABLE ENERGY POLICY OUTCOME TWO: SMARTER USE OF ENERGY
There are significant and increasing • assistance to households; opportunities for Canberrans to reduce their energy-related emissions and • assistance to business and industry; costs through improvements in energy efficiency and fuel switching. • higher energy efficiency standards for homes and buildings; Key energy efficiency opportunities in the Territory include improving the • a nationally-consistent approach efficiency of water heating, lighting, to expand and strengthen energy refrigeration, space heating and cooling, efficiency standards for appliances ventilation improvements and standby and equipment; power savings. Switching from electricity to gas for space and water heating can • addressing potential regulatory result in significant emissions and cost impediments to the take up of savings. innovative demand side initiatives and smart grid technologies; Many energy efficiency measures are cost-effective in their own right, • governments improving the energy although up-front costs can be a efficiency of their own operations; deterrent. In addition to the above and ‘technology solutions’, there are significant opportunities through • vehicle efficiency measures, such behavioural change such as switching off as CO2 emission standards. or avoiding the use of appliances when they are not needed. The ACT will continue its policy of timely implementation of energy Reduced demand for energy as a result efficiency reforms arising from the of efficiency improvements will improve National Partnership Agreement on the reliability of networks through Energy Efficiency. Subject to cost benefit reduced peak loads and potentially analysis and an assessment of their lower energy supply costs by deferring suitability to the ACT’s regulatory and the need for new investment in policy settings. networks and generation capacity. The 2010 Prime Minister’s Task Group Energy efficiency will not only reduce on Energy Efficiency recommended energy consumption, and thereby offset a range of new initiatives to stimulate potential increases in customer bills, a step change in Australia’s energy but it can also create clean economy efficiency improvement. The job opportunities for those involved in Commonwealth’s response to the Task delivering required energy efficiency Group’s recommendations will provide services. important context for ACT energy efficiency initiatives over the term The national policy context of this Policy.
Energy efficiency policies and programs To facilitate increased efficiency in are coordinated at a national level under office buildings across the Territory the National Framework for Energy the ACT Government is participating Efficiency. in the National Green Leasing Policy. This is a COAG initiative that aims to In 2009, COAG signed the National increase energy efficiency in commercial Partnership Agreement on Energy buildings by establishing minimum Efficiency, which will deliver a nationally- standards for offices leased to Australian consistent and cooperative approach to Governments from the private sector. energy efficiency encompassing:
ACT SUSTAINABLE ENERGY POLICY 17 In addition, the ACT Government is Such schemes work by placing an actively involved in the development obligation on energy businesses to of the National Framework for assist consumers in achieving reductions Sustainable Government Office in emissions through undertaking Buildings. The Framework establishes a approved measures. Approved range of initiatives that the Australian, measures may include activities such state and territory governments will as replacing inefficient appliances such pursue to drive a national approach to as old fridges, improving insulation, improving the sustainability of office investing in technologies such as solar buildings and the built environment. hot water systems and more energy efficient lighting. A target for non-renewable energy use These energy savings schemes recognise that: The Prime Minister’s Task Group on Energy Efficiency proposed a national • energy efficiency is one of the target for energy efficiency. The Task cheapest ways of reducing Group’s report notes that energy greenhouse gas emissions; efficiency targets provide an overarching vision for energy efficiency by • energy efficiency helps insulate aggregating the expected outcomes of consumers from future energy individual energy efficiency policies into price rises; a single, easily communicated target. • energy efficiency can result in ‘public The ACT’s Climate Change and goods’ such as reduced financial stress Greenhouse Gas Reduction Act for low-income households, increased 2010 establishes a legislative basis business productivity, and reduced for the development of a target for pressure on capacityconstrained per capita usage of non-renewable energy distribution networks; electricity. A final target for non-renewable energy usage will be • energy efficiency creates clean developed following the finalisation economy jobs; and of Action Plan 2. • a range of well-understood market The ACT will work to support the failures exist that limit the uptake development of national