Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme During 2010 Report to Minister

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 Report to Minister

NSW Greenhouse Gas Reduction Scheme July 2011

© Independent Pricing and Regulatory Tribunal of New South Wales 2011 This work is copyright. The Copyright Act 1968 permits fair dealing for study, research, news reporting, criticism and review. Selected passages, tables or diagrams may be reproduced for such purposes provided acknowledgement of the source is included.

ISBN 978-1-921929-27-4 CP61

Inquiries regarding this document should be directed to a staff member: Margaret Sniffin (02) 9290 8486

Independent Pricing and Regulatory Tribunal of New South Wales PO Box Q290, QVB Post Office NSW 1230 Level 8, 1 Market Street, Sydney NSW 2000 T (02) 9290 8400 F (02) 9290 2061 www.ipart.nsw.gov.au

ii IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

Contents

Foreword 1

1 Executive summary 3 1.1 What is GGAS? 3 1.2 What is IPART’s role? 4 1.3 NSW Benchmark Participants’ compliance 5 1.4 Abatement Certificate Providers’ compliance 5 1.5 Audit activities 6 1.6 Registration, ownership and surrender of certificates 6 1.7 Projected supply of and demand for certificates in coming years 7 1.8 What does the rest of this report cover? 7

2 Developments in GGAS during 2010 8 2.1 Changes to the GGAS Rules 8 2.2 Closure of GGAS to new participants 9 2.3 Cessation of Category A Generating systems 10 2.4 IPART internal review of GGAS 10 2.5 Inter-department review of GGAS 10 2.6 GGAS in the national climate policy context 12

3 NSW Benchmark Participants’ compliance performance 14 3.1 Summary of Benchmark Participants’ compliance performance in 2010 16 3.2 Number of abatement and Renewable Energy Certificates surrendered 17 3.3 Types of abatement certificates surrendered 22 3.4 Greenhouse shortfalls carried forward 22 3.5 Greenhouse Gas penalties 23

4 Abatement Certificate Providers’ compliance performance 24 4.1 Summary of Abatement Certificate Providers’ compliance performance and key accreditation statistics 24 4.2 Compliance outcomes 25 4.3 Accreditations approved in 2010 28 4.4 Accreditations amended in 2010 30 4.5 Accreditations cancelled in 2010 30 4.6 Accreditations remaining at the end of 2010, by rule 31

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART iii

Contents

5 Audit activity 35 5.1 Summary of audit activity 35 5.2 Audit and technical services panel 36 5.3 Selection and management of auditors 37

6 GGAS Registry – registration, ownership and surrender of certificates 40 6.1 What is the Registry? 40 6.2 Trends certificate registration 41 6.3 Certificates surrendered 45 6.4 Certificates voluntarily surrendered 46 6.5 Certificate transfers 46

7 Supply and demand for certificates 48 7.1 Developments in 2010 that may influence future supply and demand 49 7.2 Assumptions we used in projecting supply and demand for certificates 53 7.3 Scenarios for which we projected supply and demand for certificates 56 7.4 Results of our projections for supply and demand from 2011 to 2014 56 7.5 Projected values for the NSW Pool Coefficient 60

Appendices 65 A Overview of GGAS 67 B Categories of the Generation Rule 80 C Registry data 83

Glossary 125

iv IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

Foreword

On 10 July 2011 the Commonwealth Government announced its proposals for a national carbon price and emissions trading scheme. While termination of GGAS is a matter for the NSW Government, most participants expect GGAS to close soon after the commencement of an equivalent national scheme if this occurs. Hence, it is timely to reflect on the achievements of GGAS and the implications of its possible closure.

GGAS commenced operation in 2003 and was the world’s first mandatory carbon trading scheme. It replaced a previous ineffective licence condition that required retailers to have a plan to reduce emissions without any requirements to demonstrate that the plan was implemented or achieved any reductions in emissions.

GGAS has shown that a carbon trading scheme can be successful at modest cost and without a large bureaucracy. In 2010 a team of around 12 staff (full-time equivalents) were responsible for the administration of both GGAS and ESS. One of the critical issues for GGAS has been measurement of the reduction in carbon emissions. We have drawn upon existing models but also developed and enhanced new approaches such as dealing with uncertainties associated with measuring the energy content of waste gases, especially landfill gas. It has been pleasing to see that some of the measurement frameworks developed under GGAS have been adopted by other schemes, including international schemes operating under the Kyoto protocol.

In their recent reviews of emissions reduction policies in Australia, both the Productivity Commission (PC) and the Grattan Institute found that GGAS has the lowest total cost to society per tonne of emissions abated at $5 and $15 to $40, respectively. This variation in the estimates of the costs highlights the uncertainties in the modelling.

Another indication of the achievement of GGAS comes from examining its practical impact on specific projects. One example is TRUenergy’s 400 MW combined-cycle gas plant at Tallawarra that generates energy with lower emissions than conventional coal-fired plants. While this plant may have proceeded without GGAS, TRUenergy made it clear in their submissions to government that the income from the sale of certificates under GGAS was an important factor in their decision to proceed when they did. Another example is the strong growth in projects that capture waste methane gas and use this to generate electricity. Many of these projects use methane gas from waste landfills. Advisors who have evaluated these

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 1

Foreword

projects have indicated that the income from the sale of certificates was of critical importance for the decision to proceed with these projects.

GGAS also attracted public attention. In 8 years of operation, members of the public have voluntarily surrendered approximately 1.2 million certificates. This volume suggests GGAS had become a useful mechanism for public participation in emissions reduction.

This abatement has been achieved without significant increases in the cost of electricity, which is both a strength and weakness of GGAS. For a given carbon price, GGAS provides the same incentives to switch to relatively lower emission generation as the proposed national carbon trading scheme but without any significant increase in retail prices. However, this is also a weakness. It means that the costs of emissions are not signalled to the users of energy and the potential impacts on energy consumption (as opposed to generation) are lost.

If GGAS is closed, we would seek to ensure an orderly approach is followed that maintains the integrity of the scheme. We are concerned about the potential for invalid creation of certificates in the final stages of GGAS that may not be recovered subsequently. For this reason we intend to monitor the patterns of certificate creation in 2011 and 2012 more closely and critically review requests for increased annual limits on certificate creation.

In 2010 we commenced amending the accreditation conditions for all certificate providers to require the commissioning of an audit three months prior to the closure of the scheme. These audits will establish whether certificates have been created in accordance with the legislation and represent valid abatement. Furthermore we will start working with the members of our audit panel to discuss the practical challenge of ensuring that these audits are completed promptly to minimise the risks for the Scheme and its participants.

If GGAS were to continue beyond 2012, the ongoing surplus of certificates that is suppressing the trading price will need to be addressed. We have suggested to government that, if GGAS continues, it should consider reducing the emission targets and removing the recognition of Renewable Energy Certificates (RECs) from the scheme. Currently RECs are double counted because retailers can claim credit under GGAS for RECs surrendered to the Commonwealth under their national renewable energy obligations.

At this critical point in the history of GGAS, I would like to thank the current and past team members who have shaped GGAS and contributed to its significant achievements. In particular, I would like to thank the current General Manager, Margaret Sniffin. I would also like to thank my colleagues on the Committee, Peter Egger and Eric Groom, for their counsel and participation in decision making.

James Cox PSM Acting Chairman

2 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

1 Executive summary

As part of our functions as Compliance Regulator and Scheme Administrator for the NSW Greenhouse Gas Reduction Scheme (GGAS), the Independent Pricing and Regulatory Tribunal of NSW (IPART) monitors and reports annually to the Minister for Energy on the scheme participants’ compliance, and other aspects of the scheme’s performance and operation. This report covers the 2010 calendar year, which was the 8th year of operation for GGAS.

1.1 What is GGAS?

GGAS is a mandatory greenhouse gas emissions trading scheme, established under Part 9 of the Electricity Supply Act 1995 (the Act). It commenced in NSW on 1 January 2003 and the Australian Capital Territory on 1 January 2005. It will operate until either a national climate change mitigation scheme is introduced or 2021.

The objectives of GGAS are to reduce greenhouse gas emissions associated with the production and use of electricity, and develop and encourage the reduction of emissions from non-electricity-related activities. To achieve this objective, the Act establishes annual state-wide benchmarks for the reduction of greenhouse gas emissions, and:

 Obliges all NSW and ACT electricity retail suppliers and certain other parties to meet individual benchmarks that together will meet the state-wide benchmark. These parties are known as Benchmark Participants.

 Provides for large electricity customers1 and parties carrying out State Significant Developments2 to elect to meet an individual benchmark target. These are known elective Benchmark Participants.

1 A large electricity customer is defined as a customer other than a retail supplier, that on its own or together with certain related entities has an electricity load within NSW of over 100GWh per annum at one site or multiple sites owned or occupied by the customers, as long as one of the sites uses over 50GWh per annum. 2 State Significant Development has the same meaning as it has in the Environmental Planning and Assessment Act 1979. At this stage, no State Significant Developments have elected under the Scheme.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 3

1 Executive summary

 Provides for Abatement Certificate Providers to be accredited to carry out greenhouse gas abatement projects that are eligible under one of the GGAS Rules, and to create abatement certificates in respect of these projects. Each certificate represents one tonne of carbon dioxide equivalent emissions. These certificates include: – NSW Greenhouse Abatement Certificates (NGACs), which are tradeable certificates – Large User Abatement Certificates (LUACs), which are non-tradable.3

Benchmark Participants comply with their GGAS obligations primarily by purchasing and surrendering NGACs, or by creating and surrendering LUACs. They can also claim credit for a limited number of RECs surrendered under the Australian Government’s Renewable Energy Target (RET) Scheme in relation to electricity purchases associated with NSW.4

GGAS benchmarks are set on a per capita basis. Since 2007, the benchmark has been

constant at 7.27 tonnes of carbon dioxide equivalent (tCO2-e) of greenhouse gas emissions per capita in NSW. The benchmark progressively decreased to this per capita level from 8.65 tCO2-e when GGAS commenced in 2003. Unless legislative amendments are made to reduce the target, it will remain at this level until GGAS terminates.

1.2 What is IPART’s role?

As noted above, IPART is both Scheme Administrator and Compliance Regulator of GGAS. As part of these roles, we:

 monitor and report on Benchmark Participants’ compliance with their obligations

 accredit Abatement Certificate Providers to undertake abatement projects that are eligible under the GGAS Rules and create certificates in respect of these projects

 monitor and report on Abatement Certificate Providers’ compliance with the conditions of their accreditation and the GGAS Rules

 conduct independent audits to assure the integrity of the scheme

 track the registration, ownership and surrender of certificates through the GGAS Registry5

 monitor and publish annual reports on the supply of and demand for certificates.

3 As LUACs are non-tradeable, they can only be created by Abatement Certificate Providers that are also elective Benchmark Participants. 4 A renewable energy certificate may be counted towards meeting the greenhouse gas benchmark, or to abate a greenhouse gas shortfall, if certain criteria are satisfied pursuant to clauses 73DA and 73DB of the Electricity Supply (General) Regulation 2001. 5 See https://www.ggas-registry.nsw.gov.au

4 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

1 Executive summary

We also host the website for GGAS, which can be found at www.greenhousegas.nsw.gov.au.

Under the Act, IPART may, with the approval of the Minister, delegate the exercise of its functions as Scheme Administrator and Compliance Regulator to another person or body. We have chosen to delegate these functions to a GGAS Committee. For the 2010 calendar year, this committee comprised Mr James Cox as full-time IPART Member, and Mr Peter Egger and Mr Eric Groom as committee members. The GGAS Committee met a total of 13 times in 2010.

1.3 NSW Benchmark Participants’ compliance

During the 2010 compliance year, there were 40 Benchmark Participants in GGAS, of which 11 were elective Benchmark Participants. Together, they surrendered approximately 18 million abatement certificates, and carried forward around 4.6% of their combined greenhouse shortfall to 2011. All participants met their compliance obligations except for 2 that failed to surrender certificates to meet their greenhouse gas benchmarks.

Of the certificates surrendered, 16.9 million were NGACs, and 1.3 million were LUACs surrendered by elective Benchmark Participants. In addition, they received credit for approximately 4 million RECs in lieu of surrendering NGACs to meet their benchmarks. This is a 61% increase compared to the 2009 compliance year. RECs represented 17.2% of the total number of abatement certificates required for compliance, which is higher than in 2009 (when they represented 9.7%).

Since GGAS began in 2003, a total of approximately 106 million abatement certificates have been surrendered by Benchmark Participants made up of 100 million NGACs and 5.5 million LUACs. It increases to just over 120 million certificates when RECs counted towards meeting the benchmarks are also taken into account.

1.4 Abatement Certificate Providers’ compliance

Overall, Abatement Certificate Providers’ compliance remained acceptable during 2010. Among the 240 accreditations that were active for all or part of this compliance year, there were 24 instances of minor contraventions to conditions of accreditation and 15 instances of improper creation of certificates, of which 2 were significant. One of the significant improper creation events resulted from the double counting of abatement under the Generation Rule by CS Energy. All non-compliance issues were resolved and where relevant, companies agreed to voluntarily forfeit the required number of certificates.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 5

1 Executive summary

We approved 15 new applications to undertake eligible abatement projects under the GGAS Rules – all of which were received on or before 31 December 2009 (when GGAS was closed to new applications). We also cancelled 68 accreditations, most of which were accredited under the DSA Rule6 and were cancelled when the energy efficiency component of GGAS was transferred to the NSW Energy Savings Scheme (ESS). At the end of 2010, there were 172 Abatement Certificate Providers accredited to create certificates for abatement activity.

1.5 Audit activities

We managed a total of 60 independent audits of Abatement Certificate Providers and their activities in 2010, including:

 certificate creation audits

 pre-accreditation audits

 project implementation audits on generating systems where future projects had been commissioned.

These 60 audits covered a total of 120 accreditations.

We also managed 31 audits of 34 benchmark statements submitted by Benchmark Participants. This represents all benchmark statements submitted, except for those where the participant had nil or very low electricity sales. The audits of benchmark statements for the 2010 compliance year were conducted in March 2011 to meet reporting timeframes for Benchmark Participants.

1.6 Registration, ownership and surrender of certificates

Compared to 2009, there was an increase in Generation Rule certificates created for 2010, however little change in the certificate creation occurred under other rules. As at 30 June 2011, a total of 20.3 million certificates were recorded in the GGAS Registry for abatement activities during 2010, of which 84% were created from generation projects. However, the supply of certificates available for transfer and/or surrender increased slightly. A balance of 20.7 million certificates (of 2003-2010 vintage) was available at 30 June 2011.

Voluntary surrenders of certificates continued in 2010, with 354,008 certificates surrendered in this way. Voluntary surrenders are a means whereby individuals or companies can choose to offset the emissions from their operations by purchasing and then surrendering certificates.

6 Greenhouse Gas Benchmark (Demand Side Abatement) Rule No.3 of 2003.

6 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

1 Executive summary

1.7 Projected supply of and demand for certificates in coming years

We have projected that cumulative certificate supply will continue to exceed certificate demand into the foreseeable future. Some measures were taken to reduce supply, including closing the scheme to new applications for accreditation for new projects, and the cessation of NGAC creation from demand side energy efficiency projects in mid-2009 (due to commencement of the ESS). However, these steps have not had a large effect on supply. The excess supply largely reflects the fact that the NSW Benchmark target has remained static since 2007.

1.8 What does the rest of this report cover?

The rest of this report discusses the compliance with and operation of GGAS during 2010 in detail:

 Chapter 2 outlines developments in GGAS, including changes to the legislation

 Chapters 3 and 4 focus on the performance of Benchmark Participants and Abatement Certificate Providers

 Chapter 5 discusses our auditing activities

 Chapter 6 provides key statistics on the registration, surrender and transfer of certificates recorded in the Registry, and

 Chapter 7 provides possible scenarios for demand and supply of certificates in the coming years.

The appendices provide an overview of GGAS and its key elements, as well as detailed information on Abatement Certificate Providers and certificates registered since 2003, and a glossary of the terms used in this report.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 7

2 Developments in GGAS during 2010

There were a number of developments in GGAS during 2010, including 2 Rule changes. The following sections outline the key developments, which are discussed more fully in subsequent chapters.

2.1 Changes to the GGAS Rules

There are 4 GGAS Rules which set out the eligibility requirements and calculation methods for accreditation. They include the Generation Rule, the Demand Side Abatement (DSA) Rule, the Large User Abatement Certificate (LUAC) Rule and the Carbon Sequestration (CS) Rule (see Appendix A, section A.7 for more information).

In mid-2009, the DSA Rule was amended so it applies only to embedded generation projects. The other energy efficiency projects it covered were transitioned into the ESS or cancelled. In 2010, the Generation Rule and CS Rule were also amended.

2.1.1 Amendment to the Generation Rule

The Generation Rule provides for the creation and calculation of certificates through a range of eligible power generation activities (in NSW and interstate) – including gas fired and fossil fuel fired systems, as well as renewable generation and cogeneration.

In late 2010, this rule was amended to specify very clearly the treatment of eligible generation for certificate creation under GGAS, where a component of that generation has been, or will be, used to create Gas Electricity Certificates (GECs) under the Queensland Gas Scheme.

Prior to amendment, Equation 2 specified the treatment for certificate creation of RECs under the RET Scheme, but not the treatment of GEC creation. Consistent with our interpretation of the provision, general practice had been to treat GEC creation in the same manner as REC creation. However, CS Energy adopted an alternative interpretation that had resulted in invalid certificate creation (see Section 4.2.2).

This invalid certificate creation was caught by the overarching legislation (and the undertaking signed by all generators under GGAS) that prohibits the ‘double counting’ of generation between mandatory greenhouse gas related schemes for the purposes of certificate creation under GGAS.

8 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

2 Developments in GGAS during 2010

The amended Generation Rule was gazetted on 3 September 2010.

2.1.2 Amendment to the CS Rule

The CS Rule allows organisations to create certificates for carbon sequestered in eligible forests in NSW. Following a public consultation process, this rule was amended in May 2010 to provide greater flexibility for Abatement Certificate Providers, and to facilitate the transition of accreditations into a future national emissions trading scheme.

Under the amended rule, Abatement Certificate Providers have 2 options to rectify discrepancies between the number of certificates they have created and their actual carbon stock: 1. they may cease creating certificates until they have sufficient carbon stock, or 2. they may be directed to voluntarily surrender (forfeit) certificates to an amount that is equivalent to carbon stock shortfall.

The amended rule also provides a wider range of alternatives for Abatement Certificate Providers to comply with their carbon sequestration maintenance obligations. For example, the new provisions allow a sequestration manager to remove parcels of land from its carbon sequestration pool, or to exit GGAS by buying out its 100-year obligation. To do this, an Abatement Certificate Provider would need to purchase and surrender (forfeit) certificates to an amount that is equivalent to its obligation.

The amended CS Rule was gazetted on 21 May 2010.

2.2 Closure of GGAS to new participants

As a result of legislation introduced in December 2009, GGAS was closed to new participants from 1 January 2010. This change was made on the assumption that GGAS would cease to operate when the proposed national Carbon Pollution Reduction Scheme (CPRS) was introduced in mid-2011. This meant that no new elective Benchmark Participants or applications for accreditation (for projects under one of the 4 GGAS Rules) would be accepted from 1 January 2010.

Following delays to the implementation of the CPRS and ongoing uncertainty about when a national scheme will be introduced and what form it will take, GGAS was re- opened to a limited extent in March 2011 via a change to the Electricity Supply (General) Regulation 2001 (the Regulation). This allowed purchasers of existing projects accredited under GGAS to apply for accreditation for those projects. That is, the amended Regulation preserves existing accredited activity, rather than adding new project activity, under GGAS.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 9

2 Developments in GGAS during 2010

2.3 Cessation of Category A Generating systems

As a result of legislation introduced in December 2009, all Abatement Certificate Providers accredited for projects based on Category A Generating Systems stopped being entitled to create certificates from this abatement activity from 1 July 2010. Each of these accreditations was (or will be) assessed and audited, prior to the accreditations being cancelled.

2.4 IPART internal review of GGAS

On 27 April 2010, the Prime Minister announced that the introduction of the CPRS would be deferred. As a consequence of this, GGAS will continue to operate until a national scheme is introduced, which at the time seemed unlikely to be before 2013. In light of this, we conducted an internal review of GGAS in terms of its targets, scope and operation/administration. The review considered whether to:

 provide incentives for new projects to reduce and offset greenhouse gas emissions

 expand GGAS in scope to provide access to low-cost abatement, and

 improve the effectiveness of GGAS in delivering additional greenhouse gas reductions.

We reviewed options to enhance and expand GGAS’ effectiveness and efficiency against a set of criteria. We found that a number of effective improvements could be achieved with amendment to legislation, and a few effective improvements could be made without legislative amendments. One important improvement that doesn’t require an amendment to the Act is to remove the ability to count RECs towards GGAS compliance.

There is also scope to strengthen targets and penalties beyond 2012 to give impetus to new abatement projects, while addressing the surplus abatement certificates at the end of GGAS. In addition, we found that economic modelling is needed to identify the likely costs to the NSW economy of setting of new targets.

2.5 Inter-department review of GGAS

On 30 August 2010, the NSW Premier asked IPART to participate in an inter- departmental task force to review the on-going operation of GGAS. This review was also prompted by the deferral of the CPRS, and the resulting uncertainty about the introduction of a national scheme or carbon price.

The terms of reference for the review stated that the task forces’ objectives were to:

 pursue reductions in greenhouse gas emissions through efficient State-based mechanisms pending the establishment of an effective national mechanism

 strengthen and/or expand emissions abatement activities

10 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

2 Developments in GGAS during 2010

 increase energy industry certainty in relation to carbon pricing in NSW (and possibly the National Electricity Market (NEM)

 minimise the cost of abatement to NSW consumers and industry

 encourage the use of gas for electricity supply and direct use in NSW

 reduce the growth in fugitive emissions, and

 reduce emissions from existing coal-fired power stations.

The terms of reference also asked IPART to engage a consultant to undertake modelling of the impacts of proposed options, including modelling the impacts of the costs to consumers and testing a range of scenarios. This request arose independently of IPART’s own in-house analysis, and fitted in well with our ideas for managing the on-going operation of the scheme. The review was designed to be carried out in 2 stages, with modelling against a number of agreed scenarios completed in stage one.

The Government announced that the review was being conducted in November 2010 (see Box 2.1). However, commencement of stage 2 of the review was deferred pending further advice from government.

Box 2.1 Extract from NSW Government announcement on 4 November 2010

“In recent years, the NSW Government has been preparing to transition GGAS to a national scheme. The NSW Government has regularly stated that a national emissions trading scheme is supported by NSW as the most efficient and least cost approach to mitigating greenhouse gas emissions.

All jurisdictions agreed at COAG in 2007 that a national emissions trading scheme would be the central greenhouse emissions reduction measure, and that State and Territory programs would be complementary to the national scheme. Delayed national action means that there are no clear signals to investors in the energy market regarding how Commonwealth Governments’ (including NSW) emissions reduction targets are to be achieved.

In this context of ongoing uncertainty around the timing, form and scope of national carbon pricing arrangements, the NSW Government has commenced a review of GGAS.

The NSW Government recognises the importance for GGAS participants of a smooth transition to any national carbon pricing mechanism that may be implemented in the future and will take into account national policy developments in reviewing GGAS.”

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 11

2 Developments in GGAS during 2010

2.6 GGAS in the national climate policy context

2.6.1 Carbon Price Mechanism

In February 2011, the Commonwealth Government announced that it intended to introduce a national Carbon Price Mechanism (CPM)7.

On 10 July 2011 the Commonwealth Government announced further detail on the proposed CPM8. The carbon price is proposed to begin on 1 July 2012 with a fixed price of $23 for each tonne of emissions. The price will rise by 2.5% a year plus inflation until 1 July 2015. An emissions trading scheme will be introduced from that date which will enable the price of emissions to be determined by the market.

If the CPM is legislated, there will be substantial changes to GGAS. The NSW Government and the Commonwealth Government will clarify how compliance obligations and compliance instruments may transfer into a national or multi- jurisdictional scheme. The Act (Section 97KB) provides for GGAS to be terminated once a national or multi-jurisdictional scheme commences.

2.6.2 Carbon Farming Initiative

The Carbon Farming Initiative is being established by the Commonwealth Government to provide new economic opportunities for farmers, forest growers and landholders and help the environment by reducing carbon pollution.

The Carbon Farming Initiative includes:

 legislation to establish a crediting mechanism for emission reductions and for increasing carbon in the landscape

 fast-tracked development of methodologies for quantifying the carbon impacts of projects, and

 information and tools to help farmers and landholders benefit from carbon markets.

7 www.climatechange.gov.au/government/initiatives/multi-party-committee/carbon-price- framework.aspx 8 www.pm.gov.au/press-office/putting-price-carbon-pollution

12 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

2 Developments in GGAS during 2010

In March 2011 the Commonwealth Government introduced legislation to Parliament for the Carbon Farming Initiative. This initiative will create an administrative structure to allow abatement activities on the land to be recognised, credited and traded. Activities identified as eligible include afforestation and reforestation activities, destruction of methane in landfill gas, and destruction of methane from manure management systems. Certain subsets of these activities are currently covered by the GGAS Rules and any transition arrangements will need to be agreed between the NSW and Commonwealth Governments.

Further information on the Carbon Farming Initiative is available on the Department of Climate Change & Energy Efficiency’s website9.

9 www.climatechange.gov.au/cfi

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 13

3 NSW Benchmark Participants’ compliance performance

There were 40 Benchmark Participants for the 2010 compliance year in NSW. These included 29 prescribed participants, comprising 26 licensed electricity retailers, 2 market customers and 1 generator,10 plus 11 large users of electricity that have voluntarily elected into GGAS. No State Significant Developments have elected into GGAS.

All Benchmark Participants are required to lodge an Annual Greenhouse Gas Benchmark Statement (benchmark statement) with IPART by no later than 18 March of the following year. In most cases, IPART requires benchmark statements to be accompanied by an independent audit report. Benchmark Participants submitting nil returns complete a simplified benchmark statement which does not require an audit. We also grant audit exemptions for Benchmark Participants with very low electricity purchases for the year.

The benchmark statement sets out the Benchmark Participant’s individual greenhouse gas benchmark (ie, abatement obligation) and the number of abatement certificates it has surrendered to meet this obligation. If a participant surrenders insufficient certificates to meet its benchmark, the difference is known as a greenhouse shortfall. Benchmark Participants can choose to carry forward to the following year a greenhouse shortfall of up to 10% of their individual benchmark without having to pay a penalty. However, any shortfall carried forward must be abated the following year. If they choose not to carry forward, or have a greenhouse shortfall in excess of 10% of their benchmark, they incur a financial penalty. For the 2010 compliance year, this penalty was $14.00 per tonne of carbon dioxide equivalent for any greenhouse shortfall11 in excess of what they carried forward.

10 Delta Electricity is a prescribed generator under s73(B) of the Electricity Supply (General) Regulation 2001. However, Delta Electricity is also a licensed NSW electricity retailer. To avoid double counting, Delta Electricity is counted only once as a Benchmark Participant in the total figure. 11 The calculation of the penalty and CPI adjustment is made pursuant to section 97CA of the Act and section 73C of the Regulation. The penalty is adjusted annually in line with CPI movements. However, during periods of low inflation the penalty is not adjusted due to a rounding mechanism in the formula. For the 2010 compliance year, the penalty rate of $14.00 per tCO2-e increased from the 2009 level of $12.50.

