Page 712 - Week 02 - Thursday, 12 February 2009
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of the premium price. Concern has been expressed about the potential for already profitable, larger scale generators to make extraordinary profits from the ACT scheme. Preliminary analysis indicates that a single installation of the size of the minimum sized solar farm currently being considered by the government—that is, 22 megawatts, to power about eight per cent of ACT houses—could cost the average electricity user about $148 per annum extra.
The full implications of these risks, therefore, are still to be assessed. Accordingly, for the purposes of the first stage of scheme implementation, I propose an installation cap of 30 kilowatts. As I have already mentioned, the second stage will examine more fully how larger facilities should be treated under the scheme.
Similarly, the act currently does not exclude payment of the premium price to ACT and commonwealth government agencies. These agencies, already the recipients of public moneys, would in effect benefit again through the premium price, funded by imposts on the wider community. This amounts to a hidden tax on the community. Further, it is inappropriate that commonwealth agencies in particular should enjoy this benefit at the cost of average ACT householders.
The government believes that for the purposes of transparency and fairness this double dipping should not be allowed. As mentioned earlier, this exclusion does not apply to schools and other educational institutions which the government believes are a special case. The amendments strictly define which organisations retain eligibility to access the premium price.
Fourthly and finally, the bill introduces amendments to correct a number of technical errors relating to definitions and units of measurement. The act contains a number of minor technical errors whose correction would add to the clarity of the scheme. For instance, kilowatt hours. a measure of output, is used to mark the thresholds between the existing 100 per cent, 80 per cent and 75 per cent payment levels. As read, all ACT generators would be in the upper tier after only two days generation and thus receive the lowest per unit payment. This was clearly not the policy intention. The thresholds should have been expressed as kilowatts, a measure of installed capacity. This particular ambiguity has been raised by industry, academic and consumer groups as requiring clarification.
Similarly, some of the act’s definitions were inconsistent with general industry understanding and the operation of the act in the context of a wider national electricity market. Amendments are proposed to avoid confusion to industry participants.
The effect of these amendments is outlined in the accompanying explanatory statement to the bill. My department is also available to brief members on the bill and its implications.
I am confident that the amendments I propose will make the ACT electricity feed-in scheme a more equitable and durable mechanism for promoting the growth of local renewable generation. The amendments establish the basis of the government’s nation-leading feed-in tariff and will be further built upon as the government develops the parameters for stage 2 that will address larger scale generation. I intend to announce details of the proposed second stage in June this year. I commend the
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