Contents
The following information has been prepared to guide applicants to lodge an accurate and successful application. If applicants fail to abide by this guidance, it will delay the issuance of an exemption certificate as there is a higher likelihood that we will request additional information. To avoid failing to provide all required information in the ‘Apply for an exemption certificate’ form, enter all the applicable information highlighted on this page in the Basis of Preparation Report.
It is important that applicants provide accurate information in their applications. If applicants provide false and misleading information or documents, it will delay the issuance of an exemption certificate and may result in a maximum penalty of 12 months imprisonment under sections 137.1 and 137.2 of the
Criminal Code Act 1995.
Deriving your use amount formula
Your use amount formula calculates your certifiable amount, which calculates the amount of electricity that is a relevant acquisition for the emissions-intensive trade-exposed (EITE) activity or activities.
The use amount formula must include, in order of priority:
- meters
- other elements, and/or
- constants.
All of which are validated in the Client Portal ‘Apply for an exemption certificate’ form.
To derive a use amount formula that accurately represents relevant acquisitions of electricity used to conduct EITE activities at a site for a
certifiable amount period (typically a calendar year) you must understand how your EITE activity site is electrically configured and works. Deriving a use amount formula is specified under regulation 22ZHC of the
Renewable Energy (Electricity) Regulations 2001.
Understanding your EITE activity site also supports amendments to the use amount formula when site changes occur from year to year or during the year requiring you to
apply for an amendment.
Key points to consider when deriving your use amount formula include, but are not limited to identifying:
- how much electricity is consumed within the EITE activity boundary
- how much electricity is consumed to support functions outside of the EITE activity boundary
- the accuracy of the use amount formula
- meters associated with the site and their accuracy
- elements and associated calculations
- constants applied to variables in the use amount formula
- your certifiable amount period and proxy data.
Help with collating your use amount formula
Simple is best
Keep your use amount formula simple. Avoid using more meters or elements than necessary to reduce the amount of monthly data that needs to be entered at the end of the certifiable amount period.
Formulae can often be simplified using brackets and resolving calculations wherever possible instead of cluttering the formula with unsolved arithmetic. If there is a chance that constants could change during a certifiable amount period it is better to use variables (other elements (E)) instead of constants, allowing quantities or proportions to be varied when providing monthly data.
The Clean Energy Regulator (CER) may amend your use amount formula if it is found to be an inaccurate representation of your EITE activity. This is a review decision under regulation 49 of the Regulations. See
Internal review of decisions for guidance on seeking a review.
Accuracy
You need to aim to have a confidence interval of 95% or higher.
A correctly reported accuracy includes the associated confidence interval with a default confidence interval of 95%. This means that the certifiable amount must have an accuracy of 5% or 5,000 megawatt hours, whichever is lower for the certifiable amount.
Certifiable amount period and proxy data
A certifiable amount period represents:
- a whole calendar year which represents actual data, or
- a calendar year which represents actual data for at least 9 months of the year and proxy data for 3 months or less.
A whole calendar year representing actual data for the year automatically applies to your exemption certificate unless you apply for a calendar year that represents actual and proxy data.
If you apply for a calendar year that uses actual and proxy data:
- you will be contacted by an assessor to confirm or amend your proposed certifiable amount period
- you will need to lodge your calendar year data within 30 days of the last day that actual data applies to.
If you do not meet these basic conditions, it is unlikely we will approve requests in the future.
Proxy data is commonly used in place of actual data where errors occur with meters. If this applies to you, contact CER and complete an
Apply to amend your exemption certificate form.
Meters
You must consider whether meters are appropriate to identify the certifiable amount and provide an explanation as to why or why not. Part of this assessment is to examine:
- the suitability of meters (customer meter, national meter identifier, site incomer(s) or site-specific internal meters), the location of meters at the site, and how the meters can be used to calculate the certifiable amount. This is important for including relevant acquisitions of electricity and excluding non-relevant acquisitions of electricity.
- the meter’s accuracy.
Whether you use the meter in the use amount formula or not, you must list all meters in the Basis of Preparation Report and insert meters for your use amount formula in the application.
Meter accuracy
Meter accuracy is an important aspect of the data you use to calculate the certifiable amount.
Network billing meters (customer meter, national meter identifier, billing meters) are considered absolutely accurate. If the use amount formula only uses billing meters, then the accuracy is 0% and 0 megawatt hours.
Non-billing meters (check meters, site specific meters, internal meters) are also included in the electricity market rules. For these meters you need to check the meter's specifications. Most non-billing meters have an accuracy between 0.5% and 2%.
Consider using the following options to ensure your calculation is accurate:
- National Greenhouse Energy Reporting scheme legislation
- Renewable Energy Target large-scale generation which references Chapter 7 of the
National Electricity Rules
- equivalent rules for your network.
Other elements
You must consider whether ‘other elements’ are appropriate to identify the certifiable amount and provide an explanation as to why or why not.
You must always use meters where they are available to calculate your certifiable amount. However, if there are no meters available, you may use an ‘other element.’ You can include ‘other elements’ in the use amount formula where it is considered that meters alone are insufficient to calculate the certifiable amount.