14 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

3 NSW Benchmark Participants’ compliance performance

The sections below summarise the Benchmark Participants’ compliance performance in 2010, and then provide detailed information on the number of abatement certificates surrendered, the types of abatement for which the certificates were created, the greenhouse shortfalls carried forward and the greenhouse gas penalties paid.

Box 3.1 How is a Benchmark Participant’s total GGAS abatement obligation for each compliance year determined?

The number of certificates each Benchmark Participant must surrender each year is the difference between the calculated emissions from their electricity purchases and their Greenhouse Gas Benchmark. This largely depends on the carbon intensity of electricity generation (the NSW Pool Coefficienta), total electricity demand, the Benchmark Participant’s share of total demand, and the State Greenhouse Gas Benchmark emissions intensity.

The NSW electricity demand is adjusted by adding the electricity savings resulting from the creation of certificates under the DSA Rule 2 years earlier. For example, the savings associated with 2008 DSA Rule certificate creation are added to the 2010 NSW electricity demand.

This adjustment is required because a reduction in energy use associated with DSA Rule certificate creation creates 2 benefits for Benchmark Participants: 1. Benchmark Participants can surrender DSA Rule certificates to meet their targets, and 2. future electricity demand is reduced, thus making future targets easier to achieve.

The adjustment avoids Benchmark Participants claiming 2 separate benefits for the same energy savings from these DSA Rule projects.

As it happens, the total certificates required to be surrendered by all Benchmark Participants reduced from 24.8 million certificates in 2009 to 22.7 million certificates in 2010. This was primarily due to the smaller addition to the electricity demand required for the past DSA Rule certificate creation adjustment.

The State Greenhouse Gas Benchmark which had progressively reduced from 2003 to 2007 remained unchanged. a The Pool Coefficient is the average emissions per unit of electricity delivered (t CO2-e/MWh) at transmission nodes for the pool of NSW Category B generators, where NSW Category B generators are those listed in Schedule B of the Generation Rule. Essentially, they are baseload coal and hydro plants in NSW.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 15

3 NSW Benchmark Participants’ compliance performance

3.1 Summary of Benchmark Participants’ compliance performance in 2010

Of the 40 Benchmark Participants, 33 fully met with their individual greenhouse gas benchmark, including any remaining obligations for the 2009 compliance year. Of these, 28 surrendered sufficient certificates to meet their greenhouse gas benchmark, while a further 5 did not directly purchase or sell electricity in NSW and were therefore not required to surrender any abatement certificates (NGACs or LUACs).

The remaining 7 Benchmark Participants had a greenhouse shortfall. Among these participants, 5 chose to carry their entire greenhouse shortfall to 2011. Only 2 Benchmark Participants failed to meet their obligations. Table 3.1 lists these participants in groups according to their compliance performance.

Table 3.1 NSW Benchmark Participants’ compliance performance in 2010

Compliance performance Benchmark Participant Type of Participant Surrendered sufficient certificates to Aurora Energy Mandatory meet 2010 greenhouse benchmark Australian Power & Gas Mandatory BlueScope Steel (AIS) Elective Boral Limited Elective Carter Holt Harvey Australia Elective Centennial Coal Company Elective Cogent Energy Mandatory Country Energy Mandatory Delta Electricity Mandatory EnergyAustralia Mandatory ERM Power Retail Mandatory Hydro Aluminium Kurri Kurri Elective Infigen Energy Markets Mandatory Integral Energy Mandatory Lumo Energy Mandatory Momentum Energy Limited Mandatory Norske Skog Paper Mills (Aust) Elective OneSteel Manufacturing Elective Orica Australia Elective Origin Energy Electricity Mandatory Red Energy Mandatory Sun Retail Mandatory Tarong Energy Corporation Mandatory Tomago Aluminiumb Mandatory TRUenergy Mandatory TRUenergy Yallourn Mandatory Visy Industries Holdings Elective Xstrata Coal NSW Elective

16 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

3 NSW Benchmark Participants’ compliance performance

Compliance performance Benchmark Participant Type of Participant Did not directly purchase or sell ActewAGL Retaila Mandatory electricity in NSW and therefore was Dodo Power & Gas Mandatory not required to surrender certificates Diamond Energy Pty Ltd Mandatory Eraring Energyb Mandatory GridX Power Mandatory Surrendered certificates to meet part of AGL Sales (Queensland Electricity) Mandatory their greenhouse benchmark and AGL Sales Mandatory chose to carry forward their Amcor Packaging (Australia) Elective greenhouse shortfall to 2011 Macquarie Generation Mandatory Powerdirect Mandatory Failed to meet their obligation Independent Electricity Retail Solutions Mandatory Sanctuary Energy Pty Ltd Mandatory a This participant did not purchase electricity directly from the national electricity grid. Its electricity purchases were included in the return of the Benchmark Participants who purchased electricity from the national electricity grid on its behalf. b Registered with Australian Energy Market Operator (AEMO) as a market customer, that is, an electricity customer taking supply directly from the national electricity grid. Note: In March 2011, Origin purchased Country Energy's electricity and gas retailing business as well as Integral Energy's electricity retailing business; and TRUenergy acquired EnergyAustralia’s retail customer base. Accordingly, 2010 benchmark statements for sales attributed to Country Energy and Integral Energy were submitted by the renamed distribution businesses, Essential Energy and Endeavour Energy, respectively.

3.2 Number of abatement and Renewable Energy Certificates surrendered

Of the total obligation of 22.7 million certificates for the 2010 compliance year, approximately 16.8 million NGACs were offered for surrender, representing a decrease of 20% compared to 2009. NGACs continued to make up the largest percentage of abatement certificates surrendered to meet required compliance obligations (Figure 3.1).12

12 Total Abatement/Equivalent Renewable Energy Certificates required for compliance is a total of NGACs/LUACs required to meet obligations and RECs counted toward compliance expressed as an equivalent number of NGACs.

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3 NSW Benchmark Participants’ compliance performance

Figure 3.1 Number of abatement certificates surrendered and Renewable Energy Certificates counted

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0 2003 2004 2005 2006 2007 2008 2009 2010

Total NGACs surrendered Total LUACs surrendered Total RECs counted

Almost 1.3 million LUACs were surrendered by 8 elective and 1 mandatory Benchmark Participant. This number is very similar to the number of LUACs surrendered in 2009.

Five elective participants, namely, Amcor Packaging, Boral Limited, Hydro Aluminium, Orica Australia and Xstrata Coal NSW, have met their obligation by surrendering only LUACs towards GGAS compliance. Another 4 Benchmark Participants – BlueScope Steel, Carter Holt Harvey Australia, Norske Skog Paper Mills and Tomago Aluminium – used a combination of both LUACs and NGACs to meet their respective benchmarks. The remaining 3 elective participants – Centennial Coal Australia, OneSteel Manufacturing, and Visy Industries – did not surrender any LUACs to meet their abatement obligation for this compliance year. In addition to this, all elective participants counted a certain number of RECs towards their GGAS obligations. The percentage of LUACs surrendered in 2010 compared to 2009 is shown in Table 3.2.

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3 NSW Benchmark Participants’ compliance performance

Table 3.2 Percentage of LUACs surrendered in 2009 and 2010 by individual large usersa

Large Users 2009 2010 (that surrendered LUACs) LUACs surrendered LUACs surrendered (as a % of total (as a % of total abatement) abatement) Amcor Packaging (Australia) 66% 63% BlueScope Steel 22% 21% Boral Limited 100% 83% Carter Holt Harvey Australia 0% 10% Centennial Coal (Aust.) 0% 0% Hydro Aluminium Kurri Kurri 86% 84% Norske Skog Paper Mills (Australia) 11% 11% Onesteel Manufacturing 0% 0% Orica Australia 100% 81% Tomago Aluminium 59% 50% Visy Industries Holdings 0% 0% Xstrata Coal NSW 100% 81% Total 6% 5% a Individual total abatement for the year is calculated by the number of certificates required to attain a zero greenhouse shortfall including any greenhouse shortfall carried forward from the previous year.

As shown in Table 3.3, the total number of RECs counted towards Benchmark Participants’ compliance was approximately 4 million, which is an increase of just over 61% compared to the 2009 compliance year. This substantial increase in the number of RECs counted towards GGAS compliance from 2009 to 2010 is due to an increase in the Renewable Power Percentage under the RET legislation from 3.64% in 2009 to 5.98% in 2010.

Since GGAS began in 2003 and until the end of 2010, just over 100 million NGACs have been surrendered. When LUACs are included, this figure increases to approximately 106 million certificates. When equivalent RECs are also taken into account, it increases to just over 120 million certificates.

Tables 3.3 provides a detailed breakdown of the numbers of abatement certificates offered for surrender and accepted in each year since 2003, compared to the total number of certificates required to completely meet the GGAS abatement obligations (including any greenhouse shortfalls that were carried forward to the next year). Note that this table has been prepared on the basis that no greenhouse penalties have been incurred. Based on this methodology, the 2010 greenhouse abatement obligation totals 22,716,649 abatement certificates.

Table 3.4 presents this information in percentage terms.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 19

IPART 3

NSW Benchmark Participants’ compliance performance performance compliance NSW BenchmarkParticipants’

Table 3.3 NSW Total Abatement and Renewable Energy Certificates offered for surrender and accepted since GGAS began Compliance and Operation ofthe NSWGreeCompliance and Operation Compliance Year

2003 2004 2005 2006 20072008 2009 2010

Total NGACs surrendered 1,166,866 5,037,847 7,982,204 11,592,583 15,922,727 20,456,449 21,104,475 16,876,212

Total LUACs surrendered 0 0 64,401 686,560 1,040,462 1,141,096 1,295,496 1,258,099

RECs counted toward compliance 544,518 841,194 1,117,907 1,512,006 1,878,514 2,205,601 2,535,679 4,083,772

NGAC equivalenta 488,432 762,122 1,020,649 1,404,653 1,767,682 2,104,143 2,452,002 3,973,510

Actual Total Certificates surrendered

nhouse Gas Reduction Scheme during2010 nhouse Gas to meet compliance obligations for 1,655,298 5,799,969 9,067,254 13,683,796 18,730,871 23,701,687 24,851,973 22, 107,821 the year

Total Certificates required to meet compliance obligations for the 1,699,941 5,897,234 9,150,547 13,802,181 18,387,285 24,148,452 24,852,164 22,716,649 yearb

Total shortfalls carried forward to 44,643 141,908 225,201 343,586 0 446,765 446,956 1,055,784 next compliance year

a RECs are not directly equivalent to NGACs. To calculate the NGAC equivalent the number of RECs is multiplied by the pool coefficient for that year (for 2010 that number is 0.973 (tCO2-e/MWh)). b Total Certificates required to meet compliance obligations for the year is a total of NGACs and LUACs required to meet obligations plus RECs counted toward compliance expressed as NGAC equivalents plus shortfalls carried forward to the following year minus the shortfall carried forward from the previous year. Total = NGACs + LUACs + RECs + shortfall current year – shortfall previous year.

Table 3.4 Components of Abatement since GGAS began (expressed as total surrenders plus carry forward to following year)

Compliance Year 2003 2004 2005 2006 2007 2008 2009 2010 TOTAL

NGACs surrendered 68.6% 84.8% 85.9% 82.6% 85.0% 84.7% 83.4% 72.9% 81.9% Compliance and OperationoftheNSW Gr and Compliance LUACs surrendered 0.0% 0.0% 0.7% 4.9% 5.6% 4.7% 5.1% 5.4% 4.5% RECs taken into account 28.7% 12.8% 11.0% 10.0% 9.4% 8.7% 9.7% 17.2% 11.4% (NGAC equivalent) Greenhouse shortfalla 2.6% 2.4% 2.4% 2.4% 0.0% 1.9% 1.8% 4.6% 2.2%

Total abatement obligations 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

a In 2007, no shortfall was allowed to be carried forward to ensure that NSW met its target in line with the Kyoto protocol. Note: Some of the data in this table differs slightly from data published in tables in previous Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme reports. Previous components have generally been expressed as a percentage of total abatement which includes any obligation carried forward from the previous year. These figures are now expressed as a percentage of surrenders plus obligations elected to be carried forwards to the following year. Total abatement obligations = NGACs surrendered + LUACs surrendered + RECs accounted + shortfall obligations.

NSW Benchmark Participants’ compliance performance performance compliance NSW BenchmarkParticipants’ eenhouse GasReduction Scheme during2010 IPART

3 NSW Benchmark Participants’ compliance performance

3.3 Types of abatement certificates surrendered

NGACs surrendered in 2010 were created via abatement projects accredited under the Generation Rule, the DSA Rule and the CS Rule, while all the LUACs surrendered were created under the LUAC Rule. As in 2009, the Generation Rule is the largest source of certificates surrendered. The number of DSA Rule certificates surrendered decreased by approximately 86% from 2009 in line with the decline of DSA Rule certificate creation in recent years.

Table 3.5 provides a detailed breakdown of types of certificates offered for surrender and accepted for each year of GGAS operation.

Table 3.5 Types of certificates (NGACs/LUACs) offered for surrender and accepted

Generation DSA CS Total LUAC Total Rule Rule Rule NGACs Rule

2003 1,114,174 52,692 0 1,166,866 0 1,166,866 95.5% 4.5% 0.0% 100.0% 0.0% 100.0%

2004 4,432,113 605,734 0 5,037,847 0 5,037,847 88.0% 12.0% 0.0% 100.0% 0.0% 100.0%

2005 7,599,850 382,354 0 7,982,204 64,401 8,046,605 94.4% 4.8% 0.0% 99.2% 0.8% 100.0%

2006 9,291,261 2,251,272 50,050 11,592,583 686,560 12,279,143 75.7% 18.3% 0.4% 94.4% 5.6% 100.0%

2007 9,739,237 6,158,491 24,999 15,922,727 1,040,462 16,963,189 57.4% 36.3% 0.1% 93.9% 6.1% 100.0%

2008 10,866,268 9,407,377 182,803 20,456,448 1,141,096 21,597,544 50.3% 43.6% 0.9% 94.8% 5.2% 100.0%

2009 12,860,969 7,536,584 706,922 21,104,475 1,295,496 22,399,971 57.4% 33.6% 3.2% 94.2% 5.8% 100%

2010 15,276,095 1,031,111 569,006 16,876,212 1,258,099 18,134,311 84.2% 5.7% 3.1% 93.1% 6.9% 100%

Note: Percentage totals may not add due to rounding.

3.4 Greenhouse shortfalls carried forward

Five Benchmark Participants chose to carry forward greenhouse shortfalls to 2011

(Table 3.6). Together, these greenhouse shortfalls were equivalent to 1,055,784 tCO2-e and represent around 4.6% of the total abatement in 2010.

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Table 3.6 Benchmark Participants carrying forward a greenhouse shortfall to 2010

Benchmark Participant Greenhouse shortfall (as % of individual benchmark) AGL Sales (Queensland Electricity) Pty Ltd 9.5% AGL Sales Pty Ltd 10.0% Amcor Packaging Australia 10.0% Macquarie Generation 10.0% Powerdirect Pty Ltd 10.0%

3.5 Greenhouse Gas penalties

Two Benchmark Participants failed to surrender certificates to meet their greenhouse gas benchmarks and were levied a penalty in respect of their resultant greenhouse shortfalls. These were Independent Electricity Retail Solutions (IERS) and Sanctuary Energy.

IERS’ liable shortfall was 69 tCO2-e, for which the penalty was $966.00. Sanctuary Energy’s liable shortfall was 4,794 tCO2-e, for which the penalty was $67,116.00. Both penalties being based on the 2010 penalty rate of $14.00 per certificate. Together, these participants’ liable shortfalls represented 0.004% of the total annual greenhouse gas benchmark obligation for Benchmark Participants. As at 30 June 2011 these penalties were still outstanding.

Table 3.7 outlines penalty payments over previous compliance years.

Table 3.7 Penalty payments

Year Dollar amount tCO2-e 2009 $15,287.50 1,223 2008 $1,152.00 96 2007 $204.00 17 2006 $0.00 0 2005 $0.00 0 2004 $21.00 2 2003 $0.00 0

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4 Abatement Certificate Providers’ compliance performance

Abatement Certificate Providers are voluntary participants in GGAS. They apply for accreditation to undertake eligible abatement projects under the GGAS Rules. The GGAS Rules set out additional eligibility criteria and the calculation methods used to determine the number of certificates (NGACs or LUACs) that can be created. Each certificate represents the abatement of one tonne of carbon dioxide equivalent emissions.

As Scheme Administrator, IPART is responsible for approving applications for accreditation from potential Abatement Certificate Providers. Applicants must demonstrate that they meet the criteria for accreditation according to the Act, Regulation and Rules. Following accreditation, we monitor the ongoing compliance of Abatement Certificate Providers with the GGAS Rules and specific conditions of accreditation.

In establishing the framework for accrediting projects and assuring the ongoing compliance of Abatement Certificate Providers, we are guided by the need to ensure the integrity of GGAS. We do this through robust assessment and quantification of abatement and the ongoing monitoring of compliance against obligations arising from accreditation.

The section below summarises Abatement Certificate Providers’ compliance performance during 2010 and the key accreditation statistics for the year. The subsequent sections discuss the compliance outcomes and the accreditations we approved, amended and cancelled in more detail. (Appendix A provides a general overview of Abatement Certificate Providers and explains the methodologies for calculating the number of certificates that can be created under each GGAS Rule. Appendix C provides historical data on Abatement Certificate Providers.)

4.1 Summary of Abatement Certificate Providers’ compliance performance and key accreditation statistics

In 2010, Abatement Certificate Providers’ overall level of compliance with the Act, Regulations, Rules and accreditation conditions remained acceptable. The most significant non-compliance event, and the cause of most concern to IPART, was CS Energy’s failure to correctly apply equations under the Generation Rule (see Section 4.2.2). While the number of instances of non-compliance increased compared to 2009, all were satisfactorily addressed during the year.

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At the end of 2010, there were 172 Abatement Certificate Providers accredited under GGAS. This is considerably fewer than the 225 providers accredited at the end of 2009, largely due to the cancellations of energy efficiency accreditations under the DSA Rule and the closure of GGAS to new participants and projects.

The GGAS Committee sitting as Scheme Administrator met 13 times during 2010 and approved a total of 15 accreditation applications, 36 amendments and 68 cancellations. The GGAS Committee also refused one application for accreditation. The 15 accreditations approved in 2010 were for applications received on or before 31 December 2009 following amendments to the Act to close GGAS to new applications from 1 January 2010 (discussed in Chapter 2, section 2.2).

4.2 Compliance outcomes

The Act identifies the following ways in which Abatement Certificate Providers may contravene their compliance obligations under GGAS:

 contravening the conditions of accreditation (section 97DD)

 improper creation of certificates (section 97J)

 obstructing the Scheme Administrator (section 97JA)

 supplying false or misleading information (section 97JB).

Among the 240 accreditations that were active for all or part of the year, there were 39 instances of contravention. This was 10 more instances than in 2009. However, most were minor in nature, involving a contravention of the conditions of accreditation. In particular, 24 involved failure to submit necessary documents by the required deadline. The remaining 15 instances involved the improper creation of certificates. While this is 9 more instances of this contravention than in 2009, the number of certificates improperly created was 23% less than in that year.

These contraventions were discovered either through voluntary declaration by the Abatement Certificate Provider, our administration processes, or the compliance audit process. The sections below provide more detail on the contraventions and how they were addressed.

4.2.1 Failure to submit documents by required deadline

Of the 24 instances involving failure to submit necessary documents by the required deadline, 23 involved failure to submit an Annual Report Statement by the required deadline, and the remaining one was a failure to submit documentation in relation to special conditions of accreditation. These instances involved only 5 Abatement Certificate Providers. Three of these (representing 21 accreditations) promptly completed their outstanding compliance obligations by submitting their documentation once we advised them of the contravention. The remaining

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4 Abatement Certificate Providers’ compliance performance

2 Abatement Certificate Providers (representing 3 accreditations) satisfactorily completed their outstanding obligations following several reminders.

4.2.2 Improper creation of certificates

Of the 15 instances of improper creation of certificates, 14 involved the over-creation of certificates by 10 Abatement Certificate Providers, and one involved an attempt to register more than 110% of the nominated number of certificates without previously notifying us. Table 4.1 lists the different ways we classify the improper creation of certificates.

Table 4.1 Contraventions involving improper of certificates Number of Number of Type of improper creation Accreditations certificates Calculation error (rounding or calibration error) 1 6,873

Transcription errors 2 2,661

Use of ineligible nomination forms 1 378 Use of incorrect data (eg, rule default factor, or other related 7a 3,844 data inputs) Failure to abstain from creating further certificates until 1 6,292 sufficient carbon stock held Registering more than 110% of the nominated number of 10 certificates without previously notifying the Scheme Administrator Systemic issues in record keeping 1 16,252

Systemic calculation error 1 34,929

2010 Totals 15 71,229

2009 Totals 6 92,697

a In respect of 3 Accredited Certificate Providers.

Over-creation of certificates

The number of instances of over-creation of certificates was higher in 2010 than in 2009. However, the number of certificates over-created as a result of these instances was significantly lower. In addition, most of the instances were minor in nature. Only 2 were significant. These 2 instances resulted from systemic errors in the application of the certificate creation methodology and record keeping, and were responsible for around three-quarters of the total number of certificates over-created in 2010 (Table 4.1).

After being notified, all but one of the companies involved agreed to forfeit the over- created certificates. This ensured that the number of certificates created represents valid energy savings. These instances are discussed in more detail below.

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Minor instances of over-creation of certificates

As Table 4.1 shows, most of the instances of over-creation were minor in nature, resulting from some form of administrative error or lack of attention to detail on the part of the Abatement Certificate Provider.

One instance involved the Abatement Certificate Provider failing to abstain from creating further certificates until it held sufficient carbon stocks for the number of certificates it had created. This obligation stems from the CS Rule, and is due to the complexities of forestry carbon accounting.

Significant instances of over-creation of certificates

The 2 significant instances of over-creation resulted from systemic issues with the record keeping and calculation methods of the companies involved – AGL Hydro Partnership (AGL) and CS Energy. As Table 4.1 shows, these instances were responsible for 72% of the total number of certificates over-created in 2010.

AGL’s over-creation event was identified during a periodic portfolio audit of the company’s suite of accreditations. The auditor could not locate key records (original nomination forms) for AGL’s gas hot water system accreditation under the DSA Rule for activities in 2008 and 2009. As a result, it performed a special close-out audit of this accreditation using duplicate copies of the nomination forms. The auditor was not able to provide positive assurance for over 16,252 certificates, and identified several deficiencies in relation to AGL’s record keeping. AGL was offered the opportunity to retrieve the original nomination forms from its retail outlets. However, it chose to voluntarily forfeit the 16,252 certificates instead. AGL was also required to implement action to correct the deficiencies in its record keeping for the creation of the remaining certificates.

CS Energy’s over-creation event involved failure to correctly apply equations under the Generation Rule so as to avoid double counting of abatement. During 2010, it came to our attention that some generators approved to participate in both GGAS (under Equation 1 of the Generation Rule) and the Queensland Gas Scheme might be incorrectly calculating the number of NGACs they could create. We reminded all relevant Abatement Certificate Providers of the Act’s requirements prohibiting double counting, and advised them of potential issues in relation to over-creation of NGACs where GECs were also created.

Following an internal review of all relevant accreditations, we discovered that CS Energy had made an error in calculating the certificates it could create for the Swanbank E Power Station accreditation over the period January 2005 to June 2009. As a result of this error, it had contravened the Act by creating both NGACs and GECs for the same generation activity, and thus had invalidly created just over 250,000 NGACs. Under Section 185(3) of the Act, CS Energy may only be required to correct the over-creation of the previous 2 years. While we provided CS Energy with the opportunity to make good the errors in earlier years, they declined to do so. We requested that CS Energy voluntarily forfeit the legal minimum of invalidly created

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certificates. This equalled 34,929 NGACs for over-creation in the period 1 January to 30 June 2009. CS Energy agreed to this and forfeited the required number of NGACs.

While most Abatement Certificate Providers accredited in both the GGAS and the Queensland Gas Scheme understand the principles governing double counting, the Generation Rule was not explicit in describing how GECs may be created when NGACs are also created. As discussed in section 2.1.1, the Generation Rule was amended in late 2010 to remove any possible misunderstanding of these provisions.

Instance where the company responsible did not agree to forfeit the over-created certificates

In one of the minor instances of over-creation, we discovered that the company had been deregistered, making forfeiture legally impossible. The contact person(s) for the accreditation did not notify us of deregistration until after receiving our correspondence advising of the over-creation.13 We note that the number of certificates over-created was relatively small (378), and the accredited party had met all other compliance obligations. As it had ceased to exist (through deregistration), we considered that its accreditation had lapsed and removed it from the list of accredited parties in 2011.

Attempt to register more than 110% of the nominated number of certificates without previous notification

One instance of potential improper creation occurred when an Abatement Certificate Provider attempted to register more than 110% of the nominated number of certificates without previously notifying us. The use of a cap based on expected certificate creation is an important means of managing the risks of over-creation of certificates. These caps are specific to each project and reflect the technical characteristics of the projects. Abatement Certificate Providers are required to notify the Scheme Administrator in advance that, when for various reasons, they expect to exceed their nominated number of certificate creation.

4.3 Accreditations approved in 2010

Accreditations approved in 2010 consisted of both Generation Rule and DSA Rule projects. All of the DSA Rule accreditation applications approved use the Generations Emissions Method calculation method – the only calculation method now applicable under the DSA Rule, due to the transition of the energy efficiency component of GGAS to the ESS.

13 Subsequent investigation into the circumstances of this case revealed that deregistration of the entity had been initiated prior to the final audit being commissioned. However, the relevant contacts failed to notify us of this deregistration prior to commencement of the audit or through other appropriate channels (eg, the Annual Report Statement).

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Table 4.2 sets out the number of accreditations approved for each year GGAS has been operating, categorised by Rule.

Table 4.2 Number of accreditations approved each year by Rule

Generation Rule DSA Rule LUAC Rule CS Rule Accredited in 2003 14 3 1 0 Accredited in 2004 67 48 0 1 Accredited in 2005 25 43 1 3 Accredited in 2006 9 17 2 1 Accredited in 2007 24 19 4 1 Accredited in 2008 17 10 1 1 Accredited in 2009 12 1 1 0 Accredited in 2010a 78b 0 0 a New accreditations apply for applications received on or before 31 December 2009. b Generation Emissions Method projects only, as shown in Table 4.3. Note: An accreditation may cover several ‘accredited projects’ which involve similar abatement activities. For example, activities in the commercial and residential sectors may be counted as separate projects but one DSA accreditation.

Accreditations approved in 2010 covered various categories and jurisdictions as detailed in Table 4.3. Appendix B provides information on the different categories of the Generation Rule, while Appendix C provides a detailed breakdown of accreditations approved each year since 2003.

Table 4.3 Accreditations approved in 2010

Rule and type Jurisdiction Accreditations approved Generation Rule Category C – Natural Gas Victoria 1 Category D – Natural Gas New South Wales 2 Category D – Natural Gas Tasmania 3 Category D – Sewage Gas New South Wales 1 DSA Rule Generation Emissions Method New South Wales 8

At the end of 2010, there remained 3 applications for accreditation under review. These applications were received before the 31 December 2009 cut-off date for new applications. Two of these applications were approved in the first half of 2011 and were eligible to create 2010 certificates under the Generation Rule. Delays to finalising our assessment of these applications were a result of the applicants not progressing their application or failing to respond to our requests for further information.

