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Electricity use method

19 January 2018


Under the Renewable Energy Target, companies who conduct eligible emissions-intensive trade-exposed (EITE) activities can apply for exemption certificates.

Applicants can decide if they would like to use the original production calculation method or the electricity use method to apply for an exemption in 2018. Information below is on the electricity use method.

All applicants must use the electricity use method from 2020. Applicants that use more than 2000 Gigawatt hours (GWh) in 2018 need to use the electricity use method in 2019 to determine their exemption.

How to apply

The 2018 exemption certificate application form and guidelines for the electricity use method is now available. The legislated closing date for applications is 3 April 2018. No extensions can be granted.

In addition to the standard application form, the Clean Energy Regulator may, depending on your circumstances, also require other forms to be completed as part of the application process.

Completed applications and accompanying documentation can be emailed or posted as detailed in the form.

The Department of the Environment and Energy has also published an instrument called the Emissions-Intensive Trade-Exposed Activity Boundaries. Please refer to this as it describes the boundaries of EITE activities for determining an amount of exempt electricity.

Submitting a validly made application for exemption

We will only assess validly made applications for exemption certificates. Validly made applications must be accurately completed and contain all information required in the application forms in accordance with relevant provisions in the Renewable Energy (Electricity) Act 2000 (the Act) and the Renewable Energy (Electricity) Regulations 2001 (the Regulations). This includes any documentation that supports the application.

To ensure that an application for an exemption certificate is a validly made application, applicants should familiarise themselves with relevant parts of the Act and the Regulations before applying for an exemption certificate.

If an application is not validly made, we will advise the applicant in writing and provide reasons why it is not a validly made application.

  • The applicant may re-submit an application for assessment before the legislated deadline.
  • Where applications are not validly made and the deadline has passed, no further assessment will be undertaken.

It is recommended that you submit your application early in 2018 to allow sufficient time to assess whether your application is validly made.

After the due date the Clean Energy Regulator will not issue Requests for Further Information for applications not validly made.

Issuing exemption certificates

An exemption certificate is issued to a company who made an application (referred to as the prescribed person), for exemption of liable electricity used in the eligible EITE activity or activities conducted at a site in the year listed on the certificate.

If there are multiple liable entities listed in the application, the prescribed person will receive separate exemption certificates for each liable entity.

Each exemption certificate describes how the exemption amount, in megawatt hours (MWh), will be determined by the Clean Energy Regulator. We will provide the exemption amount after the exemption year.

Once applicants receive their exemption certificate they should discuss the provision of exemption certificate information with their liable entity. We will only provide this information to a liable entity listed in an application if we are authorised by the applicant. This authorisation can be provided in the application form or later in the year.

For further information on how the exemption reduces acquisitions for a liable entity is available, see Reduced acquisitions.

Audit requirements

An audit report is required under the following circumstances.

Applicant uses electricity use method for the first time

  • The applicant has not previously made an application in relation to the site using the electricity use method.
  • The amount of exemption (in MWh) applied for exceeds 15 000 MWh for the application year.

Every three years

  • The year is at least two years after the last year the applicant submitted an application accompanied by an audit report.
  • The amount of exemption (in MWh) applied for exceeds 15 000 MWh for the application year.

On request by the Clean Energy Regulator

  • The Clean Energy Regulator gives the applicant notice in writing for an audit report.
  • The method to work out the exemption is materially different from the previous year.

The audit report must comply with the requirements of regulation 22UH of the Regulations.

An audit must be completed by a ‘registered greenhouse and energy auditor’ within the meaning of the National Greenhouse and Energy Reporting Act 2007, who is registered as a Category 2 auditor under the National Greenhouse and Energy Reporting Regulations 2008. The auditor must have no conflict of interest with the applicant. The audit report guideline for exemption certificate applications is available to assist you and your auditor to prepare an audit report.

Audits cannot be done by an authorised audit company under section 1299C of the Corporations Act 2001 or by a person who is a registered auditor under section 1280 of the Corporations Act 2001.

To learn more about the requirement for applications to include an audit re​port, see paragraph 46A(2)(bb) of the Renewable Energy (Electricity) Act 2000 and Subdivision BA of Division 4 of Part 3A of the Renewable Energy (Electricity) Regulations 2001.

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