NSW GGAS Scheme Summary: Reducing Emissions Through Generation, Demand Reduction and Trading
1. NSW GGASScheme SummaryA presentation prepared by AGL For further information: Simon Kelleyskelley@agl.com.au Tim Nelsontanelson@agl.com.au
2. Retailers in NSW (and ACT) are required to reduce emissions to 7.27 tonnes per capita (95% of 1990 levels) from 2007 Each retailers total allowable emissions is determined by market share of sales X overall emission target (based upon population X 7.27) Each retailer’s emissions are determined by multiplying the pool coefficient (emissions intensity of electricity sold in NSW) by sales If emissions are higher than their benchmark, retailers can purchase emission reduction certificates (NSW Greenhouse Gas Abatement Certificates - NGACS) to meet their benchmark A NSW Greenhouse Gas Abatement Certificate is equal to 1 tonne of abatement Once a national emissions trading scheme is established GGAS will be transitioned in the ETS Overview AGL Energy March 2010
3. Creating NGACs There are four main ways in which an NGAC can be created: lower emission generation (throughout the NEM except RECs) demand reductions (in NSW) abatement created by large users (who elect to manage their own benchmark) – use over 100 GWh of electricity at one or more sites in NSW, as long as one of the sites uses over 50 GWh carbon sequestration (i.e. trees planted in NSW) AGL Energy March 2010
4. Creating Generation NGACs Four categories of generator Category A: generators that entered into PPAs with retailers before the scheme became mandatory. (This is to cease 1 July 2010) Category B: existing NSW coal fired generators Category C: other existing generators Category D: new (generally renewable) generation Two approaches can be used relative intensity entitles the generator to create NGACs for generators with an intensity below the pool coefficient efficiency improvement approach allows generators that improve their emissions intensity to create NGACs Generators cannot create NGACs for a MWh of generation used to create a REC AGL Energy March 2010
5. Creating Generation NGACs Landfill and coal-mine methane are also entitled to create NGACs for ‘avoided methane’ releases coal-mine methane must be sourced from a site which is located within a coal-mine production lease (even if the mine has closed) AGL Energy March 2010
6. Creating Demand-side NGACs Energy efficiency projects that modify existing consuming installations Energy efficiency projects that replace existing installations with other installations that consume less electricity Energy efficiency projects that install new installations that consume less electricity than other installations of the same type Fuel switching projects that substitute one source of energy for another On-site electricity generation that replaces supply from the National Electricity Market AGL Energy March 2010