Energy Efficiency Opportunities Amendment Regulation 2013 (No. 1)
Select Legislative Instrument No. 176, 2013
I, Quentin Bryce AC CVO, Governor‑General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulation under the Energy Efficiency Opportunities Act 2006.
Dated 11 July 2013
Quentin Bryce
Governor‑General
By Her Excellency’s Command
Gary Gray AO
Minister for Resources and Energy
Contents
1............ Name of regulation.............................................................................. 1
2............ Commencement................................................................................... 1
3............ Authority............................................................................................. 1
4............ Schedule(s)......................................................................................... 1
Schedule 1—Amendments 2
Energy Efficiency Opportunities Regulations 2006 2
1 Name of regulation
This regulation is the Energy Efficiency Opportunities Amendment Regulation 2013 (No. 1).
2 Commencement
This regulation commences on the day after it is registered.
3 Authority
This regulation is made under the Energy Efficiency Opportunities Act 2006.
4 Schedule(s)
Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1—Amendments
Energy Efficiency Opportunities Regulations 2006
1 Subregulation 1.3(1)
Insert:
design stage, in relation to a project, means a stage (however described) in the process undertaken by an entity to design the project and develop it to the commencement of commercial operation.
Note: A stage would occur at some time from the initial concept to when commercial operation has commenced.
Examples: The following are possible descriptions of stages:
(a) concept;
(b) pre‑feasibility;
(c) feasibility;
(d) front end engineering design;
(e) procurement;
(f) detailed design and construction;
(g) commissioning;
(h) post‑construction optimisation.
2 Subregulation 1.3(1)
Insert:
future energy means energy that a new development or an expansion will use after commercial operation has commenced.
3 Subregulation 1.3(3)
Repeal the subregulation, substitute:
(3) A project is an expansion if:
(a) it relates to an existing facility; and
(b) it is expected that additional energy use will be required by the facility when the project has commenced commercial operation; and
(c) the project is not part of standard business operations and is not covered by an approved assessment plan; and
(d) the project has been publicly announced by the controlling corporation;
but a project by a controlling corporation is not an expansion if the Secretary is satisfied that the corporation’s existing systems and processes meet the requirements of the Key Elements set out in Schedule 6.
4 Subregulation 1.3(5)
Repeal the subregulation, substitute:
(5) A project is a new development if:
(a) it is a project to construct a new facility or facilities; and
(b) the project is not part of standard business operations and is not covered by an approved assessment plan; and
(c) the project has been publicly announced by the controlling corporation;
but a project by a controlling corporation is not a new development if the Secretary is satisfied that the corporation’s existing systems and processes meet the requirements of the Key Elements set out in Schedule 6.
5 Subregulation 1.4(1)
Omit “1.4C”, substitute “1.4D”.
6 After regulation 1.4C
Insert:
1.4D User of energy—future energy (new developments and expansions)
(1) Despite regulation 1.4, if a project is a new development, or an expansion, at which energy is to be consumed, each entity that owns the new development or the expansion is a user of the future energy.
(2) An entity (the second entity) that:
(a) has the greatest influence over design decisions which affect future energy; and
(b) is not the user of the future energy;
may ask the Secretary, in writing, to treat the second entity as the user of future energy to which the request relates at the facility to which the request relates.
(3) The request must be accompanied by a statement, in writing, that the entity that is currently the user of future energy agrees to the request.
(4) If:
(a) the request is made by an entity that complies with paragraphs (2)(a) and (b); and
(b) the request complies with subregulation (3); and
(c) the Secretary is satisfied that the second entity would be required to be registered under Part 4 of the Act if it became the user of the future energy;
the Secretary must accept the request as soon as practicable.
(5) If the Secretary accepts a request, the second entity becomes the user of the future energy to which the request relates when the request is accepted.
(6) If the entity that would be the user of the future energy in accordance with subregulation (1) notifies the Secretary, in writing, that it no longer wants the second entity to be the user of the future energy:
(a) the second entity ceases to be the user of the future energy when the Secretary receives the notice; and
(b) the entity that notified the Secretary becomes the user of the future energy.