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4.4 Accreditations amended in 2010

During 2010, we approved 36 amendments to existing accreditations. Of these, 27 were to Generation Rule accreditations, 2 were to LUAC Rule accreditations and 7 were to CS Rule accreditations.

The amendments involved:

 changes to the nominated number of certificates that can be created

 the addition or removal of Special Accreditation Conditions

 changes to audit and reporting requirements

 commissioning of a previously accredited future project (Origin Energy’s 644MW Darling Downs Power Station)

 changes to the application of equations and/or methods used

 acceptance or revision of Performance Improvement Testing Regime documentation

 changes due to amendments to the Rules

 for CS Rule accreditations, the addition or removal of forests from sequestration pools.

4.5 Accreditations cancelled in 2010

Accreditations may be cancelled for several reasons, including:

 a corporate restructure or sale14

 the accreditation is completed and has finished reducing greenhouse gas emissions, and

 an accreditation ceases to be eligible.

During 2010, we cancelled 68 accreditations, most of which were DSA Rule accreditations which were cancelled due to the transition of the energy efficiency component of GGAS to the ESS (Table 4.4).

In addition, the GGAS Committee determined to cancel an accreditation of a CS Rule project. However, this cancellation had not been formally cancelled by the end of the year, as the Abatement Certificate Provider must first remove the Restriction on Use from the land titles (Appendix A, section A.7.5).

14 In previous years, a cancellation due to this reason often resulted in a fresh accreditation for the same project but with a different accreditation owner. However, the opportunity for a takeover company to reapply for accreditation was not available during 2010 due closing of new applications.

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Further, a number of accreditations were pending cancellation in 2011, including:

 26 Generation Rule Category A accreditations, due to amendment to the legislation in December 2009 to render ineligible this type of abatement activity after 30 June 2010, and

 9 DSA Rule accreditations, due to the transition of the projects into the ESS.

Table 4.4 Accreditations cancelled in 2010 by Rule

Rule and type Accreditations cancelled Generation Rule Category A – Hydro 6 Category A – Landfill Gas 1 Category C – Natural Gas 1 Category D – Natural Gas 1 DSA Rule Default Abatement Factors Method 23 Metered Baseline Method – baseline per unit of output 3 Metered Baseline Method – normalised by NABERS scheme 2 Project Impact Assessment Method 30 LUAC Rule Specific Abatement Project 1 CS Rule Carbon Sequestration Estimation Methodology 0

4.6 Accreditations remaining at the end of 2010, by rule

4.6.1 Accreditations under the Generation Rule

At the end of 2010, 131 accreditations under the Generation Rule remained. As noted above, 26 of these are Category A accreditations and are no longer eligible, thus pending cancellation. Of the remaining accreditations, the majority are Category D Landfill Gas and Natural Gas projects, involving the destruction of methane as the prime activity.

Tables 4.5 and 4.6 provide a breakdown of Generation Rule accreditations remaining at the end of 2010 (and not pending cancellation) by category and jurisdiction.

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Table 4.5 Accreditations under Categories B, C and D of the Generation Rule by category and fuel type

Category and type Accreditations Category B – Coal 7 Category C – Biomass 1 Category C – Coal 7 Category C – Hydro 2 Category C – Natural Gas 9 Category C – Sewage Gas 1 Category D – Biomass 5 Category D – Coal 4 Category D – Coal Seam Methane 1 Category D – Landfill gas 38 Category D – Natural gas 21 Category D – Sewage Gas 1 Category D – Waste Coal Mine Gas 8

Table 4.6 Accreditations under Categories B, C and D of the Generation Rule by jurisdiction

Jurisdiction Accreditations Australian Capital Territory 2 New South Wales 37 Queensland 26 South Australia 9 Tasmania 8 Victoria 23

4.6.2 Accreditations under the DSA Rule

During 2010, 58 DSA Rule accreditations were cancelled following their transition, if eligible, to the ESS. In some cases, the accredited party did not seek to move to the ESS, in which case the accreditations were cancelled in their entirety.

At the end of 2010, 25 DSA Rule accreditations remained, of which 9 are energy efficiency accreditations pending cancellation. These 9 accreditations are not eligible to participate or create certificates under GGAS.

The other 16 accreditations are ongoing accreditations under the Generation Emissions Method (embedded generation), and mostly involve activities in the Industrial sector. Only projects accredited under the Generation Emissions Method were eligible to create certificates under the DSA Rule during 2010. Table 4.7 provides a breakdown of accreditations under the Generation Emissions Method at the end of 2010.

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Table 4.7 Accreditations under the Generation Emissions Method of the DSA Rule

Project type Accreditations On-site Generation – Commercial 1 On-site Generation – Industrial 14 On-site Generation – Residential 1

4.6.3 Accreditations under the LUAC Rule

During 2010, the first cancellation of a LUAC Rule accreditation was processed. This was the accreditation of Xstrata Coal NSW Pty Ltd at their United Collieries mine. This brought the total number of LUAC accreditations remaining at the end of the year to 9. The accredited parties and projects involved were:

 Amcor Packaging Australia Pty Ltd – improvements in the efficiency of on-site fuel use at its Botany paper mill.

 BlueScope Steel (AIS) Pty Ltd – improvements in the efficiency of on-site fuel use and replacing high emission fuels with lower emission fuels at its Port Kembla steelworks.

 Boral Ltd – improvements in the efficiency of on-site fuel use at the Blue Circle Southern Cement Berrima cement works.

 Carter Holt Harvey Pty Ltd – upgrade of its Tumut particleboard plant (replacing high emission fuels with lower emission fuels).

 Hydro Aluminium Kurri Kurri Pty Ltd – upgrade of its Kurri Kurri aluminium smelter (abating on-site greenhouse gas emissions from industrial processes).

 Norske Skog Paper Mills Pty Ltd – improvements in the efficiency of on-site fuel use at its Albury paper mill.

 Orica Australia Pty Ltd - improvements in the efficiency of on-site fuel use at its Kooragang Island Ammonia Plant.

 Tomago Aluminium Company Ltd – upgrade of its Tomago aluminium smelter (abating on-site greenhouse gas emissions from industrial processes).

 Xstrata Coal NSW Pty Ltd – capture and combustion of coal mine gas otherwise vented (abatement of on-site fugitive emissions) at the Bulga coal mine.

Table 4.8 shows these accreditations by calculation method used.

Table 4.8 Accreditations by calculation method under the LUAC Rule

Calculation method Accreditations Existing Plant Baseline Method 4 Plant Extension or New Plant Baseline Method 1 Specific Abatement Project 4

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 33

4 Abatement Certificate Providers’ compliance performance

4.6.4 Accreditations under the CS Rule

There was little change in accreditations under the CS Rule during 2010. This is because the key stakeholders in forestry are already accredited in GGAS, and are able to add forests to their sequestration pools through amendments to current accreditations.

At the end of 2010, the number of CS Rule accreditations remained unchanged at 7. However, as noted above, we determined to cancel one accreditation with formal cancellation pending finalisation of documentation by the Abatement Certificate Provider.

34 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

5 Audit activity

The GGAS legislation provides us with wide auditing powers in exercising the functions of Scheme Administrator and Compliance Regulator. The audit and compliance framework helps provide assurance that GGAS is operating in accordance with the relevant legislation, that information provided by GGAS participants is reliable, and that certificate creation is backed by real greenhouse gas reductions.

For audits of Abatement Certificate Providers, we generally use a risk-based approach to decide on the audit regime for a particular company. We take account of a range of factors, including the company’s size and previous compliance history, the complexity of the project, the calculation methodology to be used and the number of certificates to be created.

For audits of Benchmark Participants, there are fewer variables within the risk assessment. We have adopted a stringent approach, in that we require all benchmark statements to be audited, with exemptions given on a case-by-case basis. This approach should ensure that targets required by the legislation are met. Exemptions have generally been granted only where the risk to GGAS is extremely low.

The Regulation states that GGAS participants bear the cost of audits, even in the circumstance where we, as Scheme Administrator, select and engage the auditor.

The section below provides a summary of our audit activity in 2010. The subsequent sections describe the key features of the audit and compliance framework – including the Audit and Technical Services Panel, the selection and management of audits, and the compliance and audit monitoring strategy for Abatement Certificate Providers.

5.1 Summary of audit activity

During 2010, we managed 91 audits, including audits of benchmark statements, audits of accreditations initiated by us as Scheme Administrator (eg, pre- accreditation audits or spot audits), and audits of accreditations initiated by Abatement Certificate Providers to comply with their conditions of accreditation. These audits included 34 benchmark statements and 120 accreditations (Table 5.1).

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5 Audit activity

Table 5.1 Number of audits undertaken

2009 2010 Benchmark statement audits Number of audits 26a 31b Number of benchmark statements covered 28a 36b Accreditation audits initiated by the Scheme Administratorc Number of audits 5 5 Number of accreditations covered 5 8 Accreditation audits initiated by Abatement Certificate Providersc Number of audits 62 55 Number of accreditations covered 120 112 Total number of audits 90 91 Total benchmark statements or accreditations covered 153 156 a Conducted in the first quarter 2010. b Conducted in the first quarter of 2011. c Conducted during the calendar year.

Compared to 2009, there was a small increase in the number audits conducted, mainly relating to close-out audits of both Generation Rule Category A accreditations and DSA Rule accreditations. This increase has been tempered by our continued commitment to decreasing participants’ compliance costs by bundling audits together across company portfolios where possible.

As Scheme Administrator, we initiated 5 audits comprising 2 pre-accreditation audits, one project implementation audit, one PITR review audit and one NGAC creation audit. The total cost of these audits was just under $65,000.

Overall, the number of audits has remained steady compared to 2009. This reflects the maturing of GGAS and is indicative of a shift towards monitoring compliance with existing accreditations.

5.2 Audit and technical services panel

The Audit and Technical Services Panel (the panel) was established to undertake audit activities for GGAS participants, the Compliance Regulator and the Scheme Administrator, and to provide technical services to the GGAS Committee as required. At the end of 2010, the panel included 25 firms in 2 categories (Table 5.2):

 Audit and Technical Service providers, which have been approved by the GGAS Committee to perform audits under GGAS, and can also provide technical services.

 Technical Services providers, which can provide technical services only.

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5 Audit activity

Firms may apply to become a member of the panel at any time, and their applications are assessed against specific selection criteria.15 Once appointed, they can be engaged to provide specific services and undertake these services in accordance with an Audit and Technical Services Panel Agreement (the panel agreement).

During 2010, one new firm was added to the Panel. A list of all members of the Panel is available from our website.16

Table 5.2 Membership of the Audit and Technical Services Panel as at December 2010

No. of firms Audit and Technical Services providers 16 Technical Services providers 9 Total 25

5.3 Selection and management of auditors

Depending on the type of audit being conducted, the Scheme Administrator, Abatement Certificate Provider or Benchmark Participant may be responsible for selecting and engaging the auditor.

As Scheme Administrator, we normally select and engage the auditor for audits associated with applications for accreditation (pre-accreditation audit), where a significant change to an accreditation has been requested by an Abatement Certificate Provider, or where a non-compliance event has resulted in a tightening of audit requirements (eg, where an audit is required before NGACs can be registered).

In most cases, we select the auditor on a competitive basis, by seeking a detailed scope of works and fixed quotes from up to 3 panel members. We then engage the selected auditor to perform the required audit, and the Abatement Certificate Provider or applicant is required to pay the agreed audit fee prior to the commencement of the audit.

The scheme participant generally selects and engages the auditor for audits of the creation of certificates and the annual greenhouse gas benchmark statements. However, in these cases, the engagement is subject to our approval of the detailed scope of works for the audit and the selected auditor (as Scheme Administrator or Compliance Regulator).

15 A Panel Application Form and a Guide to Applying are available from the Scheme website at www.greenhousegas.nsw.gov.au/audit/joining.asp 16 www.greenhousegas.nsw.gov.au/audit/members.asp

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 37

5 Audit activity

The panel agreement establishes a unique arrangement for the conduct of audits whereby, regardless of who engages the auditor, the auditor’s primary duty of care is always to conduct the audit on our behalf as the Scheme Administrator or the Compliance Regulator. In comparison, under usual contractual arrangements, the duty of care is owed to the engaging party. Where an Abatement Certificate Provider engages the auditor, both it and the auditor must sign a deed poll nominating IPART as the primary client.

All audits are undertaken to assure that GGAS is operating in accordance with the relevant legislation and that information provided by GGAS participants is verified. Experience to date has shown that this contractual arrangement has been a highly effective mechanism for ensuring the integrity of the audit framework and the quality of abatement in GGAS. In all audits, we are always involved in opening and closing meetings, and on occasions are present during part of the on-site audit work.

5.4 Compliance and performance monitoring strategy

The Compliance and Performance Monitoring Strategy for Abatement Certificate Providers17 has been developed to:

 provide transparency in the administration of GGAS

 help Abatement Certificate Providers understand their obligations under GGAS

 minimise the incidence of invalid creation of abatement certificates

 provide cost-effective compliance options

 encourage a culture of compliance among participants

 provide for credible enforcement options in the event of non-compliance.

The strategy sets out how we monitor Abatement Certificate Providers’ performance through a combination of annual reports and audit requirements tailored to the individual provider’s circumstances. It also sets out the factors we consider when determining whether a pre-accreditation audit of an applicant is required. The strategy is designed to be risk-based and flexible so that, over time, we are able to recognise good compliance performance and, if appropriate, relax an Abatement Certificate Provider’s compliance monitoring regime.

Pre-accreditation audits are performed prior to an applicant becoming accredited, and the audit findings and recommendations are often relevant to determining the appropriate regime for ongoing compliance monitoring after accreditation.

17 www.greenhousegas.nsw.gov.au/documents/syn70.asp

38 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

5 Audit activity

Once accredited, Abatement Certificate Providers are subject to an ongoing auditing regime as a means of ensuring compliance. The audit requirements vary between providers, and are detailed in their conditions of accreditation. When an applicant becomes accredited, they are informed of any special conditions of accreditation, including the requirement for on-going audits of GGAS-related information and certificate creation.

All Abatement Certificate Providers are required to submit annual reports, regardless of the type of project they are accredited for. We have developed templates to assist them in fulfilling their reporting requirements. Their annual reports must be signed by a person authorised to sign on behalf of the company. The provision of false and misleading information in these reports is subject to a penalty.

We use a range of auditing regimes to monitor ongoing compliance including:

 pre-registration audits, where prior to any NGAC creation, an Abatement Certificate Provider must have received reasonable assurance that the NGAC claim is reasonable

 annual audits, which are generally conducted after registration of certificates

 periodic audits (biennial, triennial or volumetric)

 spot audits.

A spot audit regime is applied where the accreditation is considered to represent a low risk to GGAS. Alternatively, spot audits can be imposed by us at any time regardless of any other specified audit requirement in the conditions of accreditation. These spot audits can be implemented for varying reasons – for example:

 to revisit an accreditation and establish that the Abatement Certificate Provider continues to meet the original eligibility criteria for the accreditation (typically a random audit of an Abatement Certificate Provider on a spot audit regime)

 to investigate a potential or suspected non-compliance event

 to determine whether a change in methodology proposed by an Abatement Certificate Provider complies with the requirements of the Act, Regulation and Rules.

The requirement for a spot audit is usually implemented through a change to an Abatement Certificate Provider’s conditions of accreditation, or by using powers under the Regulation and general accreditation conditions to conduct audits at any time.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 39

6 GGAS Registry – registration, ownership and surrender of certificates

Under the Regulations, IPART (as Scheme Administrator) is required to maintain a register of Abatement Certificate Providers and certificate registration and ownership. When the scheme commenced in 2003, we engaged Logica to design a registry that would enable us to fulfil this function. We also appointed the firm to operate the registry. Since then, Logica have continued to work with us, and have managed numerous upgrades to the registry. The most recent upgrade was performed in 2009 to incorporate the ESS, and the registry is now known as the GGAS & ESS Registry.

The sections below provide an overview of the Registry, and data on the trends in certificate registration, transfer and surrender since GGAS commenced. Appendix C provides a detailed breakdown of certificate registration by individual project. Note that data are current as at 30 June 2011 and include all vintages of certificates, up to and including the 2010 vintage (that is certificates registered for abatement that occurred during the calendar years). The totals for certificate registration in prior years may be less than previously reported because some certificates registered have subsequently been forfeited.

6.1 What is the Registry?

The Registry is an online database, which is an important tool for administering GGAS and a valuable source of information for participants. It can be found at https://www.ggas-registry.nsw.gov.au, and can be accessed by all GGAS participants and members of the public. Its basic functions include:

 listing details of accreditations and projects in both GGAS and the ESS

 facilitating registration and transfer of certificates

 listing details and tracking ownership of certificates

 allowing all participants to surrender certificates to meet mandatory obligations or personal offset schemes.

The Registry records information about each abatement certificate, including the entity, Rule and project type associated with it, the vintage and registration date. It also tracks the certificate status (live, surrendered, forfeited) and ownership history.

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6 GGAS Registry – registration, ownership and surrender of certificates

Each certificate represents 1 tonne of carbon dioxide equivalent emissions. All certificates count equally towards meeting a Benchmark Participant’s obligation and once surrendered, cannot be reused.

The Registry imposes a $0.15 charge for the registration of each certificate. This charge is intended to cover the cost of establishing, operating and maintaining the Registry over the life of GGAS, as well as to partially and indirectly fund some of our administration activities. For the 2010 calendar year, revenue from fees imposed on participants (including greenhouse penalty payments) was $3.1 million and exceeded our total (GGAS & ESS combined) net cost of services of $2.1 million.

6.2 Trends certificate registration

A total of 18.5 million NGACs and 1.8 million LUACs were registered for projects undertaken during 2010. As in the past, most of these certificates (84%) were created from projects associated with the Generation Rule.

Table 6.1 shows the number of certificates registered by vintage and by rule since GGAS commenced. It shows there has been an increase in certificates created under the Generation Rule, however, DSA Rule certificate registration has continued to decline. This decline can be attributed to the changes in the DSA Rule over time and the cessation of the energy efficiency component in 2009. There have been slight increases in certificates created under the CS Rule and LUAC Rule.

Since GGAS commenced in 2003, over 129 million certificates have been created.

Table 6.1 Number of certificates registered since 2003 by rule

Vintage Generation Rule DSA Rule CS Rule LUAC Rule Total 2003 6,317,835 345,141 0 0 6,662,976 2004 6,744,232 742,233 166,005 0 7,652,470 2005 7,879,171 1,509,199538,471 94,277 10,021,118 2006 9,548,179 8,932,172587,601 790,460 19,858,412 2007 12,813,473 9,925,197 632,561 1,285,645 24,656,876 2008 12,333,141 8,114,957 669,192 1,298,075 22,415,365 2009 15,457,065 744,916 623,020 1,517,237 18,342,238 2010 17,099,547 690,046 702,644 1,759,380 20,251,617 Total 88,192,643 31,003,8613,919,494 6,745,074 129,861,072

6.2.1 Source of Generation Rule certificates

The Generation Rule is the primary source of abatement certificates, representing 68% of all certificates registered since 2003. However, the number of certificates for each category of generator and each fuel type used in projects accredited under this rule varies considerably.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 41

6 GGAS Registry – registration, ownership and surrender of certificates

Figure 6.1 shows the numbers of certificates registered under the Generation Rule by category of generator. (For information on the different categories, see Appendix B.) It indicates that Category A projects have been a steady source of Generation Rule certificates. However, the number of Category A certificates declined in 2010, due to legislation to cease NGAC creation for this type of abatement activity after 30 June 2010. In contrast, Category D has become an increasingly significant source of Generation Rule certificates over the last 2 years, and is now the dominant source of Generation Rule certificates. Category B remains the lowest source of Generation Rule certificates.

Figure 6.1 Source of Generation Rule certificates by category

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0 Category A Category B Category C Category D

2003 2004 2005 2006 2007 2008 2009 2010

Figure 6.2 shows the number of Generation Rule certificates registered by the 4 most common fuel types. It shows generation projects that involve natural gas18 continued to provide an increasing number of certificates in 2010, and were the dominant source of Generation Rule certificates in 2010. The reasons for this are threefold: 1. Natural gas has historically been used as a peaking fuel for generation, but in recent times it has been increasingly used to provide mid to base load power generation. 2. The extraction of natural gas as fuel, particularly coal seam methane in South East Queensland, has increased substantially in recent years resulting in additional plant being commissioned. 3. Gas generators in Queensland have the option of either participating in the Queensland Gas Scheme or GGAS, as long as they do not claim benefits from both schemes for the same MWh of generation. When prices for GECs are above the trading price for NGACs, companies will create GECs. However, during 2010 the GEC price remained below the price of NGACs, and consequently these generators opted to create NGACs.

18 Coal Seam Methane is treated as Natural Gas under GGAS.

42 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

6 GGAS Registry – registration, ownership and surrender of certificates

Figure 6.2 Source of Generation Rule certificates by major fuel types

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0 Coal Landfill Gas Natural Gas Waste Coal Mine Gas

2003 2004 2005 2006 2007 2008 2009 2010

Table C.7 in Appendix C provides more detailed information on changes in the numbers of Generation Rule certificates by category of generator and fuel type over the life of GGAS.

Generation Rule certificates can be created and registered for abatement activities outside of NSW and the ACT only if the generating system involved is connected to the NSW and ACT electricity grids via the national electricity grid. Figure 6.3 shows the 2009 and 2010 vintage Generation Rule certificates by the jurisdiction in which the abatement activities took place. It indicates that activities in Queensland were the largest source of Generation Rule certificates in 2010.

Table C.8 in Appendix C provides more detailed information on changes in the numbers of Generation Rule certificates by jurisdiction.

Figure 6.3 Source of Generation Rule certificates by jurisdiction

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% NSW QLD VIC SA TAS ACT 2009 2010

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 43

6 GGAS Registry – registration, ownership and surrender of certificates

6.2.2 Source of DSA Rule certificates

As previously noted, since 1 July 2009, certificate creation under the DSA Rule is only allowed under the Generation Emissions Method (embedded generation). The number of Generation Emissions Method certificates registered has remained consistent, increasing slightly almost every year (Figure 6.4). In addition, almost all of these certificates have been created though on-site generation projects in the industrial sector.

Tables C.9 and C.10 in Appendix C provide more detailed information in the numbers of DSA Rule certificates created.

Figure 6.4 Certificate creation under Generation Emissions Method (DSA Rule)

800,000 700,000 600,000 500,000 400,000 300,000 200,000 Number of certificates Number of 100,000 0 2003 2004 2005 2006 2007 2008 2009 2010 Vintage

6.2.3 Source of CS Rule and LUAC Rule certificates

With only a small number of Abatement Certificate Providers and consistent certificate creation each year, further breakdown of CS Rule and LUAC Rule creation is not included here. For creation history by accreditation, refer to Appendix C, tables C.36 and C.37.

44 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

6 GGAS Registry – registration, ownership and surrender of certificates

6.3 Certificates surrendered

Table 6.2 and Figure 6.5 show the trends in certificates surrendered and the balance of certificates that remain ’live’ and available for transfer.

Table 6.2 Total certificates surrendered and balance to be surrendered by vintage/compliance yeara

Certificate vintage/ Certificates Certificates Balance to be Compliance Year registered surrendered surrenderedb 2003 6,662,976 1,166,866 5,496,110 2004 7,652,470 5,037,847 8,110,733 2005 10,021,118 8,322,356 9,809,495 2006 19,858,412 12,424,062 17,243,845 2007 24,656,876 17,336,184 24,564,537 2008 22,415,365 22,671,606 24,308,296 2009 18,342,238 23,297,876 19,352,658 2010 20,251,617 18,854,443 20,749,832 a Includes surrenders to ACT Compliance Regulator and voluntary surrenders as shown in Table 6.3. b Accumulated values.

Figure 6.5 Total certificates surrendered and balance to be surrendered by vintage/compliance yeara

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0 2003 2004 2005 2006 2007 2008 2009 2010

Certificates registered Certificates surrendered Balance to be surrendered a Includes surrenders to ACT Compliance Regulator and voluntary surrenders as shown in Table 6.3.

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 45

6 GGAS Registry – registration, ownership and surrender of certificates

6.4 Certificates voluntarily surrendered

The Registry allows any member of the public to own certificates which can be surrendered to offset emissions – this process is known as voluntary certificate surrender. For 2010, a total of 354,008 certificates were voluntarily surrendered by 25 organisations and individuals. This is more than in 2009. Although, voluntary surrenders have varied from year to year, the total number of certificates voluntarily surrendered has been high in recent years. Since the start of GGAS, a total of 1,154,353 certificates have been voluntarily surrendered (Table 6.3).

Table 6.3 Total certificates voluntarily surrendered

Compliance year Generation Rule DSA Rule CS Rule Total 2003 0 0 0 0 2004 0 0 0 0 2005 5,000 100 0 5,100 2006 0 1,3971,263 2,660 2007 10,853 32,5936,452 49,898 2008 383,469 72,70131,920 488,090 2009 120,211 130,5853,801 254,597 2010 160,123 186,8807,005 354,008 Total 679,656 424,25650,441 1,154,353

6.5 Certificate transfers

The Registry tracks the ownership of each certificate over time. It provides a summary of transfer activity undertaken in any month, reporting the total number of transfers and the total number of certificates transferred. The Registry records a transfer as the change in ownership of certificates between any 2 owners, irrespective of any other relationship that may exist between the parties. Thus, it includes transactions such as a subsidiary company transferring certificates to its parent entity.

During 2010, there were 1,187 transfers of certificates between parties (Table 6.4), involving more than 28.8 million certificates (some of which may have been transferred on multiple occasions) (Table 6.5 and Figure 6.6). Transfers of DSA Rule certificates fell, in line with the drop in certificate creation under this Rule, while transfers of both Generation Rule and CS Rule certificates continued to increase. Note that the data in these tables represents the number of certificates transferred within each calendar year, not by vintage.

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6 GGAS Registry – registration, ownership and surrender of certificates

Table 6.4 Number of transfers by Rule

Year Generation RuleDSA Rule CS Rule Total 2003 7 2 0 9 2004 92 16 0 108 2005 145 48 32 225 2006 227 164 294 685 2007 344 286 1,149 1,779 2008 469 406 905 1,780 2009 758 163 680 1,601 2010 886 44 257 1,187

Table 6.5 Number of certificates transferred by Rule

Year Generation RuleDSA Rule CS Rule Total 2003 707,774 18,001 0 725,775 2004 4,795,183 220,506 0 5,015,689 2005 5,296,564 667,992 142,320 6,106,876 2006 11,106,265 8,877,153 178,046 20,161,464 2007 12,792,636 11,648,409 986,884 25,427,929 2008 13,552,555 16,875,483 167,559 30,595,597 2009 22,502,617 10,031,705 1,260,683 33,795,005 2010 24,738,807 2,323,539 1,747,760 28,810,106

Figure 6.6 Total certificates transferred each year

35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0 2003 2004 2005 2006 2007 2008 2009 2010

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 47

7 Supply and demand for certificates

We monitor and annually publish information on the supply of and demand for certificates. Please note that we do not undertake forecast modelling – rather, we project the supply of certificates based on information provided by existing and prospective participants and some conservative assumptions. In addition:

 We derive base data on supply from the expected creations nominated by accredited parties, future projects and remaining applicants19. Our modelling does not account for growth in demand for certificates from voluntary carbon markets.

