When calculating large-scale generation certificate (LGC) entitlement, Regulation 3B(2) of the
Renewable Energy (Electricity) Regulations 2001 (the Regulations) provides that the amount of electricity used by an accredited power station to pump or raise water before its release for hydro-electric generation is considered an auxiliary loss for the purpose of Regulation 14 (the general formula):
3B Definition of auxiliary loss
Electricity used to pump or raise water before its release for hydro-electric generation must be included as an auxiliary loss. However, where hydro-electric generation is incidental to the purpose of a facility, and the facility would continue to operate and release water regardless of any hydro generation, then the electricity used to pump or raise water does not need to be included as an auxiliary loss.
Applicants seeking to accredit power stations generating electricity from hydro—who consider that electricity used to pump or raise water does not meet the definition of an auxiliary loss under Regulation 3B(2)—must demonstrate that the pumping and releasing of water would occur regardless of hydro-electric generation.
Scenarios that may satisfy requirements include:
Where it is not satisfied that this guidance has been met, all electricity used in pumping or raising water is to be treated as an auxiliary loss.
Accredited power stations not reporting electricity used to pump or raise water prior to release as an auxiliary loss must be able to demonstrate that any water pumped or raised would occur regardless of hydro-electric generation. During the assessment of an LGC claim, the agency may request evidence of this from the nominated persons.
LGCs created from pumped water that does not serve the purpose of the facility or system, and not reported as an auxiliary loss, may be considered as an improper creation of LGCs under the
Renewable Energy (Electricity) Act 2001 (the Act). Any alleged, apparent or potential offences under the Act are actioned in accordance with our
Compliance Policy for Education, Monitoring and Enforcement Activities.
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