(7) If the second entity notifies the Secretary, in writing, that it no longer wants to be the user of the future energy:
(a) the second entity ceases to be the user of the future energy when the Secretary receives the notice; and
(b) the entity that would be the user of the future energy in accordance with subregulation (1) becomes the user of the future energy.
7 Paragraph 1.5(2)(b)
Omit “future use of energy”, substitute “future energy use”.
8 After regulation 1.5
Insert:
1.5A Energy use threshold—energy used for supporting services or supporting infrastructure for new developments and expansions
(1) This regulation applies if:
(a) a project is a new development or an expansion at which energy is to be consumed; and
(b) the design of the project involves the provision of a service, site, or supporting infrastructure that is not under the control of the registered corporation.
(2) The registered corporation is not required to:
(a) treat the energy to be used in relation to the service, site, or supporting infrastructure as energy used; and
(b) include that energy as part of its baseline energy.
9 Regulation 5.2
Repeal the regulation, substitute:
5.2 Requirements for an assessment plan—content of plan
(1) For paragraph 18(8)(b) of the Act, the information mentioned in this regulation must be set out in an assessment plan.
Assessment plan for a new development or an expansion
(2) If the assessment plan relates to a new development or an expansion, the information:
(a) is the information set out in Schedule 2A; and
(b) must relate to:
(i) the controlling corporation’s group as a whole; or
(ii) if the controlling corporation has authorised members of the group to submit parts of the plan—all of the group, when the parts are combined.
Assessment plan other than for a new development or an expansion
(3) If the assessment plan does not relate to a new development or an expansion, the information:
(a) is the information set out in Schedule 3; and
(b) must relate to:
(i) the controlling corporation’s group as a whole; or
(ii) if the controlling corporation has authorised members of the group to submit parts of the plan—all of the group, when the parts are combined.
Combined assessment plan
(4) If subregulations (2) and (3) would both apply to an assessment plan:
(a) subregulation (2) applies to the extent that the assessment plan relates to the new development or the expansion; and
(b) subregulation (3) applies to the extent that the assessment plan relates to the development or expansion that is not a new development or an expansion.
10 After subregulation 5.3(4)
Insert:
(4A) In addition to subregulation (4), if:
(a) a member of the controlling corporation’s group acquires a site within 18 months before the end of the relevant assessment cycle; and
(b) the site uses more than 0.5 PJ during a financial year after the acquisition;
the controlling corporation’s group must assess the site and subregulation (5) or (7) applies.
11 Subregulation 5.3(9)
Repeal the subregulation.
12 After subregulation 5.6(3)
Insert:
(3A) The different percentage in a proposed variation may be calculated by excluding the percentage of baseline energy for an existing facility if:
(a) the controlling corporation was required to be registered under section 13 of the Act only because of the existence of a new development or an expansion; and
(b) the controlling corporation’s group does not meet the energy use threshold for the year if the new development or expansion is not taken into account.
13 At the end of Part 5
Add:
5.8 Variation to approved assessment plan—new developments and expansions
(1) This regulation applies if:
(a) a registered corporation wishes to give the Secretary a proposed variation to an approved assessment plan under subsection 19(1) of the Act; and
(b) the variation is for the purpose of including in the approved assessment plan an assessment of the opportunities for improving the energy efficiency in a new development or an expansion.
(2) If the new development or the expansion was publicly announced before 31 December 2013, the registered corporation must give the Secretary the variation no later than 30 June 2014.
(3) If the new development or the expansion was not publicly announced before 31 December 2013, the registered corporation must give the Secretary the variation within 6 months after the first public announcement of the new development or the expansion.
14 Before regulation 6.1
Insert:
6.1A Requirement to carry out energy efficiency opportunities assessments—new development or an expansion
(1) For paragraphs 20(3)(a), (b), (c) and (d) of the Act, the requirements for the carrying out of a proposal for assessing the opportunities for improving energy efficiency that relates to a new development or an expansion are set out in the Assessment Framework in Schedule 6.
(2) A controlling corporation must complete energy efficiency opportunities assessments, or arrange for the completion of energy efficiency opportunities assessments, in accordance with subregulation (1).