energy of cost-effective energy efficiency efficiency improvement measures opportunities, even in a carbon- while recognising that energy efficiency constrained economy. targets for the ACT may be more ambitious, reflecting the affordability The 2010 Prime Minister’s Task Group objectives of this Policy and the on Energy Efficiency Report proposed Territory’s greenhouse gas reduction a national energy savings initiative and targets of a 40 per cent from 1990 levels noted that this could form the basis by 2020, 80 per cent from 1990 levels by for a step change in Australia’s energy 2050 and carbon neutrality by 2060. efficiency improvement. It would aim to replace the different existing and A new energy savings planned state-based schemes. The initiative ACT will work closely with the other The ACT Government will, subject Australian governments to develop to a regulatory impact assessment, a nationally consistent scheme that implement an ambitious new initiative also recognises the different objectives to require energy businesses to pursue and priorities of each jurisdiction. energy efficiency measures in the ACT. The scheme will be similar to those The ACT energy savings initiative will successfully demonstrated in the United include a strong focus on providing Kingdom, South Australia, Victoria and support to low-income households NSW, and that under consideration by although this will not preclude all the Commonwealth Government. household consumers accessing the scheme. The scheme will be funded by energy users and will stimulate the
18 ACT SUSTAINABLE ENERGY POLICY broad-scale energy efficiency retrofitting The ACT was the first jurisdiction to of homes and small to medium sized implement new energy efficiency businesses across the Territory. standards for all buildings, including a minimum performance standard A further focus of the initiative will be to of the equivalent of a 6 star energy provide effective integrated assistance rating for new detached dwellings. The to households and small businesses ACT also has a long running program for struggling with expected rises in energy the mandatory disclosure of residential costs. The ACT’s energy savings initiative energy efficiency ratings at the time will provide an opportunity to bring of sale. Other jurisdictions are currently together a number of sustainability in various stages of implementing support schemes, that include energy these reforms. Moreover, the efficiency initiatives, under a common ACT Government will also continue framework. These programs include: to work with industry to encourage designers and practitioners in the • Home Energy Advice Team (HEAT); construction sector to exceed minimum sustainability standards. • HEAT energy audits and rebates; Building on our leadership to date, • Water and Energy Savings in the the ACT Government will continue Territory (WEST); to advocate for effective national standards for buildings and building • WEST Plus; services through various national forums including the Building Ministers’ Forum • Outreach programs; and and the COAG Select Council on Climate Change in relation to the National • CitySwitch Green Office. Partnership Agreement of Energy Efficiency. This includes standards Over time, the Government will further for renovations and alterations to consolidate and integrate energy buildings as well as those focusing on efficiency and social support programs new buildings. The ACT Government across all Government agencies. will advance its building and planning policies in a manner consistent with our It is envisaged that the scheme will Weathering the Change strategy and commence in 2012 and be reviewed in Sustainable Energy Policy objectives. 2014 with regard to complementarity and integration with national or other Continued improvement in jurisdictional schemes. appliance and equipment energy efficiency Improved building and planning regulations The ACT will continue to support the improvement of the energy Building and planning regulations have a performance of appliances and central role to play helping the Territory equipment through measures such meet its medium to long term climate as the Minimum Energy Performance change and energy reduction objectives. Standards (MEPS) program and labelling requirements for electrical and gas Sustainable building design practices will appliances. Over time MEPS will expand make a large contribution to reduced to cover a greater range of equipment life cycle energy consumption and and appliances as well as those using emissions and building operating costs. non-traditional fuel sources. This Sustainable planning will contribute to will limit the availability of inefficient a more compact city with a reduced products for sale in the Territory. reliance on fossil fuels used in passenger Minimum standards will also be transportation. Improved building and complemented by standards to improve planning regulations and initiatives that the efficiency of appliances installed provide opportunities for cost-effective in certain situations such as new or emissions reductions will continue to be renovated buildings or replacement implemented. appliances.