 We calculate demand using the key factors published each year by the Compliance Regulator20 and the best publicly available data on expected electricity consumption and population growth. However, this publicly available data is a year out of date at the time we publish our annual report (and more recent data are not yet available).

Historical creation of certificates by all Abatement Certificate Providers is publicly accessible on the GGAS & ESS Registry. The availability of this data should assist market participants to undertake their own projections of supply and demand.

The sections below outline the developments that occurred in 2010 that may influence supply and demand for certificates in 2011 and beyond, the assumptions and scenarios we used for projecting the supply and demand for certificates in coming years, and the results of these projections. The final section discusses our projections for the NSW Pool Coefficient (which are a key input for our projections of NGAC demand and supply).

19 Due to legislative changes introduced in December 2009, GGAS did not accept applications for accreditation after 1 January 2010. However a subsequent legislative change on 3 March 2011 re- opened the scheme to new applicants for existing accredited projects (if, for example, the latter are being sold). As such, no new projects are being accepted for accreditation. 20 Refer www.greenhousegas.nsw.gov.au/benchmark/key_factors.asp - Key Factors are used in the calculation of individual greenhouse gas benchmarks for Benchmark Participants.

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7 Supply and demand for certificates

7.1 Developments in 2010 that may influence future supply and demand

In our 2009 report on compliance and operation of GGAS, we projected that NGAC supply, which peaked in 2007, would decline through to 2009 (dipping below demand in 2009), before again exceeding demand in 2010 and future years. However, we noted that the existing surplus of supply from 2003-2007 would assist in meeting projected demand in 2010 and future years.

Twelve months on, this projection has been largely realised, even though several unforeseen developments affected certificate creation in 2010:

 First, all certificate creation from Category A generation activity under the Generation Rule ceased on 30 June 2010, due to the amendment of the Regulation (see section 2.3). This led to a decrease in the number of Category A certificates created for 2010.

 Second, a number of small and large-scale generating systems either commenced or came into full operation during 2010, collectively projecting high volume certificate creation. The higher number of certificates these accreditations created all but offset the decline in Category A certificate creation in 2010, and will more than offset this decline in future years.

The impacts of these 2 developments on certificate creation largely balanced themselves out during 2010, although there was a slight overall decrease in 2010 supply compared to our 2009 projection.

The sections below provide a non-exhaustive list of other events and developments that affected the supply and demand for certificates and the NGAC price in 2010 and may affect them in future years.

7.1.1 Other events and developments affecting supply in 2010 and beyond

 15 applications for accreditation were approved in 2010 and 68 accreditations21 were cancelled.

 36 accreditations were amended, resulting in both increases and decreases in potential certificate creation for individual accreditations, but an overall increase in supply.

 As in previous years, the majority of certificates created in 2010 were for accreditations under the Generation Rule. Given the cessation of energy efficiency related activities under the DSA Rule in mid-2009, this trend will continue into the future.

21 58 of the 68 being energy efficiency related projects under the DSA Rule, for which eligibility ceased in July 2009 (due to commencement of the Energy Savings Scheme). The remainder were all Generation Rule related with the exception of one LUAC Rule accreditation cancellation.

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7 Supply and demand for certificates

 The development and implementation of the few remaining future projects was delayed, accelerated or in some cases abandoned. This affected the timing of certificate creation in 2010 and in some cases influences the projections of certificate supply in future years.

 GGAS was closed to new applications for accreditation (from 1 January 2010), although new applications will be accepted in respect of previous accreditations. This will prevent the potential supply of certificates from new accreditations.

7.1.2 Other events and developments affecting demand in 2010 and beyond

 In its New South Wales Annual Planning Report 2010,22 TransGrid revised its projections of future electricity demand upward compared to those in its 2009 Annual Planning Report. This resulted in an increase in projected NGAC demand due to an accordant rise in the total greenhouse benchmarks. The projections for electricity demand in TransGrid’s Annual Planning Report 2010 reflect assumptions about the impact of the global economic recovery on electricity consumption, and improved business and consumer confidence. The assumptions also include price forecasts that take into account the effect of a delayed introduction of a national scheme on 1 July 2011.23 However, the Australian Parliament did not pass the legislation related to this scheme, and the Federal Government has since announced its intention to introduce a Carbon Pricing Mechanism from 1 July 2012. Therefore, the projections in the TransGrid Annual Planning Report for 2011 may differ from those used for our demand projections. (The TransGrid report for 2011 was not available when this report was prepared.)

 The NSW Pool Coefficient is projected to continue to increase but at a slightly slower rate for a period into the future (see section 7.5 for more detail).

 Due to the adjustment for energy savings from previous DSA Rule certificate creation used in the calculation of the annual GGAS compliance obligations (see Box 3.1) and the lower level of DSA Rule NGAC creation in 2008 compared with previous years, NGAC demand in 2010 was lower than in 2009. Similarly, the major reduction in DSA Rule NGAC creation after 1 July 2009 (due to the cessation of energy efficiency programs under GGAS) will result in significantly lower demand in 2011 and 2012 compared with previous years.

22 See Table A3.1 of the TransGrid NSW Annual Planning Report 2010, available at www.transgrid.com.au/network/np/Pages/default.aspx 23 Refer section 4.2 of TransGrid’s NSW Annual Planning Report 2010 www.transgrid.com.au/network/np/Pages/default.aspx

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7 Supply and demand for certificates

7.1.3 Other events and developments affecting the price of NGACs in 2010 and beyond

Following a record low in the spot price for NGACs in early 2009 (~$3.00), the price recovered to ~$5.00 at the start of 2010 and remained fairly stable until August 2010. From early September 2010, and again in October 2010, the spot price rallied through to January 2011 (when it reached a peak of $7.40), after which it declined to its current level of ~$3.50, as at 30 June 2011 (Figure 7.1).

It is clear that the NGAC price declines and intermittent recoveries over the past few years (in contrast to 2003 to 2006, the early years of GGAS), generally reflected the uncertainty in the market about the introduction of a national carbon price signal. For example, the following factors appear to have significantly affected this price since 2007:

 the initial April 2007 election announcement that a national trading scheme (the CPRS) was to commence in July 2010

 the subsequent announcement in May 2009 that the introduction of the CPRS was to be delayed by one year to July 2011

 the uncertainty around the date, and manner, in which existing accreditations in GGAS might transition to a national scheme and which parties would be compensated

 the failure to pass the CPRS through the Senate in December 2009, and the subsequent announcement in April 2010 that the CPRS would be deferred until after 2012, and

 market perceptions of a continuing surplus of NGACs in later years following the creation of large volumes of DSA NGACs in 2007 and 2008.

We do not have responsibility for regulating the trading of certificates. However, Box 7.1 reproduces market commentary from The Green Room, a weekly report of spot trades published by Next Generation Energy Solutions.

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7 Supply and demand for certificates

Box 7.1 Market commentary from Next Generation Energy Solutions, The Green Room, Editions 236-285

January – April 2010: The lack of price volatility since mid-2009 remained, with spot market prices declining gradually from just below $5.00 in January to reach a year low of $4.55 in late April. This decline most likely reflected market uncertainty regarding compensation for unused NGACs being held by parties (upon transition to a proposed CPRS).

May – October 2010: The NGAC market revived at the start of May with spot market trades trading up to an 8 week high of $4.75. This revival directly followed the Commonwealth’s announcement that introduction of the CPRS would be delayed until post 2012. NGAC prices continued to climb until mid October, reaching a peak of $7.20 possibly on the back of speculation for an ‘expanded GGAS’ due to collapse in progress for a national trading scheme. However the following week the price fell 10% to $6.40 possibly due to speculation that the Commonwealth will introduce a carbon price before the next election.

November – December 2010: The spot NGAC price rallied again in the second week of November (to $7.15), possibly in response to an announcement by the NSW government for a review of GGAS. Prices then crept higher to a year peak of $7.35 in late December, possibly on the back of speculation as to whether any decision to expand GGAS (in the absence of a national carbon scheme), or alter targets, will have some fundamental impact on the existing market.

Figure 7.1 illustrates the trends in the NGAC spot price from the inception of GGAS to 30 June 2011. However, the price recorded for spot trades constitutes only a small proportion of total NGAC transactions. Most NGAC transactions are bilateral trades, where the price may be agreed in advance for an extended period. The NGAC prices for such transactions are not disclosed and may differ significantly from the prevailing spot price. Nevertheless, the spot price provides a useful publicly available guide to broad movements in the NGAC price over time.

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Figure 7.1 Trends in the NGAC spot price 2003 to 2011

$25.00

$20.00

$15.00

$10.00 NGAC Price Price NGAC

$5.00

$0.00 Jul 04 Jul 06 Oct 03 Oct 05 Oct 07 Oct 09 Jan 11 Jun 11 Dec 04 Dec Feb 04 Feb Dec 06 Dec 08 Dec Mar 06 Mar Mar 08 Mar 10 Mar Aug 08 Aug 10 May 05 May May 07 May 09 May Four week rolling average Penalty

Note: This figure shows a 4 week rolling average of the last market spot price. This data accounts only for NGACs traded through NGES and may not reflect the price paid by NGAC buyers at the times shown. The Scheme Administrator recommends that persons seek independent advice before buying or selling NGACs, and cautions against making decisions based solely on this chart. Data source: The Green Room, published by NGES (see www.nges.com.au).

As Benchmark Participants were required to pay a greenhouse penalty of $14.00 per tCO2-e if they failed to meet their calendar year 2010 annual compliance obligation, the effective certificate price ceiling was $20. This certificate ceiling price is calculated on the basis of the prescribed, and CPI adjusted, penalty (as per Section 97CA of the Act), and is inclusive of company tax (as payment of the penalty is not tax deductible, unlike the purchase of certificates).

7.2 Assumptions we used in projecting supply and demand for certificates

Given the current uncertainty about the establishment and commencement of a national Carbon Pricing Mechanism and/or national emissions trading scheme, we projected supply and demand for certificates for the period 2011 to 2014 assuming continuation of GGAS under the current rules. We also assumed that the annual NSW Pool Coefficient for this timeframe will be in line with our mid-range forecasts for the NSW Pool Coefficient, which are discussed in section 7.5.1. In addition, we used a range of additional assumptions, which are discussed in the sections below.

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7.2.1 Additional assumptions used in projecting supply

We derived the base data for projecting the supply of certificates from Abatement Certificate Providers’ calculations of the number of certificates they expect in 2011 to 2014. For accredited projects, this number generally reflects either the nominated number of certificates shown in the Accreditation Notice, the latest forecasts provided in Abatement Certificate Provider annual reports, or historical averages of annual creation. Once these certificates are registered, the actual numbers are used. For future projects and remaining applicants, the number reflects the expected creation pattern, based on the participant’s own calculations.

We then adjusted the base data in line with the following conservative assumptions:

General

 There will be no further applications for accreditation for new projects after 1 January 2010.

Generation Rule

 Queensland Gas Electricity Scheme: Queensland generators eligible to create GECs under the Queensland Gas Scheme will prioritise NGAC creation over GECs. Historically, GECs have traded at a higher value than NGACs, but this has not been the case since October 2009 when spot prices for GECs fell below the $4.00 level (with current spot prices around the $3.00 level). We assumed those using waste coal mine gas (WCMG) as fuel, in particular, will continue to prioritise NGACs over GECs (as WCMG attracts an additional NGAC benefit, in recognition of waste methane emissions avoided).

 Renewable Energy Target: A number of projects accredited to create NGACs are also accredited to create RECs under the RET scheme. These generators must choose between creating an NGAC or REC, for each eligible MWh of generation. We assumed these generators will claim the maximum REC entitlement due to the significant price differential between RECs and NGACs24.

 Deemed retailers: Recent legislative changes to the Act have resulted in all Category A generators ceasing to be eligible as of 1 July 2010. We have accounted for this reduction in NGAC supply (from both the deemed retailer and generator, in respect of the Category A plant) in our projections.

24 As of 1 January 2011, the enhanced Renewable Energy Target (RET) was split into 2 parts, the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). Both targets create certificates known as LGCs and STCs respectively, however they are still identified as RECs for the purpose of GGAS.

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DSA Rule

 We assumed no NGACs will be created from energy efficiency accreditations, in line with the commencement of the ESS (see section 4.6.2).

 We assumed that all NGACs created under the DSA Rule will come from on-site power generation (which represent only a small proportion of the historical annual total of DSA creation).

LUAC & CS Rules

 Despite not being tradeable, we treated LUACs as equivalent to NGACs for the purposes of projections. We made no further assumptions, and projections are based on existing accreditations.

 We made no assumptions in relation to CS Rule certificates, and projections are based on existing accreditations.

7.2.2 Additional assumptions used in projecting demand

For projecting demand, we made the following additional assumptions:

 Population: We assumed population will be in line with mid-range estimates of the NSW and ACT population, as published by the Australian Bureau of Statistics.25

 Electricity demand: We assumed electricity demand will be in line with mid- range estimates for NSW and the ACT, as published by TransGrid26. These are stated to take account of the impact of the ESS on electricity demand.

 Distribution Loss Factors: We projected distribution loss factors based on the actual weighted average from the returns of 2010 benchmark statements.

 Renewable Energy Target: We assumed the number of RECs27 counted will rise incrementally based on expected increases in electricity demand and the renewable power percentage.28

25 ABS Catalogue Number 3222.0, Population Projections Australia 2006 to 2101, latest issue 4 September 2008. 26 TransGrid Annual Planning Report 2010, see www.transgrid.com.au/network/np /Pages/default.aspx 27 In addition to surrendering NGACs or LUACs, Benchmark Participants are permitted to account for RECs surrendered under the Commonwealth Scheme (Renewable Energy (Electricity) Act 2000 (Cth)). Only RECs associated with electricity purchases in NSW and the ACT can be counted. 28 This is the process for determining the actual number of RECs which must be surrendered each year to discharge a liability, as specified in the Renewable Energy (Electricity) Regulations 2001 (Cth).

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7.3 Scenarios for which we projected supply and demand for certificates

We projected supply for certificates in future years under 2 different scenarios, and projected demand under one scenario. The scenarios for supply reflect our knowledge of the potentially variable sources of supply for certificates, and are briefly described below:

 Scenario 1: The projected supply of certificates under Scenario 1 is based on the abatement expected to be achieved by existing accreditations only, and excludes all future projects. This scenario is the low-range projection.

 Scenario 2: The projected supply of certificates under Scenario 2 includes all Abatement Certificate Providers, as well as accredited future projects (assuming that commencement of operation will be achieved as scheduled by the project proponent), plus the single remaining application for accreditation29. This scenario is the upper-range projection.

The single scenario for projected demand is based on:

 mid-range estimates of future NSW pool coefficient values and population growth

 legislated figures for Renewable Power Percentage and Required GWh of renewable energy source electricity30, and

 weighted average Distribution Loss Factors from Benchmark Participant compliance statement returns.

7.4 Results of our projections for supply and demand from 2011 to 2014

Figure 7.2 shows the actual levels of supply and demand for abatement certificates since GGAS began, and our projections for supply and demand over the period 2011 to 2014. The data are for the NSW and ACT schemes combined, and are current as at 30 June 2011.

29 GGAS is closed to new participants, refer to Section 2.2 for further information. 30 Refer to Commonwealth’s Renewable Energy (Electricity) Act 2000 and Renewable Energy (Electricity) Regulations 2001.

56 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

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Figure 7.2 IPART’s projections for supply and demand for abatement certificates under GGAS, until 2014

10 Certificates (millions)

- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Compliance year

Scenario 1 Scenario 2 Annual Demand

Note: As at 30 June 2011.

The projection of supply and demand is sensitive to small movements in some of the key factors used in determining the NSW and ACT greenhouse gas benchmarks. In addition, the continuing uncertainty about treatment of RECs (now that the Renewable Energy Target terminology refers to LGCs and STCs) and the timing and nature of a national Carbon Pricing Mechanism, as well as the transition of GGAS participants to a national scheme, increases the uncertainty of the current projections. Therefore, we caution people against making decisions based on the supply and demand projections shown in Figure 7.2.

The sections below explain these projections in detail.

7.4.1 Projected supply

Over the period 2003 to 2010, supply rose to a peak in 2007, and then declined to 2009. The peak in 2007 was created by the strong growth in abatement from energy efficiency activity under the DSA Rule during 2005 to 2007, particularly those relating to the distribution of compact fluorescent lamps. The decline to 2009 was created by the significant decline in this activity in late 2008 due to an amendment to the DSA Rule, with little activity occurring in the first 6 months of 2009 (prior to commencement of the ESS). Despite a modest rise from 2009 levels, supply still remains below the 2007 peak due to the cessation of energy efficiency related activity after 1 July 2009, and the cessation of Category A generation after 1 July 2010.

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However, as Figure 7.2 shows, our projections under both scenarios suggest that supply will continue to rise in 2011 before peaking in 2012, and then plateauing. This reflects the expected continued steady growth in abatement activity under the Generation Rule.

Under Scenario 1, we project a moderate increase in supply through 2011 to 2012, primarily due to some large-capacity generation projects being accredited in late 2010 and early 2011, as well as continued efficiency improvements and/or increased generation capacity. Supply then stabilises at the 2012 level due to no new applications being accepted after 1 January 2010 (as a result of changes to the Regulation31).

Under Scenario 2, we project a more significant increase in supply through 2011 rising to a new peak in 2012. This is largely due to the implementation and commissioning of currently accredited future projects, including 8 future projects proposed to commence operation in the 2011-14 period (4 being large-scale power stations). Assuming these future projects commence as scheduled, they more than compensate for any reduction in supply resulting from the removal of energy efficiency and Category A generation. It should be noted that supply from current applicants will be insignificant, as there is only one application pending an accreditation decision, with GGAS closed to new applications. As under Scenario 1, supply then stabilises at 2012 levels (or marginally above).

7.4.2 Projected demand

From 2003, the demand for abatement certificates increased until it peaked during calendar year 2009, and then declined markedly in 2010. Our projections indicate that demand will continue to decline gradually through to 2011 before stabilising over future years. The decline can primarily be attributed to:

 the NSW Greenhouse Gas Benchmark holding steady at 7.27t CO2-e per capita, despite population and electricity demand increases

 a steadying out of the NSW Pool Coefficient (average intensity of emissions in CO2-e gases per MWh of electricity, see Section 7.5) which is expected to remain relatively static to 2014, and

 the effective cessation of the adjustment for energy savings from past DSA Rule certificate creation after calendar year 2010 and onwards, as a direct result of the decreasing level of DSA Rule NGAC creation during late 2008 and early 2009, and the subsequent cessation of all energy efficiency related activity after 1 July 2009 (see Box 3.1).

31 Although no new applications are being accepted, applications for accreditation in respect of existing accredited projects (due to change of ownership etc) are accepted. Assuming the new owner is subsequently accredited the supply model will remain unaffected, as the re-accredited project’s supply forecasts are expected to remain largely unchanged.

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Although the per capita benchmark is expected to remain steady during the coming years, population is predicted to rise faster than demand for energy. In addition, the Renewable Power Percentage will only marginally decrease in 2011 (meaning Benchmark Participants can continue to surrender a large number of RECs in place of NGACs).

7.4.3 Projected balance between supply and demand

Under both supply scenarios, the projected annual supply of certificates is higher than the projected annual demand from 2011 onwards (Figure 7.2). As certificates do not expire, and those created for a particular vintage can be surrendered against a compliance obligation for any year thereafter,32 the surplus of supply experienced in the first 6 years (see Figure 7.3 below) will significantly exceed projected demand from 2011 onwards.

Figure 7.3 IPART’s projections for cumulative surplus and annual demand for abatement certificates under GGAS, until 2014

20 Certificates (millions)

- 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Compliance year

Annual Demand Scenario 1 Surplus Scenario 2 surplus

Note: As at 30 June 2011.

32 For example, a certificate of 2004 vintage may be surrendered against a compliance obligation in any year from 2004 onwards.

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7.5 Projected values for the NSW Pool Coefficient

One of the key inputs for our supply and demand projections is the projected NSW Pool Coefficient for each year of the projection timeframe. The NSW Pool Coefficient is an indicator of the average emissions intensity of electricity sourced from the National Electricity Market for use in NSW. It represents the emissions of greenhouse gases (in tonnes of carbon dioxide equivalent) per MWh of electricity supplied from the ’pool’ of major power stations serving the NSW electricity grid (Category B Generators).

The NSW Pool Coefficient influences the supply and demand for certificates, as it is used in calculating Benchmark Participants’ GGAS obligations (or ‘attributable emissions’), as well as the number of certificates an Abatement Certificate Provider can create from an accredited project.

As Scheme Administrator, we calculate and announce the NSW Pool Coefficient for each upcoming compliance year in November of the preceding year.33 This involves:

 Calculating the simple average of the Annual Pool Values for the previous 5 years, lagged by 2 years. Averaging smooths the impact of any one-off highs or lows in the Annual Pool Value in a particular year and thus makes it more stable and predictable. The 2-year time lag reflects the practicalities of obtaining data and calculating and publishing the NSW Pool Coefficient in advance of the year to which it applies.

 Adjusting this value by adding back emissions for which abatement certificates have been created from on-site generation under the DSA Rule. This is necessary to avoid double counting this abatement benefit.

The Annual Pool Value (used in determining the NSW Pool Coefficient) is calculated using Method 1 of the Compliance Rule. In any year, the Pool Value is the average intensity of emissions of greenhouse gases per unit of electricity sent to the NSW grid by Category B generators, and via the interconnectors to Queensland, Victoria and South Australia. Emissions data is supplied by the generators and electricity sold data is supplied by the Australian Energy Market Operator (AEMO).

7.5.1 NSW Pool Coefficient for 2011

We calculated the NSW Pool Coefficient for 2011 by averaging the Annual Pool Values for the previous 5 years, lagged by 2 years (ie, 2005 to 2009). The Annual Pool

Value for 2009 was 0.988t CO2-e/MWh, which was 0.5% higher than in the previous year.

33 The NSW Pool Coefficient is determined pursuant to clause 9.1 of the Compliance Rule.

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Broadly speaking, this increase in the Annual Pool Value was because the fall in the total emissions attributable to the NSW pool (3.9%) was less than the fall in energy sent out (4.4%). However, a range of other factors also influenced this value:

 Combustion emissions fell by 5.6%. This was due to a 0.3% decrease in the total energy content of coal burned in power stations and a 5.5% decrease in the tonnes of coal burned, which were partially offset by a 0.4% increase in the average combustion intensity of coal (as a consequence of normal variation in chemical composition of coal mined).

 Fugitive emissions fell by 1.1%, due to a decrease in coal consumption and the methane intensity of the coal mined.

 The number of NGACs created by Category B generators fell by 29.3%.

 Although the quantity of electricity imported from outside NSW fell to 7.1% (down from 18.5% in the previous year), the emissions attributed to this electricity increased by 15.7%. This was because most of the imported electricity came from the Vic/SA grid. This grid generally has higher emissions intensity, and this intensity increased from 4% in 2008 to 28% in 2009. As a consequence, the weighted average emissions intensity of imported electricity increased by 8% in 2009 (as compared to 2.9% in 2008).

 Hydro contributed 4.4% of NSW electricity sent out in 2009, up from ~3% in calendar years 2007 and 2008 but still well below the share in 2006 (5.5%) and 2005 (7.8%). The electricity generated from the Snowy Mountains hydro-electricity scheme in 2009 was 20% higher than in 2008, but well short of the long term average (for which 2005 was the last near average year).

The resulting NSW Pool Coefficient for 2011 was 0.975 tCO2-e/MWh which was approximately 0.2% higher than 2010.

Figure 7.4 shows the historical trends in NSW Annual Pool Values and Pool Coefficients.

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Figure 7.4 Historical NSW Annual Pool Value and Pool Coefficient 1999-2011

1.000

0.980

0.960

0.940 0.920

0.900 tCO2-e MWh per 0.880

0.860 0.840 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Pool Value Pool Co-efficient

7.5.2 Forecast NSW Pool Coefficients for 2012 to 2014

Our forecast NSW Pool Coefficients for 2012 to 2014 are as shown in Figure 7.5. These forecasts are estimates only, and we caution against making decisions based on them. The purpose of these estimates is to give an indication of the possible trend in the Pool Coefficient.

In making our forecast, we assumed that the existing Category B generators will continue to supply a similar level of Net Sent Out Generation. Under the Generation Rule, if a major new base-load power station is built (whether in NSW or elsewhere), it would be a Category D generator, and would only impact on the Annual Pool Value if it reduced the energy sent out from Category B generators. The actual effect would depend on the timing and size of any new power station constructed.

Note that the forecast is most sensitive to assumptions about Snowy Hydro output34 and the source of imports35, but less sensitive to assumptions about rates of growth in Net Sent Out Generation and the generation intensity of Category B power stations. In addition, an upward trend in the NSW Pool Coefficient is already locked in for the next 12 months because of the historical rising trend in the Annual Pool Values from 2004 to 2009, with each new Annual Pool Value added to the series being higher than the value removed. The rate of rise will be slightly lower in future years, because the increase in Annual Pool values from 2007 to 2009 was much less than in 2004 to 2006.

34 Any reductions in Snowy Hydro electricity output due to the drought which persisted until Oct 2010 will have an upward pressure on the NSW Pool Coefficient, but may be offset by a return to more favourable weather patterns for water storage in 2011 and future years. 35 Electricity generated in other states generally has an average emissions intensity that is higher than NSW.

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Figure 7.5 Forecast of the NSW Pool Coefficient until 2014

Actual and projected Pool Coefficients for NSW

1.000 0.980 0.960 0.940 0.920 tCO2-e 0.900 0.880 0.860 0.840 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Actual Projected

Our forecast suggests that the NSW Pool Coefficient will increase marginally to approximately 0.98t CO2-e/MWh by 2012, then remain at that level to 2014. This forecast is based on the following key assumptions:

 the majority of electricity comes from NSW baseload coal generation but the trend is marginally downwards from 2010, principally due to operational limits without major rebuilding of aging plant

 Snowy-Hydro’s output remains below the long term average

 net electricity imports from interstate continues, particularly a linear increase from Vic/SA which has a significantly higher greenhouse gas intensity level than NSW.

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Appendices

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66 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

A Overview of GGAS

GGAS was one of the world’s first mandatory greenhouse gas emissions trading schemes when it commenced in 2003. Its objectives are to reduce greenhouse gas emissions associated with the production and use of electricity, and to develop and encourage the reduction of greenhouse gas emissions from non-electricity related activities.

GGAS commenced under the Electricity Supply Act 1995 on 1 January 2003 in NSW and operates on a calendar year cycle. Following passage of complementary legislation in the Australian Capital Territory Legislative Assembly, GGAS commenced in the ACT on 1 January 2005. Originally called the Greenhouse Gas Abatement Scheme, the Scheme was renamed in NSW in early 2007 by the then Minister for Energy as the Greenhouse Gas Reduction Scheme, but continues to be known as GGAS.

GGAS can be characterised as a ’baseline and credit’ form of emissions trading. This means that credit is given where current greenhouse performance improves below prior practice, business as usual or, in some cases, current industry practice. Consequently, GGAS requires a comprehensive understanding of past performance from which the baseline can be formed.

GGAS requires NSW and ACT electricity retailers and certain other parties, collectively referred to as Benchmark Participants, to meet mandatory targets for reducing or offsetting the emission of greenhouse gases from the production of the electricity they supply or use. Benchmark Participants must reduce the emissions of the electricity they supply or use to the level of their greenhouse gas benchmark each year.

