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Acquisitions

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06 May 2022

Contents

Relevant acquisitions

A relevant acquisition is a purchase of electricity made from the grid or directly from the point of generation. A company becomes a liable entity once they make their first relevant acquisition. Liable entities are required to report their relevant acquisitions annually in an energy acquisition statement.

There are 2 types of relevant acquisitions: wholesale acquisitions and notional wholesale acquisitions.

There can be no ‘double counting’ of electricity. If a portion of electricity has been identified as a relevant acquisition, that electricity cannot be considered in other relevant acquisition calculations.

Section 31 of the Renewable Energy (Electricity) Act 2000 (the Act) outlines the definition of relevant acquisitions.

Reduced acquisitions

A liable entity’s reduced acquisitions are calculated by the relevant acquisitions they make in a calendar year, less any exemption certificates they receive from customers who engage in emissions-intensive trade-exposed (EITE) activities.

Liable entities can receive exemption certificates from electricity customers who are EITE participants. Liable entities can report exemption certificates in their energy acquisition statements to decrease their reduced acquisitions. The reduced acquisitions are then used to calculate a liable entity’s certificate liability.

Relevant acquisitions-Exemption certificates= Reduced acquisitions

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Section 38AA of the Renewable Energy (Electricity) Act 2000 (the Act) outlines the definition of reduced acquisitions.

Wholesale acquisitions

The majority of relevant acquisitions are wholesale acquisitions. A wholesale acquisition refers to electricity acquired from the grid or directly from the point of generation, then supplied to the end user.

Wholesale acquisitions cover a range of scenarios, not limited to:

  • Electricity acquired from AEMO and supplied to end users.
  • Electricity acquired from AEMO for own use on site.
  • Electricity acquired from a generator and supplied to end users.
  • Electricity acquired from customer-owned photovoltaic systems and supplied to other customers within the distribution network.

Section 32 of the Renewable Energy (Electricity) Act 2000 (the Act) outlines the definition of wholesale acquisitions.

Notional wholesale acquisitions

A notional wholesale acquisition refers to scenarios where the entity who generated electricity supplies it directly to the end user.

Notional wholesale acquisitions cover 2 types of scenarios:

    • A person generated electricity and sold it directly to an end user that is not registered under the National Electricity Rules. In this case, the person who generated the electricity would be the liable entity, and electricity they sell to the end user would be considered a relevant acquisition.
    • The person who generated electricity also used the electricity, and the following conditions were not met:
      1. (a) The distance between the point of electricity generation and end use is shorter than one kilometre, and
      2. (b) There is a dedicated transmission or distribution line between the point of generation and use which is used solely for the supply of electricity between those 2 points.

Section 33 of the Renewable Energy (Electricity) Act 2000 (the Act) outlines the definition of notional wholesale acquisitions.

Calculating acquisitions in MWh

Under the Renewable Energy (Electricity) Regulations 2001 (the Regulations), liable entities typically calculate the amount of electricity acquired for all relevant acquisitions at the:

  • AEMO or AEMO WA settlement point (typically the transmission network identifier or Muja reference node), or
  • customer or generator meter.

The amount of acquired electricity is calculated in varying ways, if the electricity is:

  • acquired from AEMO or AEMO WA, liable entities calculate the amount worked out based on metering data used for AEMO or AEMO WA settlement statements.
  • acquired directly from the person who generated the electricity at the interface between the transmission and distribution system. This is worked out by a method of calculation to be chosen by the agency after consultation with the liable entity using:
    • AEMO or AEMO WA equivalent settlement data
    • if the person who generated the electricity and the liable entity are not in the same distribution network as the customer who purchased data adjusted to the node, or node equivalent, by using the applicable distribution loss factor, or
  • generation data adjusted to the node, or node equivalent, by using the applicable marginal loss factor or equivalent,used outside the site of generation but in the same distribution network. This is worked out by a method of calculation to be chosen by the agency after consultation with the liable entity using, depending on the applicable contractual arrangements:
    • the amount generated, as metered at the power station's grid connection point, or
    • the acquisition as metered at the customer's grid connection point.
  • acquired at the site of the generation, liable entities calculate the amount of metered electricity at the point on which the contractual arrangement is based.

If these scenarios do not apply, liable entities are required to use a method of calculation to be chosen by the agency after consultation with the liable entity using the amount of metered or calculated electricity:

  • provided at the interface between the transmission and distribution system, or
  • at the point at which ownership of the electricity changes, in accordance with contractual arrangements.

Acquisitions that are not a relevant acquisition (exclusions)

There are a number of scenarios where electricity acquisitions are not considered relevant acquisitions and would be excluded from liability. A liable entity would not be required to report these in their energy acquisition statement.

If this type of electricity acquisition is the only acquisition a company is making, they would not be considered a liable entity.

If you believe you are making this type of acquisition and should not be liable, please contact the RET Liability team. You may need to provide evidence to support your case.

Section 31(2) of the Renewable Energy (Electricity) Act 2000 (the Act) outlines electricity acquisitions excluded from liability.

Grid capacity is less than 100 MW

A remote grid is not considered a liable grid if:

  • The grid has an installed capacity of less than 100 MW, or
  • It is not connected, directly or indirectly, to a grid that has a capacity of 100 MW or more.

Once the capacity of a grid is 100 MW or greater, the grid becomes a liable entity and the generated electricity is considered a relevant acquisition.

Self-generation

It is not considered a relevant acquisition when the same person generated and used that electricity, if either of the following conditions are met:

  • The distance between the point of electricity generation and end use is shorter than one kilometre, or
  • There is a dedicated transmission or distribution line between the point of generation and use that is used solely for the supply of electricity between those two points.
Later acquired by AEMO

The electricity that is sold to or later acquired by AEMO (or a body prescribed by the Renewable Energy (Electricity) Regulations 2001) is not considered a relevant acquisition.

For example, an electricity retailer acquires electricity from a customer-owned photovoltaic system and sells that portion of electricity to AEMO. This would not be considered a relevant acquisition because the portion of electricity has been acquired by AEMO.


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