ACT SUSTAINABLE ENERGY POLICY 19 Transport for a low-carbon city Electric vehicles The new Transport for Canberra policy The ACT, along with Copenhagen and —an updated and replacement for the Tel Aviv, has been selected as a site for 2004 Sustainable Transport Plan—will the roll-out of electric vehicle support include policy measures and actions infrastructure. The infrastructure will to reduce energy use in transport, include battery change-over facilities based on reducing travel demand (e.g. as well as plug-in arrangements. The encouraging walking, cycling, public roll-out of this infrastructure, with the transport, carpooling) and increasing ACT Government providing planning vehicle efficiency (light and heavy and regulatory assistance, will see the vehicles). Transport for Canberra will ACT at the forefront of the global shift align with other Government policies to electric vehicles. Further, the on land use and the environment, and ACT Government will introduce electric will be released by the fourth quarter vehicles into the ACT fleet from 2012. of 2011. All electric vehicles used by the ACT Government will be powered Transport for Canberra will include by 100 per cent GreenPower. updated targets to ensure that at least 30 per cent of journeys to work will Travel demand management be made using sustainable modes Both ‘push’ and ‘pull’ measures can be by 2026 (public transport, cycling or used to encourage more people to use walking), reducing the ACT’s reliance public transport, cycling and walking on fossil fuels and decreasing transport in Canberra. Through the Transport for emissions. It will include demand Canberra policy, the Government will management measures to encourage continue to implement travel demand more efficient travel, supportive land management in the coming years, use planning and infrastructure to including: make the sustainable and healthy travel options the easy choices, and measures • constructing transit priority lanes, to make the vehicles we drive more new bus stations and stops, and efficient. investigating mass rapid transit options like light rail for the Low-emission vehicles Gungahlin to City corridor (including The ACT Government will actively Northbourne Avenue); support the shift to low-emission • expanding the network of park and (and eventually zero emission) vehicles, ride and bike and ride facilities; and has already introduced Australia’s first Green Vehicles stamp duty scheme • parking zone and pricing adjustments; based on vehicle environmental and performance. In 2011-12, the • improving transport information, ACT Government will review the existing marketing and promotion, including Green Vehicles scheme to assess how Real Time Passenger Information, new it could be strengthened to encourage smartcard ticketing, and online trip people to choose the cleanest, most planning tools. efficient vehicle that meets their needs. New pricing and regulatory initiatives Transport and land-use will also be explored through a Transport integration Pricing study in 2011-12. Opportunities Integration of transport planning at the for reduced fuel consumption from beginning of the planning process allows ‘eco-driving’ will also be investigated. for a lower carbon emission urban form to be designed, maximising access for pedestrians, cyclists and public transport and encouraging these transport modes from the beginning. The Government is
20 ACT SUSTAINABLE ENERGY POLICY also committed to a more compact city MEASURES DELIVERING THE SMARTER USE OF ENERGY form, which will be further highlighted in the new ACT Planning Strategy being MEASURE 7: The ACT will continue its policy of timely implementation of energy developed alongside Transport for efficiency reforms arising from the National Partnership Agreement Canberra. on Energy Efficiency, where they are suited to the ACT. The ACT will also consider exceeding the minimum standards and other goals set The land release program (commercial, through national process where appropriate. industrial and residential) over the MEASURE 8: The ACT will establish a target for the per capita usage of period of this Policy will potentially non-renewable electricity. have a significant impact on the transport network. The Government MEASURE 9: The ACT will, subject to a regulatory impact assessment, establish will undertake transport modelling a new ambitious energy savings initiative, funded by energy users, each year to support optimisation of providing support to low-income households and stimulating the transport infrastructure and undertake broad-scale energy efficiency improvements of homes and small cost-benefit analyses of supportive businesses across the Territory. infrastructure for new developments MEASURE 10: The Government will seek further consolidation and integration of across the city. energy efficiency and social support programs across all Government Government leading agencies. by example MEASURE 11: Building on our leadership to date, the ACT Government will continue The National Partnership Agreement to advocate for effective national standards for buildings and building on Energy Efficiency commits services through various national forums including the Building Commonwealth, state and territory Ministers’ Forum and the COAG Standing Council on Energy and governments to demonstrating clear Resources in relation to the National Partnership Agreement of Energy leadership through the energy efficiency Efficiency. The ACT Government will advance its building and planning of their own operations. policies in a manner consistent with its Sustainable Energy Policy objectives. The ACT Government will lead by example by achieving carbon neutrality MEASURE 12: The ACT Government will continue to support the improvement of the in its own operations by 2020. energy performance of appliances and equipment