Figure A.1 illustrates the structure of GGAS and its key participants. The sections below provide more information on key elements of GGAS, including:  Legislative framework  Functions of Compliance Regulator and Scheme Administrator  Greenhouse gas benchmarks  Benchmark Participants  Abatement Certificate Providers  The Registry  GGAS Rules, and  NSW Energy Savings Scheme.

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A Overview of GGAS

Figure A.1 Structure of GGAS and key participants

MINISTER Operation report Compliance report

Supply side Demand side

IPART IPART (NSW) as and ICRC Scheme (ACT) Administrator as Compliance Accredited Benchmark Regulators Abatement Participants Certificate Trading Providers activities

Audit Audit panel panel

Registry

Note: IPART’s role is shown in the red boxes.

A.1 Legislative framework

In NSW, GGAS is created by a legal and technical framework through Part 8A of the Electricity Supply Act 1995 (the Act), the Electricity Supply (General) Regulation 2001 (the Regulation), and 5 Greenhouse Gas Benchmark Rules36 (the Rules) made by the Minister for Energy.

The ACT Government introduced a Greenhouse Gas Abatement Scheme by passing the Electricity (Greenhouse Gas Emissions) Act 2004 (ACT). This legislation mirrors the equivalent NSW legislative provisions and facilitates the operation of what is, in many respects, a single Scheme across both jurisdictions.

IPART undertakes the functions of Scheme Administrator for both NSW and the ACT. This means that a single Registry operated by IPART as Scheme Administrator tracks creation, ownership and surrender of certificates. All applications for accreditation as an Abatement Certificate Provider are considered by IPART as Scheme Administrator and are assessed against the relevant Rules made under the Act.

36 The 5 Rules are: No. 1 – Compliance, No. 2 – Generation, No. 3 – Demand Side Abatement, No. 4 – Large User Abatement Certificates, No. 5 – Carbon Sequestration.

68 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

A Overview of GGAS

The relevant ACT and NSW legislation specifies the functions of the Compliance Regulator for GGAS (the Independent Competition and Regulatory Commission (ICRC) in the ACT and IPART in NSW). These include ensuring that electricity retailers in the ACT and NSW meet legislated targets by surrendering certificates to offset emissions, and reporting on compliance outcomes to the relevant jurisdictional Ministers.

In NSW, the former Department of Industry and Investment (DII) has responsibility for developing the policy framework for GGAS and consulting on proposed changes to the Rules. IPART then applies those Rules in its roles as Scheme Administrator and Compliance Regulator.

From our experience with administering GGAS, we may suggest changes to the Rules. The suggestions are independently assessed by DII and if a suggestion is considered to have merit, DII will assume responsibility for its incorporation in the relevant Rule, including industry wide consultation and Ministerial approval.

A.2 Functions of Compliance Regulator and Scheme Administrator

IPART has 2 main functions under GGAS. The first of these, Compliance Regulator, relates to our current role as Licence Regulator for energy licence holders in NSW. The second, Scheme Administrator, relates to our role administering GGAS as a whole. These functions are set out in Sections 97H to 97I of the Act.

Compliance Regulator functions

The Tribunal conducts certain core functions of GGAS, such as:

 determining the NSW Pool Coefficient, which is the average emissions intensity of all electricity supplied to NSW customers in a particular year

 monitoring and reporting to the Minister on Benchmark Participants’ compliance

 imposing penalties on Benchmark Participants if they fail to meet their benchmarks.

Scheme Administrator functions

Our role as Scheme Administrator includes:

 assessment of applications for accreditation as an Abatement Certificate Provider

 accreditation of providers to undertake eligible projects and to create certificates from those projects

 monitoring compliance of Abatement Certificate Providers by conducting independent audits

 managing the GGAS & ESS Registry – an online database which records the registration, transfer and ultimate surrender of certificates

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A Overview of GGAS

 monitoring and reporting to the Minister on Abatement Certificate Provider’s compliance with GGAS Rules and their conditions of accreditation.

IPART currently acts as the Scheme Administrator, but the Minister may appoint an alternate organisation to perform some or all of the Scheme Administrator’s functions.

A.3 Greenhouse gas benchmarks

GGAS sets annual per capita benchmarks for greenhouse gas emission reductions by the NSW electricity sector as a whole (the Electricity Sector Benchmarks). The Compliance Rule37 also establishes a framework for converting these electricity sector benchmarks into annual benchmarks for each Benchmark Participant.

Since 2007, the benchmark has been constant at 7.27 tonnes of carbon dioxide equivalent (tCO2-e) of greenhouse gas emissions per capita in NSW. The benchmark progressively decreased to this per capita level from 8.65 tonnes when GGAS commenced in 2003. Unless amendments are made to reduce the target, it will remain at this level until GGAS terminates.

Figure A.2 illustrates how the benchmark has changed since GGAS commenced in 2003.

Figure A.2 NSW Benchmark targets (2003-12)

9.0

8.5 8.65

8.0 8.31 7.96 7.5 7.62 tCO2e per capita tCO2e 7.0 7.27

6.5 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Calendar year

37 Greenhouse Gas Benchmark Rule (Compliance) No. 1 of 2003.

70 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

A Overview of GGAS

A.4 Benchmark Participants

The Act imposes benchmark targets on all NSW electricity retail suppliers, certain generators and all market customers38. These companies are known as Benchmark Participants. In addition, large electricity customers39 with electricity loads greater than 100GWh and those carrying out State Significant Developments40 can elect to manage their own greenhouse gas benchmarks. These are called elective Benchmark Participants.

Electricity retailers have an incentive to restructure their electricity purchasing arrangements or to reduce the energy consumption of their customers to minimise the costs of meeting abatement obligations imposed by GGAS legislation. Large electricity customers that elect into GGAS may be able to minimise the abatement costs incurred by finding other more competitive sources for meeting their obligations. Elective participants can become accredited for reductions of on-site emissions from industrial processes at their sites and by so doing offset abatement and other operating costs. See Section A.7.3 for further details.

Each Benchmark Participant is responsible for its contribution to reducing the NSW electricity sector benchmark. For example, if an electricity retailer sells 5% of total electricity sales in NSW, it is responsible for meeting 5% of the required reduction applied to the NSW electricity sector benchmark. Elective participants, having nominated which company sites are part of GGAS, must meet the benchmark reduction targets associated with electricity consumption at those sites.

Benchmark Participants meet their obligation primarily by purchasing NGACs and surrendering them when they lodge their compliance reports. These compliance reports, or benchmark statements, must be submitted by 18 March each year for the previous calendar year’s activities.

Benchmark Participants can also claim credit for a limited number of Renewable Energy Certificates (RECs) surrendered under the Commonwealth’s Mandatory Renewable Energy Target (MRET) in relation to electricity purchases associated with NSW41.

38 A market customer is a customer who takes electricity supply in NSW directly from the national grid and is registered with Australian Energy Market Operator (AEMO) as a ‘market customer’. 39 A large electricity customer is defined as a customer other than a retail supplier, that on its own or together with certain related entities has an electricity load within NSW of over 100GWh per annum at one site or multiple sites owned or occupied by the customers, as long as one of the sites uses over 50GWh per annum. 40 State significant development has the same meaning as it has in the Environmental Planning and Assessment Act 1979. At this stage, no State significant developments have elected under the Scheme. 41 A renewable energy certificate may be counted towards meeting the greenhouse gas benchmark, or to abate a greenhouse gas shortfall, if certain criteria are satisfied pursuant to clauses 73DA and 73DB of the Regulations.

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A Overview of GGAS

A.5 Abatement Certificate Providers

As Scheme Administrator, we accredit organisations undertaking abatement of greenhouse gas emissions as Abatement Certificate Providers under one of the GGAS Rules. Abatement Certificate Providers carry out greenhouse gas abatement projects that are accredited under the GGAS Rules and create abatement certificates.

The Rules set out the eligibility criteria and greenhouse gas accounting methods that Abatement Certificate Providers must use to determine the value of abatement, and hence the number of abatement certificates each project can create.

GGAS also allows some large electricity customers to claim credit for reducing on-site emissions of greenhouse gases from (non-electricity related) industrial processes at sites which they own and control. Large User Abatement Certificates (LUACs) can be created for these activities. These certificates are not tradeable, but can be used by these participants to meet their elected benchmarks, thereby reducing their costs of compliance. In accordance with the LUAC Rule42, creation of LUACs is not directly related to electricity use.

Under the Rules, Abatement Certificate Providers must specify the location of their project. Eligible Demand Side Abatement (DSA) projects can only be undertaken in NSW or the ACT. Carbon sequestration activities can only be undertaken in NSW. Generation projects located in any jurisdiction interconnected with the national electricity grid supply into the common pool from which NSW consumers draw power. Therefore, interstate generation projects that are connected to the national electricity grid may apply for accreditation.

In assessing a project for accreditation, we first consider the information provided in the application form. If the information provided is not comprehensive, we may request further information from the company. At times, several requests are necessary in order for a comprehensive view to emerge. Where projects are technically complex, we may decide to audit the project to confirm certain aspects of the application. Figure A.3 illustrates the assessment process conducted by us when assessing applications for accreditation.

42 Greenhouse Gas Benchmark (Large User Abatement Certificate) Rule No.4 of 2003.

72 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

A Overview of GGAS

Figure A.3 Flow diagram of application process

Application received

Assessment of application

Additional information Yes required?

No Additional information received

Audit required? Yes

No Audit conducted and audit report received

Final assessment and recommendations

Application approved for accreditation

Applications for accreditation closed for GGAS on 31 December 2009 for all Rules in anticipation of a national emissions trading scheme (the CPRS). However, following delays to the implementation of the CPRS and ongoing uncertainty about when a national scheme will be introduced and what form it will take, GGAS was re-opened in a limited way in March 2011. Importantly, only applicants for existing projects accredited under GGAS are eligible to apply for accreditation, preserving existing accredited activity, rather than adding new project activity, under GGAS.

The Act was also amended to end the eligibility of Category A generation projects to create NGACs from 30 June 2010.

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A Overview of GGAS

A.6 GGAS Registry

The GGAS Registry is a web-based database that records Abatement Certificate Providers and certificates as required by legislation. The Registry tracks certificate creation, transfer and surrender and can be accessed by all participants and members of the public.

NGACs are transferrable and the Registry records all changes in ownership of NGACs. However, the Registry is not a trading platform as trading of certificates is expected to occur outside of the Registry whether bilaterally, through brokers or through other trading platforms.

A.7 GGAS Rules

A.7.1 The Compliance Rule

The Greenhouse Gas Benchmark Rule (Compliance) No. 1 of 2003 (Compliance Rule) provides specific arrangements for the calculation of Greenhouse Gas Benchmarks, Attributable Emissions, and any Greenhouse Shortfall for Benchmark Participants.

A.7.2 The Generation Rule

The Greenhouse Gas Benchmark Rule (Generation) No. 2 of 2003 (Generation Rule) provides for the creation and calculation of certificates through a range of different power generation activities (in NSW and interstate). Such activities include small and large scale fossil fuel fired systems as well as renewable generation and cogeneration.

The Generation Rule enables electricity generators to create certificates for:  producing electricity that has a lower emission intensity than the NSW Pool Coefficient (the Relative Intensity Approach), or  improving the efficiency of electricity production by a generating system that is generally operating at an emissions intensity above the NSW pool coefficient (the Efficiency Improvement Approach).

The extent to which abatement certificates are created under either, or both, of these approaches is determined by the generating system’s assigned Category (A, B, C or D) and its assigned NSW Production Baseline. See Appendix B for details of the generation system categories.

The Generation Rule allows abatement certificates to be created from activities outside NSW and the ACT provided that the generating system’s output is exported to a registered distribution or transmission system connected to the national grid and is thus interconnected with the NSW grid. As a result, generators in Victoria, Tasmania, South Australia and Queensland have been accredited under GGAS. In

74 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

A Overview of GGAS

each case, generators must have adequate metering and record-keeping procedures to support the calculation of certificates under the Generation Rule and can only create abatement certificates for that portion of electricity that is exported into the national electricity grid.

Within the generation activities satisfying the requirements listed above, eligible generation fuels (other than the traditional fuels of coal and natural gas) include the use of landfill gas, sewage gas, manufactured methane gas (biogas), and other eligible waste methane as fuel for generation. These types of generation can create RECs as well as abatement certificates because GGAS recognises the avoidance of methane emissions via combustion of these fuels (methane having a global warming potential 21 times that of carbon dioxide) in addition to the zero emissions associated with the fuel source.

The use of waste heat from generating activities (cogeneration) is also recognised within GGAS. The total greenhouse gas emissions of a generating system (which impacts its emissions intensity) may be adjusted downwards in recognition of the notional greenhouse gas emissions avoided through the beneficial capture and use of the waste heat.

Performance Improvement Testing Regime

Generators using the Efficiency Improvement Approach (Method 2) are required to develop and implement a Performance Improvement Testing Regime (PITR).

The primary purpose of the PITR is to establish a methodology by which the baseline performance of the generating system (prior to undertaking performance improvements) can be compared to the post-improvement performance of the generating system (for the purposes of calculating abatement activity for ongoing measurement periods).

Methane Metering

During 2008, we developed a methodology, in consultation with industry and experts, for determining the uncertainty associated with the direct metering of waste methane fuel. This approach is known as the Methane Energy Uncertainty Methodology (MEUM), and takes account of circumstances where the fuel is very ‘dirty’ and interferes with the ongoing accuracy of the measurement instruments.

The MEUM is a pioneering approach to applying uncertainty in a practical way and represents a major piece of innovative work in what is a very difficult and complex subject area. With the MEUM, generators using Equations 13 or 16 of the Rule are able to move away from the use of conservative default factors for the estimation of energy content of waste methane fuels used (such as landfill gas, sewage gas or waste coal mine gas). Using the MEUM approach they can instead use the actual gas energy content of waste methane fuel consumed by their generating systems, and thereby realise a better reflection of true abatement, and increased NGAC creation.

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A Overview of GGAS

The MEUM provides Abatement Certificate Providers with a mechanism to determine the uncertainty associated with the measurement of the actual energy content. It has been developed in accordance with the ISO Standard – Guide to Uncertainty Measurement.

The MEUM approach was endorsed in early 2009. Further information regarding development of the MEUM can be found in Section 4.2.5 of the Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2008 and Section 4.2.4 of Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2009.

A.7.3 Demand Side Abatement Rule

The Greenhouse Gas Benchmark Rule (Demand Side Abatement) No. 3 of 2003 (DSA Rule) is defined as a reduction in greenhouse gas emissions resulting from actions taken on the customer side of an electricity meter (ie, the ‘demand side’). The DSA Rule was amended on 1 July 2009 with the implementation of the ESS. On this date, the end- use energy efficiency component of the DSA Rule ceased, leaving only the on-site generation element of the DSA Rule active.

The DSA Rule provides for the creation and calculation of certificates where greenhouse gas emissions are reduced through eligible on-site electricity generation. Under the DSA Rule, project proponents undertake on-site generation (DSA activities) to create certificates. The on-site electricity generation essentially replaces supply from the National Electricity Market leading to demand side energy efficiencies.

The DSA Rule excludes certain activities from creating certificates, such as:

 those which can create certificates under another Rule

 activities which reduce electricity consumption by reducing the economic benefit from the use of the electricity

 Green Power purchases (or purchases of similar products)

 activities to reduce losses in electricity transmission or distribution networks, and

 installation of solar water heaters for which RECs can be created.

DSA on-site generation projects vary greatly depending on the technologies used and the size of the project. The abator must apply the Generation Emissions Method of the Generation Rule in calculating how many certificates their DSA project will create.

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A.7.4 Large User Abatement Certificates Rule

The Greenhouse Gas Benchmark Rule (Large User Abatement Certificates) No. 4 of 2003 (LUAC Rule) provides for the creation and calculation of non-tradable abatement certificates (LUACs)43 through the abatement of on-site greenhouse gas emissions (from industrial processes) not directly related to the consumption of electricity. Under the LUAC Rule, the entity entitled to create abatement certificates is called a ‘large user’. Entities who qualify as large users are:

 market customers and large electricity customers who have elected to manage a greenhouse gas benchmark (elective Benchmark Participant) whose electricity usage levels are greater than 100GWh per year at one or more sites that they own or occupy in NSW with at least one using more than 50GWh per year

 persons carrying out State Significant Development (now referred to as ’Major Projects’ – State Environmental Planning Policy (Major Projects) 2005) as determined by the Minister for Planning in accordance with Environmental Planning and Assessment Act 1979 who have elected to manage a greenhouse gas benchmark.

By electing to become a Benchmark Participant, a large electricity customer takes on the obligation of managing the greenhouse gas emissions associated with its electricity purchases. This obligation would otherwise be managed on its behalf by an electricity retailer. The principle reason for allowing elective participants to create LUACs, and to surrender these towards their own benchmark, was to shield large electricity users from any pass through of costs from their electricity retailer (see Section 3 on Benchmark Participants for further information).

Eligibility to become an elective Benchmark Participant is assessed by us as the Compliance Regulator. Accreditation to create LUACs is assessed by us as the Scheme Administrator.

Once eligibility and usage levels have been accepted, activities that can be carried out by a large user to create LUACs include on-site reduction in greenhouse gasses through:

 increasing the efficiency of fuel use

 switching to lower emission intensity fuels

 abating emissions from industrial processes

 abating fugitive emissions.

These activities are not related to the reduction of electricity taken from the national grid.

43 The ‘non-tradeable’ rule was introduced as an opportunity for energy intensive industries to reduce their emissions from industrial activities unrelated to national electricity grid generation. There are limitations to how LUACs can be created, for example the project must occur at the location which is the subject of the election by the large user.

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A Overview of GGAS

These activities must occur in NSW at those sites where the large user has elected to manage its own greenhouse gas benchmark. Emissions reductions accounted for by the activity must be within a category reported in the National Greenhouse Gas Inventory (NGGI)44 and must not be as a result of compliance with statutory requirements, although emissions reductions beyond the statutory requirements may be claimed.

A LUAC Rule accreditation may be for a single emissions reduction activity or a mixture of activities. Activities may be implemented as a one-off action or as part of an ongoing program. To accommodate this variety, the large user can choose between 3 different methods for calculating how many LUACs may be created from its project:

 Project Impact Assessment Method

 Baseline Method for an Existing Plant

 Baseline Method for Plant Extensions or New Plant.

The Project Impact Assessment Method is generally more appropriate where a single activity is undertaken as a one-off project while the Baseline Method is applicable where multiple activities are undertaken as part of an ongoing program to reduce the greenhouse intensity of the industrial output of the plant.

A.7.5 Carbon Sequestration Rule

The Greenhouse Gas Benchmark Rule (Carbon Sequestration) No. 5 of 2003 (CS Rule) makes provision for organisations to create certificates for carbon sequestered in eligible forests in NSW. Carbon sequestration (for the purpose of the CS Rule) is based on the principle of photosynthesis, a chemical reaction that naturally occurs in plant life. Photosynthesis removes carbon dioxide from the atmosphere. The CS Rule is consistent with Article 3.3 of the Kyoto Protocol, and recognises carbon sequestration through ’afforestation’ and ’reforestation’ activities.

Under the CS Rule, there are 3 key eligibility criteria/requirements which we assess:

 capability of the organisation to account for carbon sequestered through forestry activities, and to maintain the long-term commitments involved

 eligibility of the actual forest, including the land’s status as at 31 December 1989, and the forest’s physical characteristics including height and crown cover (key criteria for consistency with the Kyoto Protocol)

 demonstration that the applicant has the ownership or control of registered carbon sequestration rights on the title of the eligible land.

44 www.climatechange.gov.au/en/publications/greenhouse-acctg/national-greenhouse-gas- inventory-2008.aspx

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In order for a sequestration pool manager to establish eligibility of a project, or to add forested land to an accreditation, a number of specific documents are required. These include:

 Evidence that the forest was planted on non-forested land after 1 January 1990. There are varying means used to establish this, including satellite imagery, aerial photographs, and planting records.

 Evidence that a carbon sequestration right is registered on the title of each portion of land in the forest and that the pool manager controls these rights through the provision of a copy of the certificate of title.

 A Restriction of Use must be registered on the title with IPART as the Prescribed Authority to provide security that the forest will be maintained even if the land is sold.

 Risk management procedures with respect to hazards and risks such as, but not limited to, fire, disease or pests.

 Maintenance procedures for record keeping and ongoing compliance.

Some applicants and accredited parties have had difficulty in providing these documents to a sufficient level of accuracy, particularly given the length of time since some forests were planted.

A.8 NSW Energy Savings Scheme

The NSW Energy Savings Scheme (ESS) is a NSW-based mandatory energy efficiency scheme which commenced on 1 July 2009. The principal objective of the ESS is to create a financial incentive to reduce the consumption of electricity by encouraging energy savings activities. It is designed to increase opportunities to improve energy efficiency by rewarding companies who undertake eligible projects that either reduce electricity consumption or improve the efficiency of energy use.

The ESS was developed as a complementary measure to the proposed national emissions trading scheme and is modelled on the end-use energy efficiency component of the DSA Rule. It replaced the energy efficiency component of the DSA Rule, and this component of the DSA Rule ceased with the commencement of the ESS.

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B Categories of the Generation Rule

Under GGAS, generating systems are assigned to certain Categories, which dictate the approach to NGAC creation and the accordant NSW Production Baseline.

Category A

Category A generating systems are those which pro-actively entered into power purchase agreements (PPAs) with electricity retailers under the previous NSW voluntary benchmarks scheme, and have a respective NSW Production Baseline as determined by the Generation Rule. In the case of Category A generating systems, the Deemed Retailer to the PPA (ie, the electricity retailer) is eligible for abatement for generation below the resultant baseline figure, while the generator (counter- signatory to the PPA) is eligible for abatement associated with generation above this baseline figure. Category A is no longer an eligible activity, but is still defined in the Generation Rule.

Category B

A Category B generating system is essentially an existing and prescribed NSW ‘baseload’ generating system, which in the case of a coal fired power station, effectively operates at an emissions intensity equal to, or greater than, the NSW Pool Coefficient. As such, it is unable to use the Relative Intensity Approach to create certificates, but may instead undertake efficiency improvements such as turbine upgrades or fuel switching, to improve the emissions intensity at which it operates. The extent to which the efficiency improvement is demonstrated (confirmed via testing) determines the eventual numbers of abatement certificates created.

Category C

A Category C generating system on the other hand, is generally one that commenced operations prior to the announcement of GGAS and in the case of fossil fuel fired generating systems, has a NSW Production Baseline equal to its average annual output during the years 1997-2001. Under the Relative Intensity Approach, this category of generation creates abatement certificates on the basis of each MWh (of lower emissions intensity generation) above its respective NSW Production Baseline Figure.

80 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

B Categories of the Generation Rule

Category D

Category D generating systems (broadly, those commissioned after GGAS was first announced by the NSW Government in January 2002) are generally representative of newer and ‘cleaner’ technologies and have a designated NSW Production Baseline of zero MWh. This effectively means that using the Relative Intensity Approach, a generator for this category of power station may create abatement certificates for each MWh (of lower emissions intensity generation) above its zero MWh baseline, reflecting the difference in emission intensity between the generation and the NSW Pool Coefficient.

Types of Generating systems

Table B.1 breaks down the types of generating systems by category and fuel source. Fuels used in generating systems range from biomass (including bagasse), hydropower, natural gas, coal and methane derived from coal mines.

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B Categories of the Generation Rule

Table B.1 Generating systems by fuel and source

Category Fuel source Category A: Biomass This type of plant burns biomass, including bagasse (sugar cane waste) and sawmill waste Category A: Natural Gas Natural gas (fossil fuel) Category A: Waste Coal Coal seam gas drained from mines for the purpose of coal mining Mine Gas operations (regardless of the period of time between draining the gas from the coal mine and use of the mine for coal mining operations) and includes coal seam gas drained from closed coal mines (fossil fuel) Category A: Hydro Hydropower Category A: Landfill Gas derived from degradation of waste in landfills Gas Category B: Coal Coal (fossil fuel) Category C: Coal Coal (fossil fuel) Category C: Landfill Gas Gas derived from degradation of waste in landfills Category C: Natural Gas Natural gas (fossil fuel) Category C: Sewage Generation based on gas derived from sewage Gas Category D: Biomass This type of plant burns biomass, including bagasse (sugar cane waste) and sawmill waste Category D: Coal Coal (fossil fuel) Category D: Coal Seam Methane drained from (unmined) coal seams for the purposes of power Methane generation (fossil fuel) Category D: Landfill Gas derived from degradation of waste in landfills Gas Category D: Natural Natural gas (fossil fuel) Gas Category D: Waste Coal Methane drained from mines as a result of coal mining operations Mine Gas (regardless of the period of time between draining the gas from the coal mine and use of the mine for coal mining operations) and includes coal seam gas drained from closed coal mines (fossil fuel)

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C Registry data

This section includes information on all current and cancelled accreditations, including future projects that have not yet been implemented.

This appendix contains 3 parts. Part C.1 provides accreditation statistics detailing numbers of new and cancelled accreditations by Rule for each year that GGAS has been operating.

Part C.2 provides a breakdown of certificates created by categories of the Generation Rule and DSA Rule.

Part C.3 provides a detailed breakdown of certificate registration for each project that has been accredited for each vintage year. Certificates are registered for projects rather than accreditations and an accreditation may include multiple projects. An asterisk (*) beside the project name indicates that the project has been cancelled.

Data in this chapter are current as at 30 June 2011.

