The Clean Energy Regulator ensures the efficient and proper management and use of public resources.
The 2014–15 financial year saw a significant change to the financial transactions of the agency following the repeal of the Clean Energy Act 2011 on 17 July 2014 and the introduction of the Emissions Reduction Fund. The impact of the repeal resulted in a significant reduction in Administered revenue and subsidies expense and is further detailed below. The new Emission Reduction Fund expenses resulting from the purchase of carbon abatement are reported in Other expenses.
The agency achieved an operating deficit of $2.0 million (before depreciation and amortisation) in 2014–15 compared to a $5.1 million surplus in 2013–14. The deficit can be attributed to the impairment of intangible assets ($3.5 million) used to administer the carbon price that are no longer required.
The agency successfully implemented the Emissions Reduction Fund in 2014–15 within its existing appropriation. This was achieved through the reallocation of resources within the agency, primarily through the closure of the carbon pricing mechanism, and the engagement of short-term contractors to assist with the implementation of the scheme.
In 2014–15 the Clean Energy Regulator received revenue from government totalling $76.6 million compared to $81.4 million in 2013–14. Reductions in base measure funding and Whole of Australian Government savings measures and efficiency dividends account for the reduction.
Sale of goods and services has decreased by $0.544 million (92 per cent) from $0.594 million in 2013–14 to $0.050 million in 2014–15. The majority of this reduction ($0.313 million) follows the completion of the solar inspection program in 2013–14 under the National Solar Schools Program. A further $0.150 million of this decrease relates to one-off funding from the Department of the Environment in 2013–14 to assist with the development of contract documentation for the Emissions Reduction Fund.
The agency's expenses have decreased by $2.586 million (3 per cent) from $94.530 million in 2013–14 to $91.944 million in 2014–15. The decrease is primarily due to a reduction in employee benefits and depreciation expense, partly offset by an increase in the write-down and impairment of assets.
The agency accessed short term resources to implement the new Emissions Reduction Fund. This resulted in lower employee expenditure during the year and conversely higher contractor costs.
The agency administered the Emissions Reduction Fund, Renewable Energy Target, and the closure of the carbon pricing mechanism on behalf of the Australian Government in 2014–15. The repeal of the carbon price had the most significant impact on the agency's administered finances with large reductions in both administered revenues and expenses.
Following the passage of legislation to enact the Emissions Reduction Fund in November the agency held the first auction in April 2015. The auction resulted in contracts with a total value of $660.471 million being awarded, representing 47.333 million tonnes of abatement at an average price of $13.95 per tonne.
Administered income decreased by $4,661.579 million (99 per cent) from $4,728.908 million in 2013–14 to $67.328 million in 2014–15 as a result of:
During the year a number of contracts were awarded following the first Emissions Reduction Fund auction. These contracts range in duration from 1 year to 10 years.
Administered expenses have decreased by $1,171.523 million (87 per cent) from $1,343.838 million in 2013–14 to $172.315 million in 2014–15 largely driven by:
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.