(3) However, if:
(a) a controlling corporation’s proposal for assessing the opportunities for improving energy efficiency relates to an expansion; and
(b) the expansion is likely to affect energy use in relation to an existing facility of the controlling corporation;
the controlling corporation may elect that the requirements for the carrying out of the proposal in relation to the existing facility are the requirements set out in the Assessment Framework in Schedule 6 and, if the controlling corporation makes that election, give the Secretary an assessment plan that reflects the election as soon as practicable.
(4) A controlling corporation that makes an election under subregulation (3) must complete energy efficiency opportunities assessments, or arrange for the completion of energy efficiency opportunities assessments, in relation to the existing facility in accordance with subregulation (1).
15 Regulation 6.1, heading
Repeal the heading, substitute:
6.1 Requirement to carry out energy efficiency opportunities assessments (no new development or expansion)
16 Subregulation 6.1(1)
After “energy efficiency”, insert “that does not relate to a new development or an expansion”.
17 After subregulation 7.1(1)
Insert:
Period for new developments and expansions
(1A) If the report relates to a new development or an expansion:
(a) subregulations (2) to (6) do not apply; and
(b) the reporting period commences at the commencement of the first design stage of the new development or the expansion; and
(c) the reporting period ends when commercial operation commences.
18 Subregulation 7.2(1)
After “section 22 of the Act”, insert “that does not relate to a new development or an expansion”.
19 At the end of subregulation 7.2
Add:
(3) If the report relates to a new development or an expansion, other information required to be contained in the report is set out in Schedule 4A.
20 Regulation 7.4
Repeal the regulation, substitute:
7.4 Time of making report available
(1) For paragraph 22(5)(a) of the Act, a report under section 22 of the Act that relates to a new development or an expansion must be made available to the public by a registered corporation, or a member or a group, no later than 12 months after the end of the financial year in which commercial operation commences.
Note: No subsequent reports are required for a new development or an expansion.
(2) For paragraph 22(5)(a) of the Act:
(a) a first report under section 22 of the Act that does not relate to a new development or an expansion must be made available to the public by a registered corporation, or a member or a group, no later than 30 months after the commencement of the first assessment cycle; and
(b) each report subsequent to that first report must be made available to the public by a registered corporation, or a member or a group, no later than 12 months after the previous report was made available to the public.
21 After subregulation 7.6(1)
Insert:
Reporting period for new developments and expansions
(1A) If the report relates to a new development or an expansion:
(a) subregulations (2) to (4) do not apply; and
(b) the reporting period commences at the commencement of the first financial year in which the controlling corporation is required to assess the future energy use of the new development or the expansion for the purposes of the Act; and
(c) the reporting period ends when commercial operation commences.
22 After regulation 7.6
Insert:
7.6A Information in report (new development or expansion)
For paragraph 23(3)(b) of the Act, the other information required to be contained in a report under section 23 of the Act that relates to a new development or an expansion is:
(a) a prediction of the future energy use for each design stage of the new development or the expansion, measured by an indicator; and
(b) if the prediction in paragraph (a) does not adequately show the result of the assessment of the future energy use of the new development or the expansion:
(i) a summary of the energy savings found in the design of the new development or the expansion; or
(ii) a statement of the result, measured by another reporting method has been specified in the approved assessment plan and approved by the Secretary for that purpose;
(c) the information mentioned in paragraph (a) and, if required, paragraph (b), identified by the main types of energy used;
(d) for the information mentioned in paragraph (a):
(i) a statement whether the predicted energy use or the indicator changed at any time during 2 or more design stages, but not including any information that is commercially sensitive; and
(ii) a description of the change and an explanation of why the change occurred, but not including any information that is commercially sensitive;
(e) a general explanation of each design feature or choice of technology that contributed to the majority of the energy savings, but not including any information that is commercially sensitive.
23 Regulation 7.7 (heading)
Repeal the heading, substitute:
7.7 Information in report (no new development or expansion)
24 Subregulation 7.7(1)
After “section 23 of the Act”, insert “that does not relate to a new development or an expansion”.
25 After subregulation 7.9(1)
Insert:
(1A) If the report relates to a new development or an expansion, the time is 12 months after the end of the financial year in which commercial operation commences.
Note: No subsequent reports are required for a new development or an expansion.
26 Subregulation 7.9(2)
Omit “For”, substitute “If subregulation (1A) does not apply, for”.