through measures such as the Minimum Energy Performance Standards (MEPS) program The ACT Government currently sources and labelling requirements for electrical and gas appliances. around 32 per cent of its electricity needs from renewable sources. MEASURE 13: The new Transport for Canberra policy will include policy measures The ACT Government has also been and actions to reduce energy use in transport, based on reducing working towards upgrading the energy travel demand (e.g. encouraging walking, cycling, public transport, performance of its offices, schools, carpooling) and increasing vehicle efficiency (light and heavy vehicles). public housing and street lighting MEASURE 14: The ACT Government will review the existing Green Vehicles duty and is assessing the construction of a scheme and consider how it would more effectively encourage less benchmark green office building for its energy intensive vehicle purchases, and will explore new pricing own use. and regulatory initiatives to encourage a transition to low emission The ACT Government is developing vehicles in a transport pricing study in 2011–12. strategies and actions to improve energy MEASURE 15: The ACT Government will support the roll-out of electric vehicle efficiency and increase use of renewable support infrastructure through the provision of enabling assistance energy across ACT Government and will introduce electric vehicles into the ACT Government fleet in operations and services, from office- 2012-13. based policy and program delivery, to schools and hospitals through to MEASURE 16: The Government will undertake transport modelling each year municipal services such as street lighting to support the optimisation of transport infrastructure and and waste collection. undertake cost benefit analyses of supportive infrastructure for new developments across the city. The Government will continue to work towards best practice in both energy MEASURE 17: The Government will continue to work towards best practice in both management for its own operations to energy management for its own operations and in its carbon neutrality reduce its operational costs and in its objective through the development of an ACT Government Carbon carbonneutrality objective through the Neutral Framework. development of an ACT Government Carbon Neutral Framework.
ACT SUSTAINABLE ENERGY POLICY 21 OUTCOME THREE: CLEANER ENERGY
The national policy context Nationally, in 2007-08 only around 7 per cent of electricity generation The ACT imports over 99 per cent of its came from renewable sources such electricity from NSW and the broader as hydro, wind and biomass. The National Electricity Market (NEM). This contribution of renewable energy will electricity is primarily sourced from coal increase nationally as a result of the and gas thermal generators in NSW and Commonwealth renewable energy Victoria. targets as well as GreenPower purchases by households, governments and the business community.
FIGURE 6: AUSTRALIAN ELECTRICITY GENERATION BY FUEL, 2007–083
Black coal
Brown coal
Gas
Oil
Hydro
Wind
Biomass, biogas
The Commonwealth’s Large-scale a high priority for the ACT given that Renewable Energy Target (LRET) applies over 99 per cent of the ACT’s electricity to commercial scale generation systems is imported from the NEM. while the Small-scale Renewable Energy Scheme (SRES) supports smallerscale The ACT Minister for Energy is a systems such as roof-top photovoltaic member of the COAG Standing Council units and solar water heaters. For the on Energy and Resources (formerly the ACT, these measures will: Ministerial Council on Energy). Through this forum, the ACT will continue to • provide financial support for new actively promote the development renewable energy generation of national energy policy and market projects; frameworks that integrate social, economic and environmental policy • increase energy prices as the objectives, including in support of additional costs associated with renewable and low-carbon distributed renewable energy are passed through energy technologies. to energy users; and A renewable energy target • reduce the emissions intensity of the The ACT does not have substantial electricity we import. natural renewable energy resource advantages, such as wind, solar or The ACT has opportunities to drive geothermal resource availability, that cleaner generation technology, such as would allow us to be marketcompetitive wind and solar, through national energy in large-scale renewable power market reforms as well as ACT-specific generation in the national market. policies such as Feed-in Tariff schemes. However, the ACT can support Driving change through the national cost-effective renewable energy energy market reforms process is
3 Energy in Australia, 2010
22 ACT SUSTAINABLE ENERGY POLICY projects through the purchase of The ACT Government recognises renewable energy through the GreenPower as a national standard for national GreenPower scheme and accrediting renewable energy products the deployment of smaller scale sold to Australian electricity customers. technologies such as roof-top solar. Buying GreenPower is one of the Under the Climate Change and most cost-effective ways of reducing Greenhouse Gas Reduction Act emissions from electricity production. 2010 the ACT has established targets As of 1 April 2009, the first offer to any for renewable electricity usage in new or reconnecting ACT electricity the Territory. Our renewable energy customer must be an accredited target provides a focus for policies that GreenPower product. Customers can support renewable energy and reflects choose to accept, refuse, increase or the important contribution that the decrease the GreenPower component increased use of renewable energy will ranging from 10 per cent to 100 per cent make to our emission reduction targets. of their total electricity needs.