If you determine that you need an ‘other element,’ you must explain what the ‘other element’ is calculating, why testing or factors have been used, and why it is appropriate.
You could use an ‘other element’ if you have a process that is not metered, and you have sufficient data and evidence to support your calculations and estimates used to account for non-metered consumption in the use amount formula.
Constants
You must consider whether constants are appropriate to identify the certifiable amount and provide an explanation as to why or why not.
You must use meters where they are available to calculate your certifiable amount. Alternatively, you may use ‘other elements,’ where needed, ahead of a constant in the use amount formula. You can include constants in the use amount formula where it is considered that meters and ‘other elements’ are insufficient to calculate the certifiable amount or that the use amount formula is not at risk of calculating in the exemption determination tool area of the Client Portal.
If you determine that you need a constant you must explain what the constant is calculating, and why it is appropriate.
What electricity can I claim?
You can claim electricity consumed to make the relevant product within your EITE activity boundary. However, the electricity must be a relevant acquisition of electricity as defined in the
Renewable Energy (Electricity) Act 2000 and
Renewable Energy (Electricity) Regulations 2001.
As an EITE entity, you can claim relevant acquisitions of electricity consumed at:
- the customer billing meter or national meter identifier (NMI)
- the onsite generator if the onsite generator is owned and operated by a third party. Note onsite generators do not need to be factored into your use amount formula if they are primarily used for emergency purposes. If onsite generators operate for emergency purposes for extended periods you can request an amendment to the current year. See
Amending an exemption certificate for more information.
See
Acquisitions to understand what is a relevant acquisitions of electricity.
What electricity can’t I claim?
You cannot claim electricity that is consumed outside the EITE activity boundary and electricity that is not a relevant acquisition of electricity as defined in the
Renewable Energy (Electricity) Act 2000 and
Renewable Energy (Electricity) Regulations 2001.
As an EITE entity, you cannot claim electricity consumed:
- outside the EITE activity boundary. This includes any transmission and distribution losses associated with the distribution of the electricity
- to support other non-eligible functions that occur at the site
- where the amount being consumed is supplied by an onsite generator if the onsite generator is owned and operated by you and the electricity is consumed within one kilometre of the generator or distributed on a dedicated line from the point of generation to the point of consumption.
See
Acquisitions to understand what is not a relevant acquisition of electricity.
Supporting documents for the application
To successfully apply, applicants must provide documents to support their eligibility for an exemption certificate. Some documents are required under the Renewable Energy (Electricity) Regulations 2001 (the Regulations) and others are essential to assessing your application quickly.
Providing a Basis of Preparation Report
You must provide a Basis of Preparation Report with your application. This document supports your use amount formula eligibility under subregulation 22O(1)(i) of the Regulations and must include statements or documents that cannot be provided as a separate attachment. This is not a set and forget document, you must ensure that it is current for the application year that you are applying for.
This document must explain why your derived use amount formula is fit for purpose, and in plain English provide information about the site such as:
- statements against legislative references
- relevant maps and schematics
- site meter locations and related information
- functions that form part of the EITE activity boundary
- functions that do not form part of the EITE activity boundary
- onsite generator locations and related information about electricity generated and consumed
- ‘other elements’ and how they were derived or will be derived for the use amount formula
- constants and how they were derived or will be derived for the use amount formula.
See the
documentasset:Basis of Preparation Report template for guidance.
Information that must be included
This table outlines other supporting information that must be contained within your Basis of Preparation Report or application.
| Legislative reference | New or existing | Topic | Requirement |
|---|
| Regulation 22O | New EITE activity at an existing site | Approvals | You must provide a statement about approvals needed to conduct a new EITE activity at the site and whether the prescribed person has obtained them at the time of making the application. |
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| Regulation 22O | New or existing sites | Site map | You must provide a site map that shows: - where EITE activity or activities are conducted
- the location of onsite generators and the nameplate rating in megawatts that gives rise to a relevant acquisition of electricity
- electricity consumed at the site that is not a relevant acquisition of electricity
- your connection to an electricity network that has a 100 megawatt capacity or more.
|
|---|
| To support regulation 22O | New and existing EITE activity sites | Electrical line schematics | You must provide electricity line schematics that are comprehensive and well annotated. The schematic or schematics must include all meters (billing and internal), onsite generators (if applicable), and other technical information to support your use amount formula. |
|---|
| Regulation 22Q | New applicant and EITE activity site | Statements | You must provide a statement about a EITE activity where it was not conducted at the site in the year before the application year. This includes providing: - information about whether any contracts or other arrangements have been entered into to buy the relevant product
- information about commissioning or recommissioning equipment to conduct the EITE activity, including a description of when and how the equipment will be constructed, commissioned or recommissioned
- a statement by the person constructing, commissioning or recommissioning the principal equipment that will conduct the EITE activity and whether the equipment:
- will be constructed, commissioned or recommissioned as described in the application
- is likely to be ready to produce the relevant product
- information in general terms about the arrangements that are in place to finance the installation of any equipment at the site, and
- a statement of any that would stop or delay the carrying out of the commencement of the EITE activity or the installation of any equipment at the site.