27 Subregulation 7.9(2) (note)
Omit “7.4(1)”, substitute “7.4(2)”.
28 Part 2 of Schedule 1 (note below heading)
Repeal the note, substitute:
Note: Subregulation 1.5(2) explains the energy used by an entity. The total of all energy used by the entity does not include any use of energy or energy sources specified in subregulation 1.5(4) or this Part.
Subregulation 1.5(2) and this Part are intended to prevent “double counting”. If an entity uses an energy source to create energy that the entity then uses, it is only the latter use of energy that counts.
This Part identifies energy and energy sources that are not to be counted.
29 After Schedule 2
Insert:
Schedule 2A—Content of assessment plan (new development or expansion)
Note: See paragraph 5.2(2)(a).
Part 1—Corporate operations
101 All new developments or expansions that have been publicly announced by the controlling corporation.
Part 2—Estimated future energy use
201 For each design stage, and for each new development and expansion mentioned in item 101, the estimated future energy use.
202 For each design stage, and for each new development and expansion mentioned in item 101, the indicator used for energy use.
203 The information mentioned in item 201, identified by the main types of energy used.
204 If the predicted energy use or the indicator changed at any time during 2 or more design stages:
(a) a statement to that effect; and
(b) a description of the change and an explanation of why the change occurred, but not including any information that is commercially sensitive.
205 A general explanation of each design feature or choice of technology that contributed to the majority of the energy savings during the period before an assessment plan was required to be given to the Secretary, but not including any information that is commercially sensitive.
206 Any alternative reporting method or methods that is allowed under regulation 7.6A and Schedule 4A and that has been used.
Note: A registered corporation may not be able to give some of this information to the Secretary when it gives the Secretary the assessment plan for its first new development or expansion, as it may not have previously estimated the energy use indicators.
Part 3—Assessments
301 A general explanation of how the controlling corporation intends to undertake assessments, including how it will incorporate the key elements in Schedule 6 into each design stage in order to meet the requirements set out in Schedule 6.
Part 4—Reporting
401 A statement indicating when a new development or an expansion will be considered to have reached commercial operation, which will initiate the provision of a report to the Secretary and a public report.
402 (1) Either:
(a) the leading indicators to be used as part of the new development or the expansion; or
(b) an explanation of how leading indicators will be chosen for the new development or the expansion.
(2) A leading indicator is an indicator of:
(a) a system; or
(b) people; or
(c) a process;
that measures the potential success of a project in relation to energy productivity. The indicator can be used to measure success throughout the design.
403 If a lagging indicator has been used, details of the lagging indicator.
Example: Each of the following is a lagging indicator:
(a) New Present Value (NPV);
(b) Future Worth (FW);
(c) Internal Rate of Return (IRR).
404 Any alternative reporting method or methods that is allowed under regulation 7.6A or Schedule 4A and that has been used.
30 Schedule 3 (heading)
Repeal the heading, substitute:
Schedule 3—Content of assessment plan (no new development or expansion)
Note: See paragraph 5.2(3)(a).
31 Schedule 4 (heading)
Repeal the heading, substitute:
Schedule 4—Information in reports to the public about energy efficiency opportunities assessments (no new development or expansion)
Note: See subregulation 7.2(1).
32 After Schedule 4
Insert:
Schedule 4A—Information in reports to the public about energy efficiency opportunities assessments (new development or expansion)
Note: See subregulation 7.2(3).
1 A description of how the assessment was undertaken.
2 (1) A description, in the form of a graph, of how anticipated and actual energy use has trended, as identified by the indicator measuring energy use, from the first design stage to when commercial operation commences.
(2) However, if the registered corporation does not wish to identify the indicator measuring energy use, because the data identified by the indicator is commercially sensitive, the information is a description, in the form of a graph, of percentage change in the indicator.
(3) If the energy use or the indicator changed at any time during 2 or more design stages:
(a) a statement to that effect; and
(b) a description of the change and an explanation of why the change occurred, but not including any information that is commercially sensitive.
3 (1) A description of:
(a) the leading indicators used; and
(b) the results achieved, using the indicator, for the new development or the expansion.