The ACT’s performance against our The ACT Government will continue renewable energy targets will be to monitor and encourage the uptake monitored through the ACT Greenhouse of accredited GreenPower products Gas Inventory. The finalisation of Climate within the Territory, and work towards Change Action Plan 2 will provide an enhancing the standing of GreenPower opportunity to consider an expansion to products through the National targets for renewable energy use in the GreenPower Steering Committee. Territory. Specific initiatives to stimulate the A price on carbon further uptake of GreenPower in the Territory will be investigated as part A national price on carbon will drive of the pathway to achieve the ACT’s down the emissions intensity of legislated greenhouse gas reduction electricity imports by encouraging targets. investment in new low carbon gas generation systems and reductions in Cogeneration and the emissions from existing generation trigeneration assets. Distributed generation refers to The ACT is supportive of and electricity generated close to where will continue to advocate for it is used and connected directly to Commonwealth Government initiatives the distribution network. It has the to put a price on carbon as an potential to reduce costs associated economically efficient way of promoting with transmission including line losses energy efficiency and decarbonising the and network investment. In addition, by NEM. The ACT Government will also increasing the utilisation of the primary advocate for the interests of lowincome energy source (eg, natural gas) through households in the ACT community cogeneration (electricity and heat) to ensure adequate compensation is and trigeneration (electricity, heat and provided for resulting energy price cooling), it can reduce emissions and impacts. energy bills.
GreenPower The ACT Government will assess the feasibility of including co/trigeneration GreenPower is government-accredited, technology in upcoming major emissions-free renewable energy developments such as the proposed purchased by energy retailers from upgrade of Canberra Hospital and the accredited renewable energy sources. Braddon-Reid redevelopment.
ACT SUSTAINABLE ENERGY POLICY 23 These generation technologies are Australia over the medium to long term likely to be most applicable on larger as we move to less greenhouse-gas- scales (eg, hospitals, data centres, intensive energy sources while ensuring commercial buildings, apartment blocks our energy requirements are met. Life and new suburb level developments). cycle emissions from gas-fired power Integration into a new building allows stations may also reduce over coming for appropriate planning and avoids years as natural gas is replaced with potentially significant costs associated alternatives such as biogas. with retrofitting. Public consultation on Climate Change A requirement that all major Action Plan 2 will provide an opportunity ACT residential and commercial to engage with the community on the development and construction projects costs and benefits of low-emission include a detailed assessment of the generation technologies in the context benefits and viability of distributed of meeting the Territory’s greenhouse generation options would increase gas reduction targets. the awareness of these generation technologies and the potential for Encouraging solar generation their deployment in the ACT. Such a The ACT introduced the most generous requirement will be considered as part Feed-in Tariff (FiT) scheme in Australia of the Government’s ongoing review of on 1 March 2009. The FiT was aimed planning and environmental approval at householders and small businesses processes in the Territory. Barriers to the and was available for solar and wind further uptake of distributed generation generation. Eligible generators received in private developments will also be a premium tariff for all of the electricity investigated. produced.