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IPART C

C.1 Accreditation statistics Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Table C.1 Generation Rule accreditations approved each year by category and fuel type

Category – type 2003 2004 2005 2006 2007 2008 2009 2010 Total Category A – Biomass 0 3 0 0 0 0 0 0 3 Category A – Hydro 0 13 6 0 0 0 1 0 20 Category A – Landfill Gas 9 12 1 0 1 0 0 0 23 Category A – Natural Gas 0 2 3 0 0 0 0 0 5 Category A – Waste Coal Mine Gas 0 2 0 0 0 0 0 0 2 Category B – Coal 0 6 1 0 0 0 0 0 7 Category C – Biomass 0 0 0 0 0 1 0 0 1 Category C – Coal 0 2 0 2 2 1 0 0 7 nhouse Gas Reduction Scheme during2010 nhouse Gas Category C – Hydro 0 0 0 0 2 0 0 0 2 Category C – Landfill Gas 1000 00001 Category C – Natural Gas 0 2 6 0 2 4 0 1 15 Category C – Sewage Gas 0 1 0 0 0 0 0 0 1 Category D – Biomass 0 2 2 1 1 0 0 0 6 Category D – Coal 0111 01004 Category D – Coal Seam Methane 0 0 0 0 1 0 0 0 1 Category D – Landfill Gas 4 14 1 1 8 4 8 0 40 Category D – Natural Gas 0 3 3 2 5 5 2 5 25 Category D – Sewage Gas 0 0 1 0 0 0 0 1 2 Category D – Waste Coal Mine Gas 0 4 0 2 2 1 1 0 10

Table C.2 Generation Rule accreditations approved each year by jurisdiction

Jurisdiction 2003 2004 2005 2006 20072008 2009 2010 Total Australian Capital Territory 2 0 0 0 1 0 0 0 3 New South Wales 3 27 3 2 6 4 6 3 54 Compliance and OperationoftheNSW Gr and Compliance Queensland 0 14 4 4 3 6 3 0 34 South Australia 4530 230017 Tasmania 0 0 0 0 7 1 0 3 11 Victoria 521153 533156

Table C.3 DSA Rule accreditations approved each year by calculation method

Calculation method 2003 2004 2005 2006 2007 2008 2009 2010 Total Generation Emissions Method 0 4 1 0 2 1 1 8 8 Default Abatement Factors Method 0 7 8 14 11 7 0 – 47 eenhouse GasReduction Scheme during2010 Metered Baseline Method - normalised by NABERS 0 1 1 0 1 1 0 – 4 Metered Baseline Method - per unit of output 1010 100–3 Metered Baseline Method - unaffected by output 0 0 1 1 0 0 0 – 2 Project Impact Assessment Method 2 36 31 2 4 1 0 – 76

Registry data IPART

IPART C

Table C.4 DSA Rule accreditations approved each year by project type Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Calculation method 2003 2004 2005 2006 2007 2008 2009 2010 Total Energy Efficiency: Commercial 2 25 22 6 5 4 0 – 64 Energy Efficiency: Industrial 1 12 14 0 4 1 0 – 32 Energy Efficiency: Residential 0 4 4 8 6 4 0 – 26 Energy Source Substitution: Commercial 0100 100–2 Energy Source Substitution: Residential 0 2 2 3 1 0 0 – 8 On-site Generation: Commercial 0000 00011 On-Site Generation: Industrial 0 4 1 0 1 1 1 7 15 On-Site Generation: Residential 0000 10001

Table C.5 LUAC Rule accreditations approved each year by calculation method nhouse Gas Reduction Scheme during2010 nhouse Gas Calculation method 2003 2004 2005 2006 2007 2008 2009 2010 Total Existing Plant Baseline Method 1 0 1 0 2 0 0 0 4 Plant Extension or New Plant Baseline Method 0 0 0 0 0 1 001 Specific Abatement Project 0 0 0 2 2 0 1 0 5

Table C.6 CS Rule accreditations approved each year

Calculation method 2003 2004 2005 2006 2007 2008 2009 2010 Total Carbon Sequestration Estimation Methodology 0 1 3 1 1 1 0 0 7

C.2 Certificate creation statistics – Generation and DSA Rules

Table C.7 Source of Generation Rule certificates by category and fuel type

Category – fuel type 2003 2004 2005 2006 2007 2008 2009 2010 Total Compliance and OperationoftheNSW Gr and Compliance Category A – Biomass 10,895 14,901 0 0 0 0 0 0 25,796 Category A – Hydro 132,869 123,844 148,176 160,941 77,148 94,977 120,164 50,504 908,623 Category A – Landfill Gas 1,216,141 1,327,350 1,379,695 1,319,360 1,284,691 1,228,279 1,222,469 600,529 9,578,514 Category A – Natural Gas 590,324 621,065 675,775 673,645 685,432 681,992 670,017 334,147 4,932,397 Category A – Waste Coal Mine Gas 2,468,419 2,301,104 2,029,783 2,096,753 2,235,167 1,156,935 1,611,392 762,919 14,662,472 Category B – Coal 286,985 418,581 498,952 831,451 784,624 794,859 562,143 401,212 4,578,807 Category C – Biomass 0 0 0 0 364,190 377,617 443,488 451,121 1,636,416 Category C – Coal 251,199 167,243 1,025,219 1,268,198 1,476,814 1,862,951 1,897,178 2,246,634 10,195,436 Category C – Hydro 0 0 0 80,000 0 0 0 0 80,000 Category C – Landfill Gas 31,571 0 0 0 0 0 0 0 31,571

eenhouse GasReduction Scheme during2010 Category C – Natural Gas 286,277 122,154 206,331 721,861 1,949,269 1,892,165 1,400,168 1,068,498 7,646,723 Category C – Sewage Gas 59,381 58,928 100,578 184,989 196,181 179,509 193,274 202,679 1,175,519 Category D – Biomass 542 10,976 30,521 35,165 40,716 38,496 42,557 41,942 240,915 Category D – Coal 0 130,665 159,493 191,641 94,889 409,428 304,311 576,039 1,866,466 Category D – Coal Seam Methane 0 0 0 0 12,978 29,744 16,575 376,914 436,211 Category D – Landfill Gas 732,187 889,934 1,241,413 1,329,685 1,545,181 1,612,264 2,080,422 2,235,073 11,666,159 Category D – Natural Gas 240,853 388,725 101,803 117,268 399,105 440,951 2,159,608 4,828,682 8,676,995 Category D – Sewage Gas 0 0 0 0 0 0 4,173 3,036 7,209 Category D – Waste Coal Mine Gas 10,192 168,762 281,432 537,222 1,667,088 1,532,974 2,729,126 2,919,618 9,846,414 C

Registry data IPART

IPART C

Table C.8 Source of Generation Rule certificates by jurisdiction Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Category A – New South Wales 3,272,785 3,129,409 2,911,523 2,992,008 3,134,325 2,062,179 2,543,517 1,222,833 21,268,579 Category A – Queensland 36,569 41,765 47,291 46,857 42,830 36,700 38,106 19,167 309,285 Category A – South Australia 334,162 372,471 410,540 392,389 354,894 310,464 298,255 148,032 2,621,207 Category A – Victoria 775,132 844,619 864,075 819,445 750,389 752,840 744,164 358,067 5,908,731 Category B – New South Wales 286,985 418,581 498,952 831,451 784,624 794,859 562,143 401,212 4,578,807 Category C – New South Wales 31,571000000031,571 Category C – Queensland 0 48,351 86,290 198,094 704,017 716,997 747,332 794,088 3,295,169 Category C – South Australia 284,984 70,642 198,116 607,911 1,143,658 1,313,939 1,162,541 1,055,365 5,837,156 Category C – Tasmania 0 0 0 220,271 355,276 369,298 84,925 0 1,029,770 Category C – Victoria 311,873 229,332 1,047,722 1,228,772 1,783,503 1,912,008 1,939,310 2,119,479 10,571,999

nhouse Gas Reduction Scheme during2010 nhouse Gas Category D – Australian Capital Territory 94,198 99,268 110,062 126,431 120,976 123,250 122,471 122,254 918,910 Category D – New South Wales 517,184 775,677 1,060,731 1,003,320 1,101,578 1,295,840 2,768,948 3,250,809 11,774,087 Category D – Queensland 297,748 612,219 509,741 824,476 1,977,587 2,162,444 3,595,536 6,286,049 16,265,800 Category D – South Australia 12,135 17,524 17,780 32,480 22,819 27,024 60,380 62,362 252,504 Category D – Tasmania 0 0 0 45,121 103,810 41,909 356,436 769,721 1,316,997 Category D – Victoria 62,509 84,374 116,348 179,153 433,187 413,390 433,001 490,109 2,212,071

Table C.9 DSA Rule certificate creation by calculation method

Calculation method 2003 2004 2005 2006 2007 2008 2009 2010 Total

Generation Emissions Method 278,397 332,221 435,216 441,440 564,204 573,773 518,539 690,046 3,833,836 Compliance and OperationoftheNSW Gr and Compliance Default Abatement Factors Method 7,741 334,562 1,002,992 8,377,582 9,200,268 7,375,518 116,691 – 26,415,354

Metered Baseline Method – baseline per 23,668 20,667 19,322 51,325 80,023 79,659 62,573 – 337,237 unit of output Metered Baseline Method – unaffected by 0 1,615 4,187 5,910 6,111 5,997 4,122 – 27,942 output Metered Baseline Method – normalised by 0 10,337 8,201 12,760 20,692 21,252 10,657 – 83,899 NABERS scheme

Project Impact Assessment Method 35,335 42,831 39,281 43,155 53,899 58,758 32,334 – 305,593

Table C.10 DSA Rule certificate creation by project type eenhouse GasReduction Scheme during2010 Project type 2003 2004 2005 2006 2007 2008 2009 2010 Total On-site Generation: Commercial 0 0 0 0 0 0 135 0 135 On-site Generation: Industrial 278,397 332,221 435,216 441,440 564,195 573,763 518,404 684,698 3,828,334 On-site Generation: Residential 0 0 0 0 9 10 0 0 19 Energy Efficiency: Commercial 22,720 40,249 47,924 67,755 868,049 809,682 32,509 – 1,888,888 Energy Efficiency: Industrial 35,572 32,867 36,814 66,818 99,709 103,155 77,177 – 452,112 Energy Efficiency: Residential 8,387 315,425 953,879 8,306,259 8,344,475 6,588,078 98,952 – 24,615,455 Energy Source Subs: Commercial 65 65 0 0 0 0 0 5,348 5,478 Energy Source Subs: Residential 0 21,406 35,366 49,900 48,760 40,269 17,739 0 213,440 C

Registry data

IPART

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C.3 Certificate creation statistics Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Table C.11 Category A: Biomass

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

Country Energy: Broadwater Generating System* NSW 10,895 13,178 0 0 0 0 0 0 24,073

Country Energy: Condong Cogeneration Plant* NSW 0 628 0 0 0 0 0 0 628

Country Energy: Harwood Cogeneration Plant* NSW 0 1,095 0 0 0 0 0 0 1,095

Table C.12 Category A: Natural gas

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total nhouse Gas Reduction Scheme during2010 nhouse Gas

AGL Sales Pty Ltd: Varnsdorf Cogeneration System* VIC 9,863 10,650 11,046 12,029 11,861 11,993 0 0 67,442

Integral Energy Australia: Smithfield Energy Facility NSW 580,461 594,623 632,616 625,175 646,520 646,791 670,017 334,147 4,730,350

Origin Energy Electricity Ltd: Alfred Hospital VIC 0 3,973 8,514 9,340 9,302 8,404 0 0 39,533 Cogeneration Plant* Origin Energy Electricity Ltd: Royal Melbourne VIC 0 8,282 17,179 19,415 17,749 14,804 0 0 77,429 Hospital Cogeneration Plant* Origin Energy Electricity Ltd: St Vincents Hospital VIC 0 3,537 6,420 7,686 0 0 0 0 17,643 Cogeneration Plant*

Table C.13 Category A: Hydro

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Country Energy: Burrendong Hydro Generating NSW 8,731 6,488 13,448 22,779 2,269 2,307 6,828 0 62,850 System

Compliance and OperationoftheNSW Gr and Compliance Country Energy: Copeton Hydro Generating NSW 20,206 1,538 12,054 18,971 14,360 15,683 16,066 4,256 103,134 System Country Energy: Nymboida Hydro Generating NSW 6,255 9,020 8,887 10,224 7,895 10,504 9,098 6,990 68,873 System

Country Energy: Oaky Hydro Generating System NSW 2,700 2,346 2,366 6,778 5,402 12,008 12,172 2,594 46,366

Country Energy: Wyangala Hydro Generating NSW 3,934 0 448 0 0 0 0 0 4,382 System* EDL LFG (Vic) Pty Ltd: Clayton & Springvale LFG VIC0000 005,82005,820 Generating System EnergyAustralia: Glenbawn Hydro Generating NSW 10,735 10,843 10,926 11,114 1,243 1,326 9,497 8,130 63,814 System

eenhouse GasReduction Scheme during2010 Origin Energy Electricity Ltd: Yarrawonga Hydro VIC 37,487 40,934 44,727 45,511 28,892 23,862 31,088 14,444 266,945 Generating System TRUenergy Pty Ltd: Blue Rock Dam Hydro VIC 0 0 6,717 4,433 2,025 4,093 4,234 2,254 23,756 Generating System* TRUenergy Pty Ltd: Cardinia Dam Hydro VIC 0 0 8,563 10,276 6,372 8,086 8,324 3,156 44,777 Generating System* TRUenergy Pty Ltd: Eildon Pondage Hydro VIC 0 0 2,357 12,424 3,998 6,883 6,721 4,545 36,928 Generating System* TRUenergy Pty Ltd: Lake Glenmaggie Dam Hydro VIC 0 0 2,972 2,315 714 6,289 6,278 2,650 21,218 Generating System* TRUenergy Pty Ltd: Lake William Hovell Dam Hydro VIC 0 0 3,107 266 3,971 3,567 4,038 1,485 16,434 Generating System* C

TRUenergy Pty Ltd: Thomson Dam Hydro Registry data VIC 0 0 7,786 15,850 7 369 0 0 24,012 Generating System*

IPART TXU Electricity Ltd: Blue Rock Dam Hydro VIC 2,798 7,649 3,849 0 0 0 0 0 14,296 Generating System*

IPART C

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation TXU Electricity Ltd: Cardinia Dam Hydro Generating VIC15,01213,3454,4440 000032,801 System* TXU Electricity Ltd: Eildon Pondage Hydro VIC 5,478 11,555 7,135 0 0 0 0 0 24,168 Generating System* TXU Electricity Ltd: Lake Glenmaggie Dam Hydro VIC5,9135,4013,0470 000014,361 Generating System* TXU Electricity Ltd: Lake William Hovell Generating VIC 3,785 3,823 746 0 0 0 0 0 8,354 System* TXU Electricity Ltd: Thomson Dam Hydro VIC 9,835 10,902 4,597 0 0 0 0 0 25,334 Generating System*

Table C.14 Category A: Waste coal mine gas

nhouse Gas Reduction Scheme during2010 nhouse Gas Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

Integral Energy Australia: Appin Power Plant NSW 1,731,215 1,462,384 1,473,011 1,553,810 1,373,685 530,423 1,011,062 453,357 9,588,947

Integral Energy Australia: Tower Power Plant NSW 737,204 838,720 556,772 542,943 861,482 626,512 600,330 309,562 5,073,525

Table C.15 Category A: Landfill gas

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total AGL Electricity Ltd: Broadmeadows Landfill Gas VIC 132,165 132,387 132,559 112,453 0 0 0 0 509,564 Power Plant*

Compliance and OperationoftheNSW Gr and Compliance AGL Sales Pty Ltd: Broadmeadows LFG Generating VIC 0 0 0 17,669 114,898 115,218 115,538 59,739 423,062 System AGL Sales Pty Ltd: Clayton & Springvale LFG VIC 347,713 386,035 408,065 389,938 370,801 373,618 374,655 179,163 2,829,988 Generating System AGL South Australia Pty Ltd: Highbury LFG SA 37,020 32,340 32,188 28,032 23,508 16,028 17,655 7,642 194,413 Generating System AGL South Australia Pty Ltd: Pedler Creek LFG SA 60,630 60,731 60,810 60,991 61,126 52,855 53,002 36,409 446,554 Generating System AGL South Australia Pty Ltd: Tea Tree Gully LFG SA 31,587 28,033 22,421 18,136 17,472 13,504 13,023 6,088 150,264 Generating System AGL South Australia Pty Ltd: Wingfield 1 & 2 LFG SA 115,162 115,355 115,505 115,848 116,105 100,395 100,674 97,893 876,937 Generating System

eenhouse GasReduction Scheme during2010 EDL LFG (NSW) Pty Ltd: Lucas Heights 1 LFG NSW 0 46,414 56,675 59,728 66,117 76,332 67,801 0 373,067 Generating System EDL LFG (Qld) Pty Ltd: Brown Plains LFG Generating QLD 36,569 41,765 47,291 46,857 42,830 36,700 38,106 19,167 309,285 System EDL LFG (SA) Pty Ltd: Wingfield 1 & 2 LFG SA 88,631 127,501 166,071 153,465 123,845 108,233 96,853 0 864,599 Generating System EDL LFG (Vic) Pty Ltd: Berwick LFG Generating VIC 0 31,293 28,760 19,591 40,136 40,797 52,317 0 212,894 System EDL LFG (Vic) Pty Ltd: Broadmeadows LFG VIC 0 26,957 11,527 7,294 11,648 9,136 6,063 0 72,625 Generating System

EDL LFG (Vic) Pty Ltd: Corio LFG Generating System VIC 0 13,246 13,536 12,820 7,634 8,331 11,433 0 67,000 C

EDL LFG (Vic) Pty Ltd: Corio LFG Generating System Registry data VIC 0 888 24,892 24,892 24,892 21,635 21,635 18,323 137,157 - Deemed Retailer

IPART EDL Operations (Berwick) Pty Ltd: Berwick LFG VIC 33,893 0 0 0 0 0 0 0 33,893 Generating System*

IPART C

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation EDL Operations (Broadmeadows) Pty Ltd: VIC24,209000 000024,209 Broadmeadows LFG Generating System* EDL Operations (Corio) Pty Ltd: Corio LFG VIC 12,324 0 0 0 0 0 0 0 12,324 Generating System* EDL Operations (Corio) Pty Ltd: Corio LFG VIC24,81823,72300 000048,541 Generating System - Deemed Retailer* EDL Operations (Pedler Creek) Pty Ltd: Pedler Creek SA 1,132 8,511 13,545 15,917 12,838 19,449 17,048 0 88,440 LFG Generating System

EnergyAustralia: Belrose Power Station NSW 43,539 25,026 27,049 22,859 37,455 38,355 38,420 18,467 251,170

EnergyAustralia: Lucas Heights 1 Generating NSW 116,910 117,106 117,271 117,627 117,897 101,938 102,226 85,330 876,305 System TRUenergy Pty Ltd: Berwick LFG Generating VIC 0 0 53,650 95,243 95,489 95,755 96,020 72,308 508,465 nhouse Gas Reduction Scheme during2010 nhouse Gas System* TXU Electricity Ltd: Berwick LFG Generating VIC 109,839 110,039 47,880 0 0 0 0 0 267,758 System*

Table C.16 Category B: Coal

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

Delta Electricity: Mt Piper Generating System NSW 11,050 19,777 52,097 187,838 116,886 85,469 0 56,462 529,579 Compliance and OperationoftheNSW Gr and Compliance Delta Electricity: Munmorah Generating System NSW03,5001,0160 00004,516

Delta Electricity: Vales Point Generating System NSW 66,894 65,431 46,329 102,252 20,072 3,104 3,625 570 308,277

Delta Electricity: Wallerawang Generating System NSW 16,593 15,458 52,308 23,773 8,930 60,951 54,940 27,629 260,582

Eraring Energy: Eraring Generating System NSW 129,086 115,291 72,120 70,711 67,264 97,987 96,502 159,585 808,546

Macquarie Generation: Liddell Power Station NSW 63,362 199,124 275,082 446,877 571,472 547,348 407,076 156,966 2,667,307

Redbank Project Pty Ltd: Redbank Power NSW 0 0 0 0 0 0 0 0 0 Greenhouse Gas Abatement Program* eenhouse GasReduction Scheme during2010 Table C.17 Category C: Biomass

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Rocky Point Power Project Pty Ltd: Rocky Point QLD 0 0 0 0 364,190 377,617 443,488 451,121 1,636,416 Cogeneration Plant C

Registry data IPART

IPART C

Registry data

Table C.18 Category C: Coal Compliance and Operation ofthe NSWGreeCompliance and Operation Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

CS Energy Ltd: Swanbank B Power Station QLD 0 0 0 0 145,162 145,437 106,916 129,937 527,452

Flinders Operating Services Pty Ltd: Northern SA 0 0 0 31,899 22,862 68,649 0 0 123,410 Power Station

Hazelwood Power: Hazelwood Power Station VIC 251,199 130,906 675,881 780,462 879,398 1,025,716 982,659 1,173,639 5,899,860

IPM Australia Ltd: Loy Yang B Power Station VIC 0 0 0 6,775 216,723 286,826 258,325 279,115 1,047,764

Loy Yang Marketing Management Company Pty VIC 0 0 254,015 86,545 0 0 66,755 70,873 478,188 Ltd: Loy Yang A Power Station Stanwell Corporation Limited: Stanwell Power nhouse Gas Reduction Scheme during2010 nhouse Gas QLD 0 36,337 86,290 198,094 194,665 193,943 196,928 213,030 1,119,287 Station TRUenergy Yallourn Pty Ltd: Yallourn W Power VIC 0 0 9,033 164,423 18,004 142,380 285,595 380,040 999,475 Station

Table C.19 Category C: Hydro

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Hydro Electric Corporation: Gordon Hydro TAS 0 0 0 80,000 0 0 0 0 80,000 Generating System Hydro Electric Corporation: Poatina Hydro TAS 0 0 0 0 0 0 0 0 0 Generating System

Table C.20 Category C: Landfill gas

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total EDL Operations (Lucas Heights) Pty Ltd: Lucas NSW 31,571 0 0 0 0 0 0 0 31,571 Heights 1 LFG Generating System*

Table C.21 Category C: Natural gas

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

AGL Hydro Partnership: Oakey Power Station QLD 0 0 0 0 0 0 0 0 0

Compliance and OperationoftheNSW Gr and Compliance AGL Hydro Partnership: Torrens Island A Power SA0000 1,28712,893024,95739,137 Station AGL Hydro Partnership: Torrens Island B Power SA 0 0 0 0 40,701 0 0 0 40,701 Station Alinta DEBO Pty Ltd: Bairnsdale Generating VIC 1,293 14,603 8,215 5,578 125,309 69,314 0 0 224,312 System* Aurora Energy (Tamar Valley) Pty Ltd: Bairnsdale VIC 0 0 0 0 0 0 12,466 13,133 25,599 Power Station Bell Bay Power Pty Ltd: Bell Bay Power Station Units TAS 0 0 0 140,271 355,276 369,298 84,925 0 949,770 1 and 2*

Enertrade: Oakey Power Station* QLD 0 3,563 0 0 0 0 0 0 3,563 eenhouse GasReduction Scheme during2010 Enertrade: Townsville Power Station* QLD08,45100 00008,451

OneSteel Manufacturing Pty Ltd: OneSteel Whyalla SA 0 0 0 0 58,834 62,047 38,381 16,085 175,347 Steelworks - By-product Turbines OneSteel Manufacturing Pty Ltd: OneSteel Whyalla SA0000 00000 Steelworks - Cogeneration Origin Energy Electricity Ltd: Ladbroke Grove SA 0 0 3,182 30,015 33,954 55,372 59,861 42,972 225,356 Power Station Pelican Point Power Ltd: Pelican Point Power SA 284,984 0 194,934 545,997 986,020 1,114,978 1,064,299 971,351 5,162,563 Station

TRUenergy Pty Ltd: Newport Power Station VIC 0 24,895 0 0 347,888 208,263 140,236 0 721,282 C

TRUenergy Pty Ltd: Torrens Island A Power Station*SA0000 0000 0 Registry data IPART TRUenergy Pty Ltd: Torrens Island B Power Station* SA 0 70,642 0 0 0 0 0 0 70,642

IPART C

Table C.22 Category C: Sewage gas Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total AGL Energy Sales & Marketing Ltd: Werribee VIC 59,381 58,928 100,578 184,989 196,181 179,509 193,274 202,679 1,175,519 Sewage Gas Generating System

Table C.23 Category D: Biomass

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Diamond Energy Pty Ltd: Shepparton Biogas VIC 0 0 0 0 0 563 11,795 3,895 16,253 Generating System Diamond Energy Pty Ltd: Tatura Biogas Generating VIC0000 11,88514,6708,22011,65846,433 System EarthPower Technologies Sydney Pty Ltd: Camellia NSW 0 10,623 24,619 34,543 28,242 21,621 21,981 26,389 168,018 Bio-Digester Generating System nhouse Gas Reduction Scheme during2010 nhouse Gas Green Pacific Energy Stapylton No.1 Pty Ltd: QLD005,3700 00005,370 Stapylton No.1 Generating System Integrated Forest Products Pty Ltd: Hume ACT ACT 0 0 0 0 0 0 0 0 0 Cogeneration Plant (Future Project)* Visy Pulp & Paper Pty Ltd: Tumut Cogeneration NSW 542 353 532 622 589 1,642 561 0 4,841 Generating System

Table C.24 Category D: Coal

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

CS Energy Ltd: Kogan Creek Power Station QLD 0 0 0 0 0 70,001 7,026 153,289 230,316

Compliance and OperationoftheNSW Gr and Compliance Millmerran Energy Trader Pty Ltd: Millmerran QLD 0 92,553 78,624 74,368 94,889 163,269 166,457 238,059 908,219 Power Station Queensland Alumina Limited: Additional Steam QLD 0 0 0 0 0 0 0 0 0 from Cogeneration Tarong Energy Corporation Ltd: Tarong North QLD 0 38,112 80,869 117,273 0 176,158 130,828 184,691 727,931 Power Station

Table C.25 Category D: Coal seam methane

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Arrow (Generation) Pty Ltd: Daandine Power NSW 0 0 0 0 12,978 29,744 16,575 5,351 64,648 Station eenhouse GasReduction Scheme during2010 QGC Sales Qld Pty Ltd: Condamine Power Station QLD0000 00011,17711,177

RTA Yarwun Pty Ltd: Yarwun 2 Cogeneration QLD 0 0 0 0 0 0 0 360,386 360,386

Registry data IPART

100

IPART C

Table C.26 Category D: Landfill gas Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total AGL Energy Services Pty Ltd: Glenorchy LFG TAS 0 0 0 18,333 39,992 0 31,259 27,525 117,109 Generating System AGL Energy Services Pty Ltd: Hobart LFG TAS 0 0 0 23,423 29,308 0 21,924 21,092 95,747 Generating System AGL Energy Services Pty Ltd: Kincumber LFG NSW 0 0 0 0 0 0 27,630 28,447 56,077 Generating System AGL Energy Services Pty Ltd: West Nowra LFG NSW 16,595 23,896 23,892 27,414 33,791 0 19,291 23,143 168,022 Generating System AGL Energy Services Pty Ltd: Woy Woy LFG NSW 0 0 0 0 0 0 26,291 23,938 50,229 Generating System Boral Recycling Pty Ltd: Landfill Gas to Energy VIC 0 0 0 25,243 26,258 54,653 74,447 81,758 262,359 Facility, Deer Park nhouse Gas Reduction Scheme during2010 nhouse Gas EDL LFG (ACT) Pty Ltd: Belconnen LFG Generating ACT 33,656 30,541 29,973 27,870 25,256 21,008 21,373 19,803 209,480 System EDL LFG (ACT) Pty Ltd: Mugga Lane LFG Generating ACT 60,542 68,727 80,089 98,561 95,720 102,242 101,098 102,451 709,430 System EDL LFG (NSW) Pty Ltd: Grange Avenue LFG NSW 0 0 0 1,953 34,633 35,935 33,196 35,943 141,660 Generating System EDL LFG (NSW) Pty Ltd: Lucas Heights 2 LFG NSW 382,599 396,207 535,048 506,381 501,786 442,028 499,224 477,169 3,740,442 Generating System EDL LFG (Qld) Pty Ltd: Roghan Road LFG QLD 0 12,001 27,315 22,196 14,230 16,618 17,851 13,707 123,918 Generating System EDL LFG (Vic) Pty Ltd: Brooklyn LFG Generating VIC 0 29,267 78,294 75,166 78,728 87,477 76,720 81,042 506,694 System EDL Operations (Brooklyn) Pty Ltd: Brooklyn LFG VIC 37,733 23,529 0 0 0 0 0 0 61,262 Generating System* EDL Operations (Eastern Creek) Pty Ltd: Eastern NSW 73,215 130,164 142,918 147,433 146,542 138,996 154,642 110,839 1,044,749 Creek LFG Generating System EDL Operations (Eastern Creek) Pty Ltd: Jacks Gully NSW 34,041 35,115 36,529 41,971 70,141 75,309 77,533 77,265 447,904 LFG Generating System