(2) A leading indicator is an indicator of:
(a) a system; or
(b) people; or
(c) a process;
that measures the potential success of a project in relation to energy productivity. The indicator can be used to measure success throughout the design.
4 If either or both of clauses 2 and 3 do not adequately demonstrate the results of the assessment, the clause or clauses may be replaced by any alternative reporting method included in the approved assessment plan.
5 One or more significant design features that have resulted in a material improvement in the energy efficiency of the new development or the expansion, but not including any information that is commercially sensitive.
33 After Schedule 5
Insert:
Schedule 6—Assessment Framework (new development or expansion)
Note: See subregulation 6.1A(1).
Part 1—Preliminary
101 Definitions
101 In this Schedule:
aspirational target means a target for energy efficiency which:
(a) is technically achievable; and
(b) encourages the achievement of substantial energy efficiency opportunities in the design of a new development or an expansion.
Note: Achieving an aspirational target is not mandatory. An aspirational target is a target for the design team to aim for and consider throughout the design.
energy productivity improvement means a design choice in relation to a new development or an expansion which:
(a) relates to energy sources and how energy is used; and
(b) is intended to produce a financial return.
whole‑of‑business evaluation means the financial evaluation of an energy productivity improvement to consider all relevant quantifiable business costs and benefits relating to the improvement.
Examples: Quantifiable business costs and benefits include the following:
(a) direct energy‑related costs and savings;
(b) a capital cost or an avoided capital investment;
(c) the cost of maintenance, waste disposal, water usage or occupational health and safety;
(d) a cost associated with a project delay;
(e) a cost associated with a change in productivity, or the quality or quantity of an output;
(f) the cost of an effect on another system in the new development or the expansion.
Part 2—Key elements
Note: The intention of the key elements must be applied to the new development or the expansion, from the initial concept to post‑construction optimisation. Some existing systems and processes may already meet the intent of the key elements and should be used where appropriate. Some Key Elements will be more applicable to early design stages and others will be more applicable to later design stages. The Key Elements may not be applicable to some design stages such as construction and commissioning.
A registered corporation should consider how to best align the intent of these key elements, to existing design processes and stage gates, to best identify design decisions which will result in increased energy productivity.
201 Key element 1—Leadership
Visible leadership and commitment from senior management provides clear direction and purpose to the assessment throughout the design stage through to commercial operation, which may include:
(a) setting and communicating both feasible and aspirational target energy performance objectives for the new development or the expansion once operational; and
(b) communicating and ensuring that assessment objectives are contributing towards business priorities; and
(c) setting Key Performance Indicators within the design process and giving recognition for achievement of energy performance objectives and internal processes relating to energy productivity improvements.
Senior management supports, motivates and values the efforts of staff and other stakeholders (for example, project managers, design teams, equipment suppliers, engineering procurement construction management (EPCM) and operation staff) involved in the identification and implementation of energy efficiency opportunities.
202 Key Element 2—People
Skilled and knowledgeable people, and people with direct and indirect influence on the operational energy use of the new development or the expansion through design and development decisions are involved in the assessment, these people may include:
(a) people from the design and commissioning teams—examples may include mechanical engineers, electrical engineers, geotech scientists, planners, commissioning engineers, project managers and the like; and
(b) the operations teams—examples may include process engineers, people from operations teams, maintenance personnel and the like; and
(c) equipment suppliers and contractors involved in design and construction—examples may include multiple suppliers for major pieces of plant, EPC contractors, EPCM contractors; and
(d) technical experts—examples may include internal and external technical experts, people from other similar industries who could identify a different perspective; and
(e) finance and management personnel—examples may include accountants, business improvement staff, project and business management.
The relevant people listed above or similar relevant people are included in a process to improve the energy productivity of the new development or the expansion. Activities undertaken to improve energy productivity may include:
(a) utilising knowledge of existing or similar operations; and
(b) effectively collecting and analysing energy and process data, and factors impacting on energy use, both design and operational as required; and
(c) identifying and evaluating opportunities to reduce energy use or increase productivity relative to energy consumption; and
(d) considering the design and optimisation from all perspectives including energy productivity; and
(e) provide fresh perspectives; and
(f) make the business case for identified energy productivity improvements at the design stage through to commercial operation.