Greater deployment of distributed The FiT increased the volume of renewable electricity in the network generation technologies will be an and therefore decreased emissions. The important contributor to achieving small renewable generators throughout the ACT’s legislated greenhouse gas the ACT are highly visible and raise reduction targets. awareness in the community of the need to switch to more renewable Large-scale, low-emission energy sources. The ACT Government generation capacity is also extending the FiT scheme to larger users. The ACT has the infrastructure to support gas-fired electricity generation, In February 2011, the ACT either on a large-scale or as small units Government passed legislation with distributed throughout Canberra. the following features: Gas-fired power stations produce considerably fewer emissions for the • introduction and capping of a same amount of electricity generated new mediumscale generation than a traditional coal-fired power category for generators between station. Gas-fired power stations 30kW and 200kW (capped at 15MW); currently also produce power at lower prices and in a more predictable and • capping of existing microgeneration category (household roof top) up to flexible manner than renewable energy 30kW (capped at 15MW); and sources such as solar or wind. Gas-fired power generation complements solar • extension of eligibility to incorporated and wind generation capacity by acting not-for-profit community groups. as a back-up source of energy during times of low sunlight and wind. The Micro and Medium Generator categories of the Scheme were filled and Gas-fired power stations have an closed on 13 July 2011. However, further important transitional role to play in legislation establishing a large generator
24 ACT SUSTAINABLE ENERGY POLICY category will be introduced in late generation. Generation capacity 2011. The release of the first tranche is expected to reduce over time of the large scale generation category in line with natural reductions in is expected to occur in early 2012, methane production at these sites. under which up to 40MW will be made available through an auction process to The draft Sustainable Waste Strategy ensure the lowest possible prices. 2010-25 was released in December 2010 and provides a pathway to recover Integration of waste and organic wastes currently sent to landfill, energy policies thereby largely eliminating emissions from landfill. By recovering and recycling Modern technologies offer possibilities wastes the strategy reduces the energy to transform municipal wastes into use and emissions associated with renewable electricity. the production of the material in the waste stream, such as glass, metals and This is already occurring at the Mugga plastics. Lane Resource Management Centre and Belconnen where methane is captured Where it provides the highest value use, and currently used to generate around a portion of the sorted wastes may be 24,000-28,000MWh of electricity diverted to a proposed energy-from- each year. This reduces the ACT’s waste facility to generate electricity, overall emissions by converting the heating or cooling as well as producing methane to electricity and displacing valuable by-products such as biochar. other forms of non-renewable power
MEASURES DELIVERING CLEANER ENERGY
MEASURE 18: The ACT will continue to actively promote the development of national energy policy and market frameworks that integrate social, economic and environmental policy objectives, including in support of renewable and low-carbon distributed energy technologies.
MEASURE 19: The ACT will continue to support a national carbon pricing regime as an economically efficient way of decarbonising our electricity supplies.
MEASURE 20: The ACT Government will continue to encourage the uptake of accredited GreenPower products within the Territory, and work towards enhancing the standing of GreenPower products through the National GreenPower Steering Committee.
MEASURE 21: A target for renewable energy usage has been set in legislation under the Climate Change and Greenhouse Gas Reduction Act 2010 and this target will be reviewed following the finalisation of Action Plan 2.
MEASURE 22: The ACT Government will assess the feasibility of including distributed generation technology in upcoming major developments such as the proposed upgrade of Canberra Hospital and the Braddon-Reid redevelopment. The ACT Government will propose specific measures to encourage a greater awareness and deployment of distributed generation options including cogeneration, trigeneration and large scale, low emissions generation technologies.
MEASURE 23: Legislation in support of a large-scale FiT will be introduced in 2011. A first tranche of up to 40MW will be made available through an auction process to ensure the lowest possible prices.
MEASURE 24: Options to create energy from waste, including through trialling of energy from waste technologies will be investigated.