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Providing prescribed person documents
Documents to support your prescribed person category are required under the Regulations. See
Prescribed person categories to determine your prescribed person category.
This table provides the relevant legislation reference and specifies the document or documents needed to support the prescribed person category.
| Legislative reference | Supporting document or documents |
|---|
| Regulation 22G – person with electricity contract | A current electricity contract that clearly identifies the applicant's name, the electricity retailer, the start and end dates of the contract, and customer billing meter or meters with physical site address. If your electricity contract terminates throughout the calendar year, then provide evidence of a contract extension or advice indicating who the new retailer is likely to be. |
|---|
Regulation 22H – liable entity with operational control | A document or set of documents that prove you had 6 or more months of operational control of the site before the application is lodged and consumed more than 30% of the electricity at the site, or the electricity consumed is a relevant acquisition of electricity. Documents must clearly identify the applicant's name and the electricity retailer status. Documents may include ownership papers, electricity market registration papers, invoices, environmental approvals, or any document that that supports your prescribed person category including a Commonwealth statutory declaration. |
|---|
| Regulation 22I – liable entity will have operational control | A document or set of documents that prove you were the first prescribed person at the site to consume more than 30% of the electricity at the site. Documents must clearly identify the applicant's name and the electricity retailer status. Documents may include ownership papers, electricity market registration papers, invoices, environmental approvals, or any document that that supports your prescribed person category including a Commonwealth statutory declaration. |
|---|
| Regulation 22J – person with electricity contract for an EITE activity that will be conducted at the site | A current electricity contract that clearly identifies the applicant's name, the electricity retailer, the start and end dates of the contract, and customer billing meter or meters with physical site address. |
|---|
| Regulation 22K – first person nominates another person | A document or set of documents that prove: - the first person under regulation 22G, 22H, 22I or 22J of the Regulations nominated you to apply for the EITE activity, the site, and the year
- you are a controlling person in relation to the principal facility.
Documents must clearly identify the applicant's name, the electricity retailer, and customer billing meter or meters with physical site address. Documents may include ownership papers, electricity market registration papers, invoices, environmental approvals, or any document that supports your prescribed person category including a Commonwealth statutory declaration. For clarity a
controlling person is either: - a person with operational control of the facility
- the controlling corporation that has a member of its group with operational control of the facility
- a person that is not the operator of the facility who has
financial control over the facility.
For clarity a person (the
operator) has operational control over a facility, another person (the
second person) has financial control over the facility if: - under a contract the operator operates the facility on behalf of the second person
- under a contract the operator operates the facility on behalf of the second person and those other persons
- the second person can control the trading or financial relationships of the operator in relation to the facility
- the second person has the economic benefits from the facility
- the second person is a participant in a joint venture and there is only one other participant in the joint venture and the second person shares the economic benefits from the facility with the other participant and the second person’s share equals or exceeds the share of the other participant
- the second person is a participant in a joint venture and there are 2 or more other participants in the joint venture and the second person shares the economic benefits from the facility with the other participants and no other participant has a share of the economic benefits from the facility
- the second person is a partner in a partnership and there are 2 or more other partners in the partnership and the second person shares the economic benefits from the facility with the other partners and no other partner has a share that exceeds the share of the second person, or
- the second person can direct or sell the output of the facility.
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Providing an audit report
You need an audit report if your site’s certifiable amount is expected to be 15,000 megawatt hours (MWh) or more for the certifiable amount period and:
- it is your first application for the site, or
- it has been 5 years since you lodged an audit report for the site.
If you are unsure whether you will consume 15,000 MWh or more, we encourage you to obtain an audit report.
Who can complete an audit report?
An audit report must be completed by a Category 2
registered greenhouse and energy auditor who has no conflict of interest. The audit must be conducted in accordance with the relevant requirements for assurance engagements under the
National Greenhouse and Energy Reporting (Audit) Determination 2009. Ensure that you engage with your auditor early, so that the audit report is submitted with your application. CER recommends that you engage your auditor at least 4 months before submitting your application.
What does my auditor give assurance of?
An audit report provides assurance that you are eligible for an exemption certificate, your use amount formula, the Basis of Preparation Report and
Prescribed person category. See
What should the audit report approve? for more information.
CER also expects auditors to understand and focus on information relevant to the exemption certificate application. See
CER exemption certificate audit report expectations for more information.
Can CER request an audit report?
CER can request an audit report to be provided with your application for an exemption certificate if it is believed that the use amount formula for the site is likely to be materially different from what was reported in the current or previous year’s application.
CER can make this request under 22UG (3) – (4) of the
Renewable Energy (Electricity) Regulations 2001, and a decision to request an audit report is a reviewable decision under Part 8 of the Regulations.
See
Internal review of decisions for guidance on seeking a review of the assessment outcome.
CER also conducts audits under our
compliance monitoring and engagement strategy.