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Energy Impact Pty Ltd: Molendinar LFG Generating QLD 15,203 11,501 10,955 8,707 7,562 5,200 3,026 3,384 65,538 System Energy Impact Pty Ltd: Mornington LFG Generating VIC 10,157 8,801 18,109 16,929 18,210 12,804 11,372 8,299 104,681 System Compliance and OperationoftheNSW Gr and Compliance Energy Impact Pty Ltd: Reedy Creek LFG QLD 6,446 811 0 0 0 0 0 0 7,257 Generating System* Energy Impact Pty Ltd: Sleemans Sports Centre LFG QLD 0 0 0 0 0 9,789 7,160 7,767 24,716 Cogeneration System Energy Impact Pty Ltd: Stapylton LFG Generating QLD 20,361 23,250 26,701 21,297 31,578 18,488 37,324 43,108 222,107 System Energy Impact Pty Ltd: Suntown LFG Generating QLD 27,020 45,309 50,551 36,089 29,853 20,429 8,513 13,767 231,531 System Energy Impact Pty Ltd: Wyndham LFG Generating VIC 14,619 22,777 19,945 27,247 21,926 17,515 10,932 14,246 149,207 System LMS Generation Pty Ltd: Albury Renewable Energy NSW 0 0 0 0 0 0 0 0 0 Facility (Future project) eenhouse GasReduction Scheme during2010 LMS Generation Pty Ltd: Awaba Renewable Energy NSW 0 0 0 0 30,061 34,745 34,104 30,583 129,493 Facility LMS Generation Pty Ltd: Ballarat Renewable Energy VIC 0 0 0 0 0 14,525 16,148 17,025 47,698 Facility LMS Generation Pty Ltd: Bendigo Renewable VIC 0 0 0 0 0 8,293 19,041 18,773 46,107 Energy Facility LMS Generation Pty Ltd: Birkdale Renewable QLD 0 0 0 0 0 0 0 16,479 16,479 Energy Facility LMS Generation Pty Ltd: Drysdale Renewable VIC 0 0 0 0 0 0 0 0 0 Energy Facility (Future project)

LMS Generation Pty Ltd: Eastern Creek 2 Gas C

NSW 0 0 0 0 0 129,429 238,451 218,937 586,817 Utilisation Facility Registry data LMS Generation Pty Ltd: Hallam Road Renewable NSW 0 0 0 0 29,241 53,354 83,921 117,642 284,158

IPART Energy Facility LMS Generation Pty Ltd: Remount Renewable TAS 0 0 0 0 34,074 35,409 39,794 75,269 184,546

Energy Facility 101

102

IPART C

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation LMS Generation Pty Ltd: Rochedale Renewable QLD 0 14,311 121,597 123,592 123,800 104,050 106,048 126,421 719,819 Energy Facility LMS Generation Pty Ltd: Shepparton Renewable VIC 0 0 0 0 0 0 11,538 19,127 30,665 Energy Facility LMS Generation Pty Ltd: Summer Hill Renewable NSW 0 0 0 0 0 0 26,288 64,440 90,728 Energy Facility LMS Generation Pty Ltd: Tweed Renewable Energy NSW 0 0 0 7,861 11,355 11,631 11,668 11,680 54,195 Facility LMS Generation Pty Ltd: Whitwood Road QLD 0 13,727 39,497 40,459 40,616 34,260 33,973 33,806 236,338 Renewable Energy Facility LMS Generation Pty Ltd: Wollert Renewable Energy VIC 0 0 0 31,560 70,520 110,322 123,583 148,685 484,670 Facility LMS Generation Pty Ltd: Wyong Renewable Energy NSW 0 0 0 0 0 0 0 1,887 1,887 nhouse Gas Reduction Scheme during2010 nhouse Gas Facility Veolia Environmental Services (Australia) Pty Ltd: Ti QLD 0 0 0 0 0 0 26,942 56,665 83,607 Tree LFG Woodlawn Bioreactor Energy Pty Ltd: Woodlawn NSW 0 0 0 0 0 17,755 48,117 62,961 128,833 Bioreactor

Table C.27 Category D: Natural gas

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total AGL Energy Services (Queensland) Pty Ltd: QLD 0 970 0 0 0 0 0 0 970 Moranbah Generating System*

Compliance and OperationoftheNSW Gr and Compliance AGL Energy Services Pty Ltd: Symex Cogeneration VIC 0 0 0 2,907 12,267 13,181 13,850 13,615 55,820 System

AGL Hydro Partnership: Somerton Power Station VIC 0 0 0 0 882 25,074 15,444 12,870 54,270

AGL South Australia Pty Ltd: Coopers Brewery SA 6,593 6,106 6,421 6,711 6,457 6,812 8,550 7,674 55,324 Cogeneration Generating System

Alinta EATM Pty Ltd: Tamar Valley Power Station* TAS 0 0 0 0 436 6,500 0 0 6,936

Aurora Energy (Tamar Valley) Pty Ltd: Bell Bay TAS0000 0014,38112,15526,536 Three Power Station Aurora Energy (Tamar Valley) Pty Ltd: Tamar Valley TAS 0 0 0 0 0 0 218,278 628,617 846,895 Combined Cycle Power Station

eenhouse GasReduction Scheme during2010 Aurora Energy (Tamar Valley) Pty Ltd: Tamar Valley TAS0000 0030,8005,06335,863 Peaking Power Station

Bell Bay Power Pty Ltd: Bell Bay Three* TAS 0 0 0 3,365 0 0 0 0 3,365

Braemar Power Project Pty Ltd: Braemar Power QLD0000 068,099105,262 144,057 317,418 Station

CS Energy Ltd: Swanbank E Power Station QLD 228,718 359,674 68,262 73,598 84,336 121,715 495,639 1,065,171 2,497,113

Delta Electricity: Colongra Power Station NSW0000 003,76311,86215,625

GridX Power Pty Ltd: GridX MiniGrid Cogeneration - NSW 0 0 0 0 3 0 0 0 3 Glenfield GEN* C

Narrabri Power Pty Ltd: Wilga Park Power Station NSW 0 10,557 15,761 4,817 1,689 1,243 552 0 34,619 Registry data

IPART NewGen Braemar 2 Partnership: Braemar 2 Power QLD 0 0 0 0 0 0 37,520 89,284 126,804 Station

103

104

IPART C

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation NewGen Power Pty Ltd: Braemar Power Station* QLD0000 84,16262,80900146,971

Origin Energy Electricity Ltd: Darling Downs Power QLD 0 0 0 0 0 0 0 1,145,450 1,145,450 Station Origin Energy Electricity Ltd: Mortlake Power VIC0000 00000 Station Origin Energy Electricity Ltd: Quarantine Power SA 5,542 11,418 11,359 25,769 16,362 20,212 51,830 54,688 197,180 Station Origin Energy Electricity Ltd: Spring Gully Power QLD0000 00000 Station Origin Energy Electricity Ltd: Uranquinty Power NSW 0 0 0 0 0 8,773 71,829 96,494 177,096 Station Snowy Hydro Ltd: Laverton North Generating VIC 0 0 0 101 139,280 41,537 30,600 55,450 266,968 nhouse Gas Reduction Scheme during2010 nhouse Gas System

Snowy Hydro Ltd: Valley Power Generating System VIC 0 0 0 0 53,231 12,776 9,311 3,666 78,984

TRUenergy Tallawarra Pty Ltd: Tallawarra Power NSW0000 052,2201,051,999 1,482,566 2,586,785 Station Unit 1 Waste Recycling and Processing Corporation (WSN): Ecolibrium Mixed Waste Facility NSW 0 0 0 0 0 0 0 0 0 (Generation)

Table C.28 Category D: Sewage gas

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total EnergyAustralia: QAF Power Project - Generating NSW 0 0 0 0 0 0 0 0 0 System (Generation)* Sydney Water Corporation: Bondi STP NSW 0 0 0 0 0 0 4,173 3,036 7,209 Cogeneration Plant (Generation)

Table C.29 Category D: Waste coal mine gas

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total BlueScope Steel (AIS) Pty Ltd: Steelworks NSW 0 0 0 0 0 0 0 0 0 Generation Project (Generation) (Future Project)

Compliance and OperationoftheNSW Gr and Compliance Country Energy: Tahmoor Power Station NSW 10,192 10,428 22,728 7,368 3,073 47 500 1,373 55,709 (Generation)

Country Energy: Teralba Power Station NSW 0 158,334 258,704 222,957 179,111 137,033 113,210 78,944 1,148,293

EDL CSM (Qld) Pty Ltd: German Creek CMM QLD 0 0 0 125,535 995,634 721,693 827,021 849,373 3,519,256 Generating System EDL Projects (Australia) Pty Ltd: Moranbah North QLD 0 0 0 0 0 128,205 1,104,273 1,187,310 2,419,788 CMM Generating System

Enertrade: Moranbah Power Generation Facility* QLD0000 0000 0

Envirogen (Oaky) Pty Ltd: Bulga WCMG Power NSW 0 0 0 0 0 0 0 0 0 Station (Future Project)

eenhouse GasReduction Scheme during2010 Envirogen (Oaky) Pty Ltd: Glennies Creek WCMG NSW0000 18,343104,335 203,449 259,920 586,047 Generating System Envirogen Pty Ltd: Oaky Creek WCMG Generating QLD 0 0 0 181,362 470,927 441,661 480,673 542,698 2,117,321 System Transfield Services (Australia) Pty Ltd: Picardy QLD 0 0 0 0 0 0 0 0 0 Power Station (future project)* C

Registry data IPART

105

106

IPART C

C.3.1 DSA Rule certificate creation by calculation method and project Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Table C.30 Default Abatement Factors Method

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

AGL Electricity Ltd: Gas Hot Water Systems - NSW* NSW 0 17,146 28,926 5,560 0 0 0 – 51,632

AGL Electricity Ltd: Gas Hot Water Systems - ACT* ACT 0 0 0 1,460 0 0 0 – 1,460

AGL Hydro Partnership: Gas Hot Water Systems NSW 0 0 0 24,340 21,900 25,569 13,639 – 85,448 Project - NSW* AGL Hydro Partnership: Gas Hot Water Systems ACT 0 0 0 5,400 7,320 1,660 1,300 – 15,680 Project - ACT* Alliance Network International: DRIP - Residential NSW 0 0 0 0 525,146 2,520,371 0 – 3,045,517 installations in NSW* nhouse Gas Reduction Scheme during2010 nhouse Gas Alliance Network International: DRIP - Residential ACT0000 1,7586,7620– 8,520 installations in ACT* Alliance Network International: DRIP - Commercial NSW 0 0 0 0 150,731 163,178 0 – 313,909 installations in NSW* Alliance Network International: DRIP - Commercial ACT0000 07,0890– 7,089 installations in ACT* AMRS (Aust) Pty Ltd: Energy Efficiency Refit NSW 0 0 0 0 0 0 0 – 0 Program - Residential NSW* AMRS (Aust) Pty Ltd: Energy Efficiency Refit ACT0000 000– 0 Program - Residential ACT* AMRS (Aust) Pty Ltd: Energy Efficiency Refit NSW 0 0 0 0 0 0 0 – 0 Program - Commercial NSW* AMRS (Aust) Pty Ltd: Energy Efficiency Refit ACT0000 000– 0 Program - Commercial ACT* APP Corporation Pty Ltd: Pilot DOH Residential NSW 0 0 0 0 0 0 0 – 0 Energy Efficiency Program* Australian Heating Solutions Pty Ltd: NSW Electric NSW 0 0 0 4,480 2,280 2,040 180 – 8,980 to Gas Hotwater Upgrade Scheme*

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Australian Heating Solutions Pty Ltd: Installation of NSW 0 0 0 9,728 144,884 56,712 0 – 211,324 CFLs & flow restrictors - NSW Res* Australian Heating Solutions Pty Ltd: Installation of ACT0000 000– 0 CFLs & flow restrictors - ACT Res* Compliance and OperationoftheNSW Gr and Compliance Australian Heating Solutions Pty Ltd: Installation of NSW 0 0 0 0 22,103 8,145 0 – 30,248 CFLs & flow restrictors - NSW Comm* Australian Heating Solutions Pty Ltd: Installation of ACT0000 000– 0 CFLs & flow restrictors - ACT Comm* Big Switch Projects: Installation of CFLs - NSW NSW 0 0 0 0 0 0 0 – 0 Residential* Big Switch Projects: Installation of Gas Hot Water NSW0000 000– 0 Systems - NSW Res* Big Switch Projects: Sales of CFLs and Showerheads NSW 0 0 0 0 0 0 0 – 0 - NSW Res* Biogy Pty Ltd: Electricity to Gas Hot Water NSW 0 4,260 6,380 6,260 9,600 2,760 0 – 29,260 Initiative* eenhouse GasReduction Scheme during2010 BTU Holdings Australia Pty Ltd: Replacing electric NSW 0 0 60 0 0 0 0 – 60 with gas hot water systems* Carbon Reduction Institute Pty Ltd: Installation of NSW0000 7,91463,5930– 71,507 CFLs - NSW Residential* Carbon Reduction Institute Pty Ltd: Installation of ACT 0 0 0 0 0 0 0 – 0 Gas Boosted Solar HWS - ACT Res* Carbon Reduction Institute Pty Ltd: Installation of NSW0000 000– 0 Gas Boosted Solar HWS - NSW Com* Carbon Reduction Institute Pty Ltd: Installation of ACT 0 0 0 0 0 0 0 – 0 Gas Boosted Solar HWS - ACT Com*

Carbon Reduction Institute Pty Ltd: Giveaway/Sale C

NSW0000 2900– 29 of CFLs and Showerheads - NSW* Registry data Carbon Reduction Institute Pty Ltd: Giveaway/Sale ACT 0 0 0 0 0 0 0 – 0

IPART of CFLs and Showerheads - ACT* Carbon Reduction Institute Pty Ltd: Installation of ACT0000 248460– 294

CFLs - ACT Residential* 107

108

IPART C

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Carbon Reduction Institute Pty Ltd: Installation of NSW 0 0 0 0 11,147 0 0 – 11,147 CFLs - NSW Commercial* Carbon Reduction Institute Pty Ltd: Installation of ACT0000 000– 0 CFLs - ACT Commercial* Carbon Reduction Institute Pty Ltd: Installation of NSW 0 0 0 0 0 0 0 – 0 Gas Hot Water Systems - NSW Res* Carbon Reduction Institute Pty Ltd: Installation of ACT0000 000– 0 Gas Hot Water Systems - ACT Res* Carbon Reduction Institute Pty Ltd: Installation of NSW 0 0 0 0 0 0 0 – 0 Gas Hot Water Systems - NSW Com* Carbon Reduction Institute Pty Ltd: Installation of ACT0000 000– 0 Gas Hot Water Systems - ACT Com* Carbon Reduction Institute Pty Ltd: Installation of NSW 0 0 0 0 0 0 0 – 0 nhouse Gas Reduction Scheme during2010 nhouse Gas Gas Boosted Solar HWS - NSW Res* Country Energy: Countrygreen Gas Hot Water NSW0000 000– 0 Replacement* Country Energy: Countrygreen Town Energy NSW 0 0 0 0 0 0 0 – 0 Efficiency Program* Demand Manager Pty Ltd: Carbon Saver Project - NSW0000 09,5340– 9,534 NSW* Demand Manager Pty Ltd: Carbon Saver Project - ACT 0 0 0 0 0 0 0 – 0 ACT* Easy Being Green Holdings Pty Ltd: Lighten Your NSW 0 0 38,400 278,754 0 0 0 – 317,154 Load* Easy Being Green Pty Ltd: Lighten Your Load NSW - NSW 0 0 0 2,694,658 1,112,399 434,565 0 – 4,241,622 NSW Residential* Easy Being Green Pty Ltd: Lighten Your Load NSW - ACT 0 0 0 43,198 0 0 0 – 43,198 ACT Residential* Easy Being Green Pty Ltd: Lighten Your Load NSW - NSW 0 0 0 0 95,496 0 0 – 95,496 NSW Commercial* Easy Being Green Pty Ltd: Lighten Your Load NSW - ACT0000 70000– 700 ACT Commercial*

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total EcoSmart Programs Pty Ltd: EcoSmart Living NSW 0 0 0 2,348 5,864 0 0 – 8,212 Program Pilot - Western Sydney* EnergyAustralia: Compact Fluorescent Lamp NSW 0 182,295 3,016 1,256,576 47,258 47,569 0 – 1,536,714 Promotion - NSW* Compliance and OperationoftheNSW Gr and Compliance EnergyAustralia: Compact Fluorescent Lamp ACT 0 0 0 29,755 5,835 271 0 – 35,861 Promotion - ACT* EnergyAustralia: Electric to Gas Hot Water NSW 0 0 0 160 2,980 100 460 – 3,700 Conversion - NSW Res* EnergyAustralia: Electric to Gas Hot Water ACT 0 0 0 0 0 0 0 – 0 Conversion - ACT Res* EnergyAustralia: Electric to Gas Hot Water NSW0000 000– 0 Conversion - NSW Com* EnergyAustralia: Electric to Gas Hot Water ACT 0 0 0 0 0 0 0 – 0 Conversion - ACT Com*

EnergyAustralia: Residential Households in NSW* NSW 0 34,010 28,928 12,718 25,215 91,421 0 – 192,292 eenhouse GasReduction Scheme during2010 EnergyAustralia: Residential Households in ACT* ACT 0 0 0 0 0 0 0 – 0

EnergyAustralia: Commercial Premises in NSW* NSW0000 000– 0

EnergyAustralia: Commercial Premises in ACT* ACT 0 0 0 0 0 0 0 – 0

EnergyAustralia: EnergySave On Line Shop - NSW* NSW 0 0 0 3,798 212 0 0 – 4,010

EnergyAustralia: EnergySave On Line Shop - ACT* ACT 0 0 0 0 0 0 0 – 0 C

EnergyAustralia: Spare Fridge Retirement Program* NSW 0 0 0 8,016 0 0 0 – 8,016 Registry data Envirocare & Savers Pty Ltd t/a Wellbeinggreen: NSW 0 0 0 0 0 0 20,447 – 20,447 Light Bulb & Flow Restrictor Installation program* IPART Fieldforce Services Pty Ltd: Retrofit Program - NSW0000 4,609,421 1,926,587 0 – 6,536,008

Residential NSW* 109

110

IPART C

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Fieldforce Services Pty Ltd: Retrofit Program - ACT 0 0 0 0 262,340 123,885 0 – 386,225 Residential ACT* Fieldforce Services Pty Ltd: Retrofit Program - NSW0000 314,501 425,876 0 – 740,377 Commercial NSW* Fieldforce Services Pty Ltd: Retrofit Program - ACT 0 0 0 0 20,299 2,388 0 – 22,687 Commercial ACT* Fieldforce Services Pty Ltd: Give Away to Reduce NSW 0 0 0 1,331,288 305,815 0 0 – 1,637,103 Demand Program - NSW* Fieldforce Services Pty Ltd: Give Away to Reduce ACT 0 0 0 79,964 34,658 0 0 – 114,622 Demand Program - ACT*

Go Green Today Pty Ltd: Free Energy Saving Offer* NSW0000 000– 0

Integral Energy Australia: Give-Away of CFLs and NSW 0 0 0 0 5,195 0 813 – 6,008 nhouse Gas Reduction Scheme during2010 nhouse Gas Showerheads*

Integral Energy Australia: Installation of CFLs* NSW0000 4,6870105– 4,792

Integral Energy Australia: Home Lighting Efficiency NSW 0 0 0 113,297 0 0 0 – 113,297 Program* Koala Lamps Pty Ltd: Compact Lamp Supply to end NSW 0 0 13,747 21,423 19,982 18,762 0 – 73,914 users* Low Energy Supplies and Services Pty Ltd: Direct NSW 0 0 23,748 1,329,144 486,465 953,246 0 – 2,792,603 Sales and Giveaways - NSW Residential* Low Energy Supplies and Services Pty Ltd: Direct ACT 0 0 0 3,506 275 0 0 – 3,781 Sales and Giveaways - ACT Residential* Low Energy Supplies and Services Pty Ltd: Direct NSW 0 0 0 0 144,258 45,499 0 – 189,757 Sales and Giveaways - NSW Commercial* Low Energy Supplies and Services Pty Ltd: Direct ACT0000 7,04200– 7,042 Sales and Giveaways - ACT Commercial* Low Energy Supplies and Services Pty Ltd: Project NSW 7,741 5,747 10,545 6,422 0 0 0 – 30,455 #1/2003*

Macquarie Generation: Staff CFL Issue Scheme* NSW 0 0 0 1,310 0 0 0 – 1,310

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Murray Regional Development Board: Murray NSW 0 0 0 0 5,148 31,328 10,661 – 47,137 Energy Savings Program* Neco Group Pty Ltd: Showerheads and CFL Globe NSW0000 000– 0 Sales - NSW Residential* Compliance and OperationoftheNSW Gr and Compliance Neco Group Pty Ltd: Showerheads and CFL Globe ACT 0 0 0 0 0 0 0 – 0 Sales - ACT Residential* Neco Group Pty Ltd: Showerheads and CFL Globe NSW0000 000– 0 Sales - NSW Commercial* Neco Group Pty Ltd: Showerheads and CFL Globe ACT 0 0 0 0 0 0 0 – 0 Sales - ACT Commercial* Neco Hardware Pty Ltd: Showerheads & CFL Globe NSW 0 0 311,200 310,416 250,484 0 0 – 872,100 Sales - NSW Residential* Neco Hardware Pty Ltd: Showerheads & CFL Globe ACT 0 0 0 22,788 75,402 0 0 – 98,190 Sales - AT Residential* Neco Hardware Pty Ltd: Showerheads & CFL Globe NSW0000 5,93800– 5,938 Sales - NSW Commercial* eenhouse GasReduction Scheme during2010 Neco Hardware Pty Ltd: Showerheads & CFL Globe ACT 0 0 0 0 14,836 0 0 – 14,836 Sales - ACT Commercial* Neco Holdings Pty Ltd: Showerheads and CFL NSW0000 01130– 113 Globe Sales - NSW Residential* Neco Holdings Pty Ltd: Showerheads and CFL ACT 0 0 0 0 0 0 0 – 0 Globe Sales - ACT Residential* Neco Holdings Pty Ltd: Showerheads and CFL NSW0000 000– 0 Globe Sales - NSW Commercial* Neco Holdings Pty Ltd: Showerheads and CFL ACT 0 0 0 0 0 0 0 – 0 Globe Sales - ACT Commercial*

Neco Lifestyles: Showerheads & CFL Globes web C

NSW 0 2 53,638 0 0 0 0 – 53,640 sales* Registry data

Next Energy Pty Ltd: Fridge Buyback Program* NSW 0 0 0 11,743 21,400 17,256 29,685 – 80,084 IPART

Origin Energy Electricity Ltd: CFL Giveaway* NSW 0 0 287,101 403,859 0 0 0 – 690,960

111

112

IPART C

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Origin Energy Electricity Ltd: LPG Boosted Hot NSW 0 0 0 0 0 0 0 – 0 Water Systems - NSW* Origin Energy Electricity Ltd: LPG Boosted Hot ACT0000 000– 0 Water Systems - ACT* Philips Electronics Australia Limited: Light Globe NSW 0 0 0 63,550 116,058 0 0 – 179,608 Replacement - NSW* Philips Electronics Australia Limited: Light Globe ACT 0 0 0 26 10,366 0 0 – 10,392 Replacement - ACT* Rheem Australia Pty Ltd: Rheem Gas Hot Water - NSW 0 0 0 2,120 4,420 8,080 2,140 – 16,760 NSW* Rheem Australia Pty Ltd: Rheem Gas Hot Water - ACT 0 0 0 120 260 60 20 – 460 ACT* SkyNet Systems Pty Ltd: Installation of CFLs - NSW NSW 0 0 0 0 0 28,106 0 – 28,106 nhouse Gas Reduction Scheme during2010 nhouse Gas Residential* SkyNet Systems Pty Ltd: Installation of CFLs - ACT ACT0000 03270– 327 Residential* SkyNet Systems Pty Ltd: Installation of CFLs - NSW NSW 0 0 0 0 0 1,179 0 – 1,179 Commercial* SkyNet Systems Pty Ltd: Installation of CFLs - ACT ACT0000 000– 0 Commercial* Sydney Water Corporation: DIY Water Saving Kit NSW 0 0 0 58,628 57,401 20,561 3,054 – 139,644 Program* Sydney Water Corporation: Residential Shower NSW 0 91,102 197,303 191,532 126,104 40,148 6,572 – 652,761 Retrofit Programme* Sydney Water Corporation: Washing Machine NSW 0 0 0 39,237 91,494 103,051 27,615 – 261,397 Rebate Program* Watts Green Pty Ltd: AAA Energy Efficiency Refit NSW0000 5,000112,626 0 – 117,626 Program - NSW Residential* Watts Green Pty Ltd: AAA Energy Efficiency Refit ACT 0 0 0 0 0 0 0 – 0 Program - ACT Residential* Watts Green Pty Ltd: AAA Energy Efficiency Refit NSW 0 0 0 0 0 75,055 0 – 75,055 Program - NSW Commercial*

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Watts Green Pty Ltd: AAA Energy Efficiency Refit ACT 0 0 0 0 0 0 0 – 0 Program - ACT Commercial*

Compliance and OperationoftheNSW Gr and Compliance eenhouse GasReduction Scheme during2010 C

Registry data IPART

113

114

IPART C

Table C.31 Generation Emissions Method Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total BlueScope Steel (AIS) Pty Ltd: Steelworks NSW 0 0 0 0 0 0 0 0 0 Generation Project (DSA) (Future Project)

Country Energy: Tahmoor Power Station (DSA) NSW 110,751 151,468 209,648 130,991 148,960 61,039 65,584 86,333 964,774

Endeavour Coal Pty. Ltd: WestVAMP NSW 0 0 0 0 168,755 210,643 144,042 202,473 725,913

EnergyAustralia: QAF Power Project* NSW0000 0000 0

GridX Power Pty Ltd: GridX MiniGrid Cogeneration - NSW 0 0 0 0 9 10 0 0 19 Glenfield DSA* Macquarie University: Macquarie University Library NSW0000 001350135 Cogeneration Plant nhouse Gas Reduction Scheme during2010 nhouse Gas Sydney Water Corporation: Bondi STP NSW 0 0 0 0 0 0 12,183 27,201 39,384 Cogeneration Plant (DSA) Sydney Water Corporation: Cronulla STP NSW 3,542 937 4,044 5,882 926 5,349 6,336 8,577 35,593 Cogeneration Plant Sydney Water Corporation: Glenfield STP NSW 0 0 0 0 0 0 724 11,844 12,568 Cogeneration Plant Sydney Water Corporation: Liverpool STP NSW0000 001,5777,9109,487 Cogeneration Plant Sydney Water Corporation: Malabar STP NSW 51,157 55,834 49,654 55,121 41,063 62,938 60,056 68,034 443,857 Cogeneration Plant Sydney Water Corporation: North Head NSW0000 020,80419,48430,85271,140 Cogeneration Plant Sydney Water Corporation: North Head STP Hydro NSW 0 0 0 0 0 0 0 6,859 6,859 Generating System Sydney Water Corporation: Warriewood STP NSW0000 004744,0744,548 Cogeneration Plant Sydney Water Corporation: Wollongong STP NSW 0 0 0 0 0 0 3,702 8,970 12,672 Cogeneration Plant

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Sydney West Area Health Service: EPC and GEEIP NSW0000 0005,3485,348 (Cogeneration) Visy Pulp & Paper Pty Ltd: Tumut On-site NSW 112,947 123,982 171,870 249,446 204,491 212,990 204,242 221,571 1,501,539 Cogeneration Plant Compliance and OperationoftheNSW Gr and Compliance Waste Recycling and Processing Corporation NSW 0 0 0 0 0 0 0 0 0 (WSN): Ecolibrium Mixed Waste Facility (DSA)