ACT SUSTAINABLE ENERGY POLICY 25 OUTCOME FOUR: GROWTH IN THE CLEAN ECONOMY
Support innovative local The ACT Government will continue businesses to support business development opportunities for locally-based clean Climate change and an increased focus economy businesses. on renewable, energy-efficient and low-emission energy technologies will This support will include: create significant opportunities for the • development and promotion of development of new businesses and local companies and local research industries and associated employment capability; prospects within the Territory and surrounding region. • identifying opportunities for collaboration between local A clean economy, or low-carbon companies and local research economy, can be defined as one in which organisations; jobs are characterised as being: • leveraging Australian Government • entirely new and created in response ‘clean tech’ industry development to an identifiable new clean (ie, programs to benefit ACT companies; low-carbon) technology initiative; or and • an infusion of clean practices within • harnessing skills development existing jobs (changing the way programs to support clean technology we do things to make them more businesses. sustainable). The key objective is to provide a The success of the ACT Government’s business program environment which FIT contributed to the creation of an will allow clean technology businesses estimated 200 new jobs such as solar to access general advisory support panel installers. Ensuring the long-term and assistance and maximise growth sustainability of these and other clean opportunities. economy industries will support the growth of green businesses in the ACT Skills for a clean economy and their capacity to venture into other Progress on clean energy and energy markets. efficiency can be hampered by capacity constraints and skill gaps in the The ACT Government, through the economy. This is recognised through the Economic Development Directorate, development of two COAG mechanisms: delivers a range of business programs to support the growth and development of • The Green Skills Agreement, which local companies. These programs have sets out the strategic framework for a focus on the small and microbusiness building the capacity of the vocational sectors operating in the Territory. education and training and higher The implementation of a broad-based education sectors to meet the needs ACT energy savings initiative will build of Australian businesses in the on existing capacities in energy, transition to a low-carbon economy; consulting and trades sectors and and support the development of enhanced skills for a new workforce. Along with • The National Partnership Agreement an infusion of capital supporting these on Energy Efficiency, which commits activities, this initiative offers the all jurisdictions to supporting the opportunity for Canberra to create a development of skills and education new sustainable industry delivering programs to ensure that Australia’s a broad range of social, economic workforce is trained and fully engaged and environmental benefits to the to achieve Australia’s energy efficiency community and providing ongoing potential. support through our transition to a low-carbon economy.
26 ACT SUSTAINABLE ENERGY POLICY The ACT will continue to support Clean Technology Business Development national and local approaches to Strategy. The Strategy and its associated skills development that reduce cost initiatives are intended to form a part and delays in the transition to a clean of the ACT Government’s overarching economy, create new employment sustainability framework policy, opportunities, and enhance the skill Weathering the Change—ACT climate base of workers to provide services that change strategy. support better energy performance. This will build on strong foundations that ACT ACIL Tasman interviewed 20 ACT training providers have laid in training clean technology organisations, for new skills and technologies. including large, small and medium sized companies and five research The ACT Government also recognises organisations. The information gained that many of the skills needed for the through these interviews has been clean economy will be found in existing used to prepare an up-to-date directory trades and professions such as those of clean technology capability in the in the construction, electrical and gas- ACT, both in the industry and research fitting fields. It is therefore important sectors. that skills for the clean economy are included in standard training and The strong research and educational regulatory frameworks for all workers capacity in clean technology located in in relevant occupations. the ACT positions the Territory well to provide the services that help meet the ACT Government’s clean research, education and training needs technology business of not only the ACT but also the region development strategy and beyond. The ACT Government in May 2011 The Economic Development Directorate commissioned ACIL Tasman to survey also delivers the Industry Capability the ACT’s clean technology industry Network (ICN) in the ACT linking projects and the ACT research capability that and opportunities to capable suppliers. supports that industry. The information The ICN has dedicated resources to the collected provides the ACT Government clean technology sector and administers with a better understanding of current a clean technology directory that lists industry capabilities and the existing projects and opportunities within the R&D landscape for clean technology sector. in the ACT. This will in turn help guide the development of the Government’s
MEASURES DELIVERING GROWTH IN THE CLEAN ECONOMY
MEASURE 25: The ACT Government will continue to support capability development in ACT companies that are developing clean technology products or services and creating sustainable businesses.
MEASURE 26: The ACT will continue to support national approaches to skills development that reduce cost and delays in the transition to a clean economy and create new employment opportunities, especially building the skill base of workers to succeed in the clean technology economy.
MEASURE 27: The ACT Government is undertaking work to identify local business and research capability in the emerging clean technology sectors. This will be used to inform business policy and program design to support the development of future growth sectors in clean technology.
ACT SUSTAINABLE ENERGY POLICY 27