Client Update: Climate Change – 29 April 2008

Changes to energy reporting requirements

In brief: Partner Darren Murphy (view CV) and Senior Associate Caitlin Westgarth report on the Federal Government's announcement to amend the Energy Efficiency Opportunities Regulations 2006 with effect from 1 July 2008 to avoid duplication with the reporting requirements under the National Greenhouse and Energy Reporting System. 

• Brief overview of the Energy Efficiency Opportunities Program
• Brief overview of the National Greenhouse and Energy Reporting System
• Amendments to the Energy Efficiency Opportunities Regulations to streamline reporting

Brief overview of the Energy Efficiency Opportunities Program

The Energy Efficiency Opportunities Program (the EEO Program) is a Federal Government initiative that requires large energy using businesses to assess opportunities to improve energy efficiency and to report publicly on outcomes.

The Energy Efficiency Opportunities Act 2006 (Cth) provides the legislative framework for the program. Under this Act, if the total energy used by the members of a corporate group is more than 0.5 petajoules¹ in a financial year (which is known as the trigger year), it is mandatory for the controlling corporation at the top of the group hierarchy to apply to register on the Register of Corporations for the EEO Program. The controlling corporation's group includes certain of its subsidiaries, joint ventures and partners. An application for registration must be made between 1 July and 31 March in the first financial year after the trigger year.

A registered corporation must submit to the Department of Resources, Energy and Tourism (DRET) an assessment plan within 18 months from 1 July of the financial year in which it is required to apply for registration, and then every five years. The assessment plan is to set out proposals for assessing opportunities to improve the energy efficiency of the controlling corporation's group. The assessment plan is to include information on the corporate structure of the controlling corporation and its members, the current energy use and data on energy and financial savings arising from energy efficiency opportunities, an assessment schedule and how the group proposes to meet its public reporting obligations.

A registered corporation must also prepare and make publicly available reports that include information on how the proposals in the approved assessment plan were carried out, the results of carrying out those proposals, the response of the corporation to those results, the total energy use covered by all assessments and energy savings.

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Brief overview of the National Greenhouse and Energy Reporting System

Under the National Greenhouse and Energy Reporting System (NGER System), registered corporations are to report annually to the Greenhouse and Energy Data Officer on the level of greenhouse gases emitted, energy produced and energy consumed or the reduction, removal or offset of greenhouse gas emissions achieved by its greenhouse gas projects (as the case may be). Further detail on the reporting requirements will be set out in the regulations to the National Greenhouse and Energy Reporting Act 2007 (Cth), which are anticipated to be finalised this year. (For further discussion on the NGER System see Focus: Climate Change – October 2007 and Focus: Climate Change – February 2008).

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Amendments to the Energy Efficiency Opportunities Regulations to streamline reporting

Whilst the two schemes have different coverage and objectives, there exists an overlap in the area of data reporting.

Having acknowledged the overlap, the Government proposes to amend the EEO Regulations by 1 July 2008 to align the reporting requirements under the EEO Program with those of the NGER System so that businesses will only need to collect one set of energy data and report that data once. The DRET has released a consultation paper on the proposed amendments, which can be found at www.energyefficiencyopportunities.gov.au. In brief, the proposed amendments are to:

• align how an energy user is defined so that it is consistent with how energy use is attributed under the NGER System;
• align energy sources and energy conversion factors with those used for the purposes of the NGER System;
• require corporations to report gross energy production and consumption to align with the NGER System; and
• provide that data that complies with the technical requirements for energy use measurement under the NGER System will also comply with the EEO Program's energy use reporting accuracy requirements.

It is proposed that transitional provisions will be introduced to minimise impact on businesses currently reporting under the EEO Program.

The DRET has arranged a public consultation session on the proposed amendments in Canberra on 7 May 2008 and has asked for feedback from interested stakeholders on the proposed amendments by 9 May 2008.

The DRET is also hosting Energy Efficiency Opportunity workshops between May and June 2008, which will include presentations and interactive group sessions on topics such as Approaching the National Greenhouse and Energy Reporting Legislation and Energy Efficiency Opportunities Program in an Integrated Way.

The Online System for Comprehensive Activity Reporting (OSCAR) (which is an online data collection tool for energy, waste and greenhouse data and currently forms part of the NGER System) will be updated to include a reporting module for the EEO Program.

Footnotes

1. The DRET's Energy Efficiency Opportunities Guidelines provide that 0.5 petajoules is about equal to 139,000 megawatt hours of electricity, 9000 tonnes of LNG or 10,000 tonnes of LPG, 13 megalitres of diesel, or approximately AU$5-10 million on electricity, AU$1.5-2.5 million on gas or AU$11-13 million on diesel (depending on prices).

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For further information, please contact:

Darren Murphy Partner, Perth Ph: +61 8 9488 3768 Darren.Murphy@aar.com.au		Grant Anderson Partner, Melbourne Ph: +61 3 9613 8928 Grant.Anderson@aar.com.au
Chris Schulz Partner, Melbourne Ph: +61 3 9613 8772 Chris.Schulz@aar.com.au		John Greig Partner, Brisbane Ph: +61 7 3334 3358 John.Greig@aar.com.au
Ben Zillmann Partner, Brisbane Ph: +61 7 3334 3538 Ben.Zillmann@aar.com.au		Matthew Skinner Partner, Sydney Ph: +61 2 9230 4038 Matthew.Skinner@aar.com.au
Andrew Mansour Partner, Sydney Ph: +61 2 9230 4552 Andrew.Mansour@aar.com.au		Campbell Davidson International Partner, Shanghai Ph: +86 21 6841 2828 Campbell.Davidson@aar.com.au

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