Table C.32 Metered Baseline Method – baseline per unit of output

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Carter Holt Harvey Australia Pty Ltd: Refiner NSW 0 0 0 8,065 14,249 16,007 6,231 – 44,552 Control* Hydro Aluminium Kurri Kurri Pty Ltd: Smelter NSW 0 0 0 22,623 40,439 40,038 44,260 – 147,360 upgrade and retrofit*

Orica Australia Pty Ltd: Botany Chlorine Plant* NSW 23,668 20,667 19,322 20,637 25,335 23,614 12,082 – 145,325 eenhouse GasReduction Scheme during2010

Table C.33 Metered Baseline Method – baseline unaffected by output

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Sutherland Shire Council: Sutherland Leisure NSW 0 0 393 0 0 0 0 – 393 Centre Energy Performance Contract*

Sydney West Area Health Service: EPC and GEEIP NSW 0 1,615 3,794 5,910 6,111 5,997 4,122 – 27,549

Registry data IPART

115

116

IPART C

Table C.34 Metered Baseline Method – normalised by NABERS scheme Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Charter Hall Asset Services Limited: Building Energy NSW 0 0 190 4,544 6,223 7,501 4,504 – 22,962 Consumption Reduction* Eureka Funds Management: Eureka ABGR Energy NSW0000 000– 0 Efficiency Program Investa Properties Ltd: Office Buildings assessed NSW 0 10,337 8,011 7,914 11,237 10,393 6,109 – 54,001 using the ABGR - NSW* Investa Properties Ltd: Office Buildings assessed ACT 0 0 0 133 121 84 44 – 382 using the ABGR - ACT* Stockland Property Management Pty Ltd: ABGR NSW 0 0 0 165 3,073 2,838 0 – 6,076 Energy Monitoring and Modification - NSW* Stockland Property Management Pty Ltd: ABGR ACT 0 0 0 4 38 436 0 – 478 Energy Monitoring and Modification - ACT* nhouse Gas Reduction Scheme during2010 nhouse Gas

Table C.35 Project Impact Assessment Method

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total

Amcor Ltd: Air conditioning timers (Regents Park)* NSW 0 125 753 0 0 262 133 – 1,273 Compliance and OperationoftheNSW Gr and Compliance Amcor Ltd: Botany Mill Efficiency Initiatives* NSW 0 0 0 709 0 3,420 1,655 – 5,784

Amcor Ltd: Lighting voltage reduction (Botany & NSW 0 104 627 0 0 217 110 – 1,058 Smithfield)*

Amcor Ltd: Skylight upgrade (Revesby)* NSW 0 54 0 0 0 0 0 – 54

Amcor Ltd: Upgrade of blowers with conveyors NSW 0 207 1,251 0 0 436 220 – 2,114 (Revesby)* Amcor Ltd: Upgrade of blowers with VSD NSW 0 58 390 0 0 121 61 – 630 conveyors (Revesby)* Amcor Ltd: Upgrade of pumps with VSD units NSW 0 289 1,749 0 0 608 308 – 2,954 (Matraville)* eenhouse GasReduction Scheme during2010 BOC Ltd: Port Kembla LMPC* NSW 0 0 3,288 1,358 0 4,369 0 – 9,015

Boral Ltd: Berrima Kiln 6 Upgrade* NSW 0 0 0 6,589 14,818 7,884 8,651 – 37,942

Commonwealth Bank of Australia: Branch network NSW 0 263 511 510 544 523 259 – 2,610 BMS upgrade* Commonwealth Bank of Australia: Lighting NSW 0 252 510 518 524 533 270 – 2,607 controls* Commonwealth Bank of Australia: Voltage NSW 0 315 624 633 607 548 268 – 2,995 reduction in branch network lighting* Commonwealth Bank of Australia: VSD upgrade on NSW 0 53 106 108 109 110 56 – 542 cooling fans & condenser pump* C

Continental Carbon Australia Pty Ltd: Installation of Registry data NSW 0 123 0 252 0 259 0 – 634 VSD on boiler fan*

IPART Demand Manager Pty Ltd: Lighting Aggregation NSW 0 0 0 8,024 12,590 14,022 7,315 – 41,951 Project*

117

118

IPART C

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Demand Manager Pty Ltd: PFC Aggregation Project NSW0000 1,6503250– 1,975 - NSW Commercial PFC 1* Demand Manager Pty Ltd: PFC Aggregation Project NSW 0 0 0 0 1,865 0 0 – 1,865 - NSW Industrial PFC 1* Demand Manager Pty Ltd: PFC Aggregation Project ACT0000 000– 0 - ACT Commercial PFC 1* Demand Manager Pty Ltd: PFC Aggregation Project ACT 0 0 0 0 0 0 0 – 0 - ACT Industrial PFC 1* Demand Manager Pty Ltd: PFC Aggregation Project NSW0000 07090– 709 - NSW Industrial PFC 2* Demand Manager Pty Ltd: PFC Aggregation Project NSW 0 0 0 0 0 359 0 – 359 - NSW Commercial PFC 2*

EnergyAustralia: Power Factor Correction* NSW 2,140 2,898 0 0 0 0 0 – 5,038 nhouse Gas Reduction Scheme during2010 nhouse Gas EnergyAustralia: Residential Energy Efficiency Refit NSW 646 2,269 0 0 0 0 0 – 2,915 Pilot Program* Ilum-a-Lite Pty Ltd: Fluorescent Lighting Energy NSW 0 713 1,991 0 0 0 0 – 2,704 Efficiency Project* Manildra Starches Pty Ltd: Spray dryer exhaust fan NSW 0 284 286 291 0 299 0 – 1,160 replacement at Manildra* Merck Sharp & Dohme (Australia) Pty Ltd: Lighting NSW 0 193 1,170 0 0 0 0 – 1,363 voltage reduction* Norske Skog Paper Mills (Aust) Ltd: Deckers Feed NSW 0 0 0 0 0 2,297 2,017 – 4,314 Pump Bypass* NSW Roads and Traffic Authority: Upgrade of Traffic NSW 0 0 193 1,753 0 389 349 – 2,684 Lights* Panthers Rugby League Club Ltd: Lighting upgrade NSW 0 1,048 0 0 0 0 0 – 1,048 at Panthers* Rema Industries and Services Pty Ltd: New air NSW 0 356 789 0 789 0 0 – 1,934 compressor installation* Rheem Australia Pty Ltd: Air compressor PLC NSW 0 671 0 0 0 0 0 – 671 control*

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Riverina Wool Combing Pty Ltd: Air conditioning NSW022200 000– 222 timers* South Tweed Bowls Club Pty Ltd: Upgrade of NSW 0 348 0 348 0 0 91 – 787 lighting at South Tweed Bowls Club* Compliance and OperationoftheNSW Gr and Compliance Stamford Hotels and Resorts Pty Ltd: Airport Lamp NSW025400 000– 254 Replacement* Stamford Hotels and Resorts Pty Ltd: Carbon NSW 0 220 0 0 0 0 0 – 220 Monoxide Monitor* Stamford Hotels and Resorts Pty Ltd: Circular Quay NSW016900 000– 169 lighting upgrade* Stamford Hotels and Resorts Pty Ltd: Double Bay NSW 0 147 0 0 0 0 0 – 147 lamp replacement* Stamford Hotels and Resorts Pty Ltd: Lighting NSW09900 000– 99 voltage reduction (Airport)* Stamford Hotels and Resorts Pty Ltd: North Ryde NSW 0 108 0 0 0 0 0 – 108 lighting upgrade* eenhouse GasReduction Scheme during2010 State Records of New South Wales: Stage 2 lighting NSW04100 000– 41 upgrade* Sydney Harbour Marriott Hotel: Dimming control at NSW 0 31 0 0 0 0 0 – 31 Sydney Harbour Marriott Hotel* The Sustainable Energy Development Authority: NSW1085400 000– 162 Installing LightEco Dimmer Units* The Sustainable Energy Development Authority: NSW 277 139 0 0 0 0 0 – 416 Replacing Water Pumps with VSD Unit* The Sustainable Energy Development Authority: NSW13511600 000– 251 Replacing Effluent Pump with VSD Unit*

The Sustainable Energy Development Authority: C

NSW 235 124 0 0 0 0 0 – 359 Installation of Air Conditioner Timer* Registry data The Sustainable Energy Development Authority: NSW1075400 000– 161

IPART Skylight Upgrade* The Sustainable Energy Development Authority: NSW 67 57 0 0 0 0 0 – 124

Replacing Pneumatic Blowers with VSD Conveyor* 119

120

IPART C

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation The Sustainable Energy Development Authority: NSW41020500 000– 615 Replacing Blower with Conveyor on Necking Line* The Sustainable Energy Development Authority: NSW 53 38 0 0 0 0 0 – 91 Installing LightEco Dimmer Units* The Sustainable Energy Development Authority: NSW 3,375 2,095 0 0 0 0 0 – 5,470 BOC - Port Kembla LMPC* The Sustainable Energy Development Authority: VSD Units on Cooling Tower Fans and Water NSW 92 46 0 0 0 0 0 – 138 Pump* The Sustainable Energy Development Authority: NSW14714700 000– 294 Lighting Controls George St, Parramatta* The Sustainable Energy Development Authority: NSW 177 89 0 0 0 0 0 – 266 Installing LightEco Dimmer Units Stage 1 Set 3*

nhouse Gas Reduction Scheme during2010 nhouse Gas The Sustainable Energy Development Authority: NSW25612800 000– 384 Installing LightEco Dimmer Units Stage 1 Set 2* The Sustainable Energy Development Authority: NSW 191 96 0 0 0 0 0 – 287 Building Management System Upgrade Set 2* The Sustainable Energy Development Authority: NSW32816400 000– 492 Building Management System Upgrade Set 1* The Sustainable Energy Development Authority: NSW 43 86 0 0 0 0 0 – 129 Lighting Controls 52 Martin Place* The Sustainable Energy Development Authority: NSW18312200 000– 305 Installation of VSD on Boiler* The Sustainable Energy Development Authority: NSW 207 125 0 0 0 0 0 – 332 Stage 1 Lighting Upgrade* The Sustainable Energy Development Authority: NSW31927400 000– 593 Stage 2 Lighting Upgrade* The Sustainable Energy Development Authority: NSW 35 35 0 0 0 0 0 – 70 Installing a Computerised Dimming System* The Sustainable Energy Development Authority: NSW28119200 000– 473 Installing LightEco Dimmer Units*

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total The Sustainable Energy Development Authority: NSW 41 42 0 0 0 0 0 – 83 Replacement of 50W Lights with 35W* The Sustainable Energy Development Authority: NSW1125600 000– 168 Replacement of Exhaust Fan with VSD Unit* Compliance and OperationoftheNSW Gr and Compliance The Sustainable Energy Development Authority: NSW 99 50 0 0 0 0 0 – 149 Decommissioning of 50W Lights* The Sustainable Energy Development Authority: NSW743700 000– 111 Replacement of Supply Fan with VSD Unit* The Sustainable Energy Development Authority: NSW 322 161 0 0 0 0 0 – 483 Lighting Upgrade Stage 1* The Sustainable Energy Development Authority: NSW20717800 000– 385 Lighting Upgrade Stage 2* The Sustainable Energy Development Authority: NSW 568 434 0 0 0 0 0 – 1,002 Replacing Air Compressors with VSD Units* The Sustainable Energy Development Authority: NSW1,29824900 000– 1,547 Big W lighting project* eenhouse GasReduction Scheme during2010 The Sustainable Energy Development Authority: NSW 0 0 0 0 0 0 0 – 0 Telstra outside air economy cycle project* The Sustainable Energy Development Authority: NSW924600 000– 138 Lighting Upgrade* The Sustainable Energy Development Authority: Air NSW 65 65 0 0 0 0 0 – 130 Conditioner Chiller Compressor Upgrade* The Sustainable Energy Development Authority: NSW15413200 000– 286 Replacing Electric Heating with Natural Gas Boiler* The Sustainable Energy Development Authority: NSW 588 294 0 0 0 0 0 – 882 Lighting Upgrade*

Tomago Aluminium Company Pty Ltd: Fume C

NSW 6,386 6,747 6,996 4,016 1,585 385 780 – 26,895 Treatment Centre VSD Project* Registry data University of Technology Sydney: Building 2 NSW 0 0 0 543 0 0 0 – 543

IPART Lighting Upgrade* University of Wollongong: Occupancy sensors for NSW 0 771 777 0 777 464 226 – 3,015

lighting controls* 121

122

IPART C

Name: Project name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation University of Wollongong: Voltage reduction for NSW 0 149 150 0 150 157 105 – 711 lighting control* Visy Pulp & Paper Pty Ltd: Cooling Water Pumps NSW 0 0 0 525 629 1,841 320 – 3,315 Efficiency Project* Woolworths Ltd: Supermarket After Hours Lighting NSW 15,517 17,120 17,120 16,978 17,262 18,221 9,140 – 111,358 Controls* nhouse Gas Reduction Scheme during2010 nhouse Gas

C.3.2 CS Rule certificate creation by accreditation

Table C.36 CS Rule certificate creation by accreditation

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Compliance and OperationoftheNSW Gr and Compliance Australian Forest Corporation Pty Ltd: The NSW 0 0 0 0 0 0 0 0 0 Rainforest Carbon Sink Blue-Leafed Mallee Limited: Blue-Leafed Mallee NSW0000 3225085069,76770,899 Carbon Sequestration Pool CO2 Australia Limited: CO2 Australia Carbon NSW 0 0 0 146 759 2,842 11,230 22,885 37,862 Sequestration Pool Forestry Commission of NSW: Forests NSW Carbon NSW 0 166,005 538,471 587,231 630,303 660,382 600,264 596,822 3,779,478 Pool Go-Gen Australia Pty Ltd: Go-Gen Australia Carbon NSW 0 0 0 0 0 0 0 0 0 Sequestration Pool Landcare CarbonSMART Pty Ltd: Landcare NSW 0 0 0 0 0 0 0 0 0 CarbonSMART Carbon Sequestration Pool eenhouse GasReduction Scheme during2010 Mallee Carbon Limited: Mallee Carbon NSW 0 0 0 224 1,467 5,718 10,676 13,170 31,255 Sequestration Pool C

Registry data IPART

123

124

IPART C

C.3.3 LUAC Rule certificate creation by accreditation Registry data

Compliance and Operation ofthe NSWGreeCompliance and Operation Table C.37 LUAC Rule certificate creation by accreditation

Name: Accreditation name Jurisdiction 2003 2004 2005 2006 2007 2008 2009 2010 Total Amcor Packaging (Australia) Pty Ltd: Botany Mill NSW 0 0 3,631 13,175 18,128 22,992 23,423 22,557 103,906 Whole of Site Emissions Reduction BlueScope Steel (AIS) Pty Ltd: Modifications to #25 NSW 0 0 0 77,574 93,267 81,149 32,733 68,623 353,346 Boiler Boral Ltd: Berrima Works Clinker Production NSW 0 0 78,690 157,082 232,563 163,172 0 203,441 834,948 Upgrade Kiln 6 Carter Holt Harvey Australia Pty Ltd: Tumut NSW 0 0 0 3,432 4,418 2,832 1,319 1,267 13,268 Particleboard Plant Hydro Aluminium Kurri Kurri Pty Ltd: Kurri Kurri NSW 0 0 0 516,146 644,404 662,220 708,038 716,860 3,247,668 Primary Aluminium Smelter nhouse Gas Reduction Scheme during2010 nhouse Gas Norske Skog Paper Mills (Aust) Ltd: TMP Heat NSW 0 0 11,956 6,551 15,322 18,547 19,240 23,047 94,663 Recovery Project Orica Australia Pty Ltd: Kooragang Island Ammonia NSW 0 0 0 0 122,155 106,220 104,096 88,760 421,231 Plant Tomago Aluminium Company Pty Ltd: Greenhouse NSW0000 102,489 146,803 146,787 141,510 537,589 Gas Reduction Project

Xstrata Coal NSW Pty Ltd: Bulga Coal Flaring Project NSW 0 0 0 0 0 46,989 420,965 493,315 961,269

Xstrata Coal NSW Pty Ltd: Flaring Project* NSW 0 0 0 16,500 52,899 47,151 60,636 0 177,186

Glossary

This glossary provides a general guide to the terminology used in GGAS. It is designed to be read in conjunction with the Act, Regulation and GGAS Rules. This glossary should not be relied upon as a substitute for legal advice, and does not override the true definitions of these terms in the Act, Regulations or GGAS Rules.

Term Meaning

Abatement Certificate A certificate represents one tonne of carbon dioxide equivalent (tCO2-e) of greenhouse gas emissions, the release of which into the atmosphere was avoided, or which was removed from the atmosphere by the activity in respect of which it was created.

Abator The person contractually liable for the energy consumed in the installation or site that is the subject of a greenhouse abatement activity, or the person nominated to be the abator in respect of greenhouse abatement activity by written agreement. This particularly applies for demand side abatement activities.

Abatement Certificate A person accredited by the Scheme Administrator under one of the Provider Greenhouse Gas Abatement Rules in respect of an abatement activity.

Accreditation Authorisation given by the Scheme Administrator to an abatement certificate provider to create abatement certificates in respect of a specified activity, once eligibility against the Greenhouse Gas Benchmark Rules is satisfied.

Attributable Emissions Determined for each Benchmark Participant each year by multiplying the total electricity purchased (at the transmission node ie, from AEMO plus any other purchases adjusted to the transmission node) by the NSW pool coefficient, less any abatement certificates (ie, NGACs and, if appropriate, LUACs) surrendered and RECs taken into account.

Australian Building The Australian Building Greenhouse Rating (ABGR) Scheme is one Greenhouse Rating acceptable methodology to use to normalise baselines for new or Scheme existing office buildings, after adjusting for any Green Power purchases. Generally a new office building must exceed a minimum 4 star rating before any NGACs may be created.

AEMO Australian Energy Market Operator

Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010 IPART 125

Glossary

Term Meaning

Baselines The required level of activity undertaken, or the degree of greenhouse intensity which must be bettered, by an accredited abatement certificate provider before it is permitted to create abatement certificates.

Benchmark Participant A person who is required or has elected to comply with a greenhouse gas benchmark.

Carbon Dioxide Equivalent Carbon dioxide equivalent of greenhouse gas emissions means the (CO2-e) mass of carbon dioxide measured in tonnes that has the same global warming potential as the unit mass of the gas emissions. Each abatement certificate represents one tonne of carbon dioxide equivalent abated.

Carbon Sequestration The process of removing carbon from the atmosphere and storing it within an eligible planted forest in NSW.

Carbon Sequestration Rule Greenhouse Gas Benchmark Rule (Carbon Sequestration) No. 5 of 2003

Compliance Rule Greenhouse Gas Benchmark Rule (Compliance) No. 1 of 2003

Compliance Year The period 1 January to 31 December of each year, for which Benchmark Participants must report compliance by 18 March in the following year.

Confidence Factor Under the DSA Rule and the Large User Rule, the type of engineering assessment of reduced energy consumption undertaken determines the level of accuracy for the calculation of abatement certificates and hence the confidence factor. The more accurate the calculation, the higher the confidence factor, and the more NGACs that can be created for a given level of estimated abatement.

Consumer Price Index (CPI) Under GGAS, the greenhouse penalty is adjusted each year by the consumer price index (CPI – All Groups Index), on and from 1 July in each year.

Deemed End User The total of the exempt sales of a mandatory Benchmark Participant to Purchases an elective Benchmark Participant multiplied by the DLF listed in Table 7 of the Compliance Rule.

Deemed Retailer An accredited abatement certificate provider that is an electricity retailer to which the electrical output of a Category A generating system is allocated pursuant to a Power Purchase Agreement to which the retailer is a party (see definition for Emissions Workbook).

Default Abatement Factor Used to calculate the number of abatement certificates that may be created from the installation of common equipment such as compact fluorescent lamps, AAA rated showerheads, refrigerators and certain electric motors.

Demand Side Abatement Activities that reduce emissions by reducing electricity consumption through increased efficiency of electricity consumption, eligible on- site electricity generation, and substitution of sources of energy for electricity or substitution of electricity for other sources of energy.

126 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

Glossary

Term Meaning

Distribution Loss Factor The distribution loss factor is the value of the electrical losses (DLF) calculated for various points in the electricity distribution network.

DSA Rule Greenhouse Gas Benchmark Rule (Demand Side Abatement) No. 3 of 2003

Efficiency Improvement A method used under the Generation Rule to measure greenhouse Approach gas emission reductions. Can be used by certain types of generators that make improvements in the efficiency of electricity production (and thereby reduce their emission intensity).

Elective Benchmark An eligible large customer or a person engaged in carrying out a State Participant significant project, who has chosen to manage its own greenhouse gas benchmark, and whose election is in force.

Electricity Sector Total allowable greenhouse gas emissions from the electricity sector Benchmark in NSW calculated by multiplying the Total State Population by the State Greenhouse Gas Benchmark per head of population for that compliance year. The Electricity Sector Benchmark is announced by the Tribunal prior to each compliance year (by 30 November each year).

Embedded Generator An embedded generator or an embedded generating system means a generating system that is connected to the distribution network as defined in the National Electricity Code.

Emissions Workbook The document entitled Greenhouse Gas Emissions from Electricity Supplied in NSW: Emissions Workbook published by the Ministry of Energy & Utilities in October 2000.

Exempt Sales The total electricity sold to an elective Benchmark Participant by another mandatory Benchmark Participant during the Compliance Year.

Fugitive Emissions Greenhouse gases that are discharged into the air as a result of the extraction, transport or production of fossil fuels. Fugitive emissions also include greenhouse gas emissions from landfill sites, sewage treatment works and some industrial processes.

Generation Rule Greenhouse Gas Benchmark Rule (Generation) No. 2 of 2003

Greenhouse Gas A generic term for gases such as carbon dioxide, methane, nitrous oxide, perfluorocarbon or sulphur hexafluoride, as defined in the Act and the Regulation.

Greenhouse Gas An environmental initiative administered by the Commonwealth Abatement Program Government’s Australian Greenhouse Office to reduce Australia's net (GGAP) greenhouse gas emissions by supporting activities that are likely to result in substantial emission reductions or substantial sink enhancement.

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Glossary

Term Meaning

Greenhouse Gas This is the individual target which must be met by Benchmark Benchmark Participants each compliance year and represents their individual share of the overall emissions target for NSW (the Electricity Sector Benchmark).

Greenhouse Gas These set out how Benchmark Participants will measure their Benchmark Rules compliance and how accredited abatement certificate providers are to calculate the number of certificates that they are entitled to create. The Rules are amended from time to time by the Minister for Energy. The most current version of the Rule should be used when calculating entitlements or for compliance.

Greenhouse Penalty The amount a Benchmark Participant is liable to pay (subject to CPI adjustments) per tonne of carbon dioxide equivalent in respect of excess emissions if they fail to comply with their greenhouse gas benchmark.

Greenhouse Shortfall The difference between a Benchmark Participant’s attributable emissions and its individual greenhouse gas benchmark; if the greenhouse shortfall does not exceed 10% of a Benchmark Participant’s greenhouse gas benchmark for that year, it may be carried forward to the following year (except in 2007) and a penalty will not apply.

Large Customer A customer under an electricity supply contract, other than a retail supplier, who uses 100 GWh or more of electricity at a single site or uses 100 GWh or more of electricity at more than one site, at least one of which uses 50 GWh or more of electricity in NSW.

Large User Rule Greenhouse Gas Abatement Rule (Large User Abatement Certificate) No. 4 of 2003

Loss Factor The value of electrical energy losses incurred in the conveyance of electricity over a distribution or transmission system.

LUAC A Large User Abatement Certificate; a non-tradeable certificate in the NSW Greenhouse Gas Reduction Scheme.

MRET The Mandatory Renewable Energy Target (MRET) Scheme. Introduced by the Commonwealth government through the Renewable Energy (Electricity) Act 2000, the MRET places a legal liability on wholesale purchasers of electricity to proportionately contribute towards the generation of an additional 9,500GWh of renewable energy per year by 2010.

Australian Energy Market The body corporate responsible for the administration and operation Operator (AEMO) of the wholesale national electricity market in accordance with the National Electricity Rules.

National Greenhouse Gas As part of commitments under the United Nations Framework Inventory (NGGI) Convention on Climate Change (UNFCCC), Australia, through the Australian Greenhouse Office, has produced an annual listing of national greenhouse gas emissions since 1990 known as the National Greenhouse Gas Inventory.

128 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010

Glossary

Term Meaning

NGAC A Greenhouse Abatement Certificate; a tradeable certificate in the Greenhouse Gas Reduction Scheme.

Office of the Renewable The Commonwealth Regulator of the Mandatory Renewable Energy Energy Regulator (ORER) Target Scheme.

Penalty Unit Each unit is currently $110; it is defined in Section 17 of the Crimes (Sentencing Procedure) Act 1999.

Pool Coefficient The average emissions per unit of electricity delivered at transmission nodes for all generating systems supplying the notional NSW pool, as determined in accordance with the Compliance Rule; this factor is announced by the Tribunal by 30 November each year.

Relative Intensity A method used under the Generation Rule to measure greenhouse gas Approach emission reductions. Can be used by generators that produce electricity of lower emission intensity than the pool coefficient.

Renewable Energy A Commonwealth certificate surrendered under the Mandatory Certificate (REC) Renewable Energy Target (MRET) Scheme that may be brought to account against a Benchmark Participant’s benchmark in the NSW Greenhouse Gas Reduction Scheme, based on NSW sales.

Renewable Power The percentage of electricity sold which NSW retailers must surrender Percentage (RPP) equivalent RECS to ORER each year, under the MRET scheme.

Retail Supplier A mandatory Benchmark Participant under the Greenhouse Gas Reduction Scheme. Includes all holders of an electricity retail licence in NSW.

Scheme Administrator The body administering functions such as accrediting abatement certificate providers, verifying abatement activity and maintaining a registry of certificates; this is IPART, in the first instance.

Scheme Registry An online registry of Abatement Certificate Providers and Abatement Certificates.

Sequestration Pool One or more Eligible Forests which are planted on Eligible Land on which Carbon Sequestration Rights are registered, and which are managed to provide carbon sequestration pursuant to those Carbon Sequestration Rights. The Eligible Forests, the Eligible Lands, and the Carbon Sequestration Rights over the Eligible Lands, may be owned or controlled by more than one entity.

Sequestration Pool A person who manages a Sequestration Pool, and exercises sufficient Manager control over it to be able to enforce the Carbon Sequestration Rights registered on the Eligible Land on which the Eligible Forests in that pool are planted.

Specific Abatement Project A specific project in which a change to an industrial process results in (SAP) an identifiable and measurable reduction in greenhouse gas emissions, as defined under the Large User Rule.

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Glossary

Term Meaning

State Significant A development that the Minister for Planning has determined is of Development State or regional significance.

Total Electricity Purchased This is the total amount of electricity purchased from AEMO, measured at transmission nodes, and embedded generators, measured at the point of generation, by all Benchmark Participants for use in NSW through the compliance year. For a detailed description of the calculations, see Clause 7 of the Compliance Rule.

Total State Electricity The projected electricity consumption in NSW, as determined in Demand accordance with the Compliance Rule; this factor is announced by IPART by 30 November each year.

Total State Population The projected total number of persons in NSW, as determined in accordance with the Compliance Rule, this factor is announced by IPART by 30 November each year.

130 IPART Compliance and Operation of the NSW Greenhouse Gas Reduction Scheme during 2010