The NSW Greenhouse Gas Reduction Scheme (GGAS) was one of the first mandatory greenhouse gas emissions trading schemes in the world to become fully operational. In assisting to develop and refine GGAS, the Scheme Administrator has kept abreast of related debates and development work both in other Australian jurisdictions and worldwide. It is already contributing - and is well placed to further contribute - to the development of greenhouse gas abatement strategies and programs in Australia and around the world.

Australian developments and schemes
A range of national and state-based schemes in Australia have among their objectives, the reduction of emissions and enhanced removal of greenhouse gases. GGAS has been designed, and continues to be developed, to ensure that there is a clear and transparent interaction with these other schemes as they develop and emerge.

In addition to the schemes discussed below, Commonwealth and state governments are continuing to respond to the issue of climate change with a wide variety of regulatory, voluntary and incentive-based programmes. All state and territory governments are currently investigating the development of a national emissions trading scheme through the Inter-jurisdictional Working Group on Emissions Trading.

Below is a brief description of each of the relevant schemes currently in place in Australia and how they interact with GGAS.

Mandatory Renewable Energy Target (MRET)
Generator Efficiency Standards (GES)
Queensland 13% Gas Scheme
Australian Building Greenhouse Rating Scheme (ABGR)
Green Power
ACT Scheme

Back to top

Mandatory Renewable Energy Target (MRET)
This is a national scheme that places a legal liability on wholesale purchasers of electricity to proportionately contribute towards the generation of an additional 9,500 GWh of renewable energy per year by 2010. This approach is commonly known as a Renewable Portfolio Standard.

MRET uses Renewable Energy Certificates (RECs) to provide incentives for the development of renewable energy sources. RECs are denominated in electricity output (MWh, rather than emissions of CO₂-e) and are currently worth significantly more in the market than NSW Greenhouse Abatement Certificates (NGACs).

In GGAS, a REC and an NGAC cannot be created for the same abatement activity (ie, if a REC is created for a MWh of output, an NGAC cannot be created with respect to that output). However, where a renewable energy project is also reducing methane emissions (eg power generation from the capture and combustion of landfill gas) it is possible to create NGACs for the methane emissions that are being avoided as this is treated by GGAS as a separate abatement activity.

Benchmark participants can use RECs to assist in their annual compliance obligations under the GGAS.

More information on MRET can be found at the website for the Office of the Renewable Energy Regulator.

Back to top

Generator Efficiency Standards (GES)
The GES is a long-standing scheme developed by the Australian Greenhouse Office. The objectives are to provide an approach for power generators to voluntarily work towards achieving best practice in terms of efficiency and greenhouse gas emissions intensity.

The calculation methodologies and testing procedures prescribed in the GES are used within the GGAS Generation Rule. The GES methodologies assist project proponents to determine appropriate baselines and to quantify performance improvements for generating systems which have emissions intensities above the NSW pool coefficient. During 2004, a review of the GES was commenced by the Australian Greenhouse Office. The Scheme Administrator has had some input into this review, and will continue to use the methodologies and approaches prescribed in the GES once the review has been finalised.

Back to top

Queensland 13% Gas Scheme
This scheme commenced on 1 January 2005 and requires Queensland electricity retailers and other liable parties to source at least 13 per cent of their electricity from gas-fired generation. It uses Gas Electricity Certificates (GECs) as a compliance instrument, similar to the way that RECs are used for compliance under MRET.

The objectives of the Queensland 13% gas scheme are to (a) reduce the growth in greenhouse gases associated with electricity use in Queensland; (b) contribute to the diversification of Queensland's energy mix towards the greater use of gas in electricity generation; and (c) encourage the development of new gas sources and gas infrastructure to meet Queensland’s future energy requirements.

GECs are denominated in electricity output (MWh, rather than emissions of CO₂-e) and have initially been priced slightly higher than NGACs. The Queensland Department of Energy has commenced development of the administrative processes required to implement the 13% gas scheme, and it is anticipated that the details of the scheme will be released over the course of 2005.

The NSW Department of Water and Energy and the Scheme Administrator are working with the Queensland Government to ensure that the interaction of the 13% gas scheme and GGAS is efficient and transparent, and that no ‘double-counting’ of GECs and NGACs is possible.

Back to top

Australian Building Greenhouse Rating Scheme (ABGR)
The ABGR provides a consistent and robust approach to evaluating the greenhouse performance of commercial office buildings, and employs a ‘star rating’ to allow differentiation within the industry.

The GGAS Demand Side Abatement Rule refers to the ABGR in one of its methodologies, and over the course of 2004 the Scheme Administrator successfully integrated the required NGAC calculations for this demand side abatement methodology into the templates that are used by ABGR assessors. This allows ABGR assessments to instantaneously provide valid NGAC calculations without the need for further analysis or auditing, and has proven to be an efficient and attractive approach for commercial building managers and tenants alike to participate in GGAS.

Back to top

Green Power
This scheme was developed by the Sustainable Energy and Development Authority (now incorporated into the NSW Department of Water and Energy) and is a national accreditation program that sets stringent environmental and reporting standards for renewable energy products offered by electricity retailers to households and businesses across Australia.

This scheme provides a certification mechanism for the provision of zero emissions electricity to consumers across Australia. Organisations who purchase Green Power (usually as a given percentage of their total electricity consumption) cannot claim that initiative as an emissions reduction under GGAS. Green Power is administered by the NSW Department of Water and Energy.

Back to top