Responsibilities and accountabilities are suitably allocated and team diversity is encouraged.
203 Key Element 3—Information, data and analysis
Predominately relating to early design stages, an analysis is conducted on the whole site which includes energy productivity, to identify a cost effective facility design from an operational and capital cost perspective. This process may include but is not limited to considering:
(a) the requirements of the product which the facility will produce, along with the minimum inputs required to produce the product, and considering the optimum method or methods to produce that product; and
(b) the location and arrangement of equipment to allow opportunities such as heat transfer between processes and reduced distances in bulk handling; and
(c) one or more of:
(i) alternative technology choices; and
(ii) suppliers; and
(iii) energy impacts;
of “off the shelf” equipment; and
(d) best practice equipment and operation; and
(e) how to integrate “off the shelf” equipment.
Relating to design stages prior to construction, predicted energy data, and relating to optimisation, measured energy data, is analysed from different perspectives to understand the relationship between activity and consumption, and to identify energy efficient design features or areas to be optimised. A site‑wide analysis, connecting and communicating data between different operations, systems and sections of the site, and between other sites, where appropriate, is investigated.
Sufficient design data, operational data, or both, in suitable forms, is used to estimate, model and understand future and current energy use, identify and quantify energy savings and improve energy productivity. Models of the design are likely to incorporate energy‑mass flows or other relevant modelling tools.
Provisions are made to track performance and outcomes during operation. This may include appropriate provisions for metering to enable ongoing performance tracking and improvement of energy productivity.
Data accuracy is appropriate to the stage of the design and available data sources. The accuracy is considered when deciding the suitability of the model, assumptions and analysis to make the appropriate project choices.
Processes are put in place to ensure adequate transfer of relevant information, data and potential energy savings initiatives between different design gates through to commercial operation.
If the design involves the provision of a service, site, or supporting infrastructure that is not within the control of the registered corporation, then an investigation of the possibility of a mutual agreement with the entity providing the services, site or supporting infrastructure is conducted, so that a financial benefit can be realised, based on energy savings achieved through design or operational changes.
204 Key element 4—Identification and evaluation of energy savings
An effective process is undertaken to identify potential cost‑effective energy productivity improvements. This process covers all stages of the design through to commercial operation and is broad, open‑minded and encourages innovation.
Sufficient time is taken for the design team to understand and review the information and data from Key Element 3 and the range of perspectives provided by relevant people indicated in Key Element 2 to cooperatively identify and evaluate a range of ideas. Adequate time is scheduled to allow energy productivity improvements to be identified and incorporated into the design.
Relevant ideas are analysed to a sufficient level appropriate to the stage of design. The process allows design aspects that require more detailed investigation to transfer across design stages.
A whole‑of‑business evaluation is undertaken to enable decision‑makers to make informed business decisions about energy efficiency design.
Where relevant, the design process will results in the optimum solution being identified, evaluated and included in the design without alternatives considered. This is particularly relevant for minor design aspects.
Where relevant, energy impacts are included in the evaluation of “off the shelf” equipment.
205 Key element 5—Decision making
Management responsible for resource allocation for the development or the expansion should make informed energy efficiency decisions based on investment quality information, which may include but is not limited to data accuracy, capital costs, maintenance costs, and calculated risks. These decisions and their rationale should be recorded.
Mechanisms for reviewing, monitoring, tracking through design gates and reporting on outcomes are established to learn from experience and enable public reporting.
206 Key element 6—Communicating outcomes
Senior management responsible for the new development or the expansion are aware of the outcomes of the assessment in a strategic business context (including the corporation’s risk management, corporate social responsibility, major investment decisions and energy productivity). Senior management is made aware of capital and operational cost savings as a result of the assessment.
The board reviews and notes the content for the registered corporation’s public report in the context of relevant business information.
Relevant outcomes of each stage of design or development are communicated to the design team indicating what decisions were made and why.
Where relevant, achievements in relation to any objectives identified in Key Element 1 that were set by the design teams, relevant stakeholders, government and senior management responsible for the development or the expansion are communicated.
34 Schedule 7 (heading)
Repeal the heading, substitute:
Schedule 7—Assessment Framework (no new development or expansion)
Note: See subregulation 6.1(1).
