By: Energy & Street Lighting Coordinator, Travis Sydes...
Summary of Stages:
Register your project with an approved project method for calculating emissions. There are a number of these, each of which is tailored to particular project types. Registering your project does not mean you have to follow through; it simply gives you the option to get Australian Carbon Credits in future. The project must be new, cannot be retrospective.
Start your project at any time.
Once you start your project you start reporting. Reporting requirements vary depending on the type of project. As an example, replacing 7,000 streetlights is considered small and over say 7 years there will be approx. 3 reporting periods. You can say when these will be. Once you start reporting you start getting your carbon credits. Within this period you are also required to get your reports audited by an approved qualified NGER auditor. An approved list of these is available.
With your carbon credits you can choose to either auction your credits, sell them on the secondary market or partner with a corporation seeking to purchase carbon credits. Generally you have your carbon credits for a maximum of 7 years – it is not continuous (sequestration is 25 to 100yrs)
Under the auction option there is a requirement to enter into an agreement with the federal government. The term of this agreement is negotiable and you can split your credits and have different terms.
Secondary Market option
Under this option you can choose to sell your credits through other means and provides an opportunity outside of a government contract to generate revenue. There are ‘banks’ available for this and it is suspected that ‘brokers’ will also start to emerge.
Corporate Partnership option
You are free to sell your credits under a corporate partnership option and the agreement is between yourselves and the corporation.
Example Project – Street lighting
Say the project is to replace 7,000 Mercury Vapour lamps with LED’s within a local government (or regional) area. I am going to use regional approach in this example to reduce the audit costs.
7,000 Street lights = approximately 2,000 tonnes CO2-e per year.
Based on $13.95 per credit this would return $27,900 per year.
Multiplied by 7 years = $195,300
Less 3 x Audits over the 7 years at around $15,000 per audit ($45,000) = $150,300 over the 7 years in revenue for reducing emissions.
Arguably, this in itself is not enough to justify a replacement program of 7,000 streetlights but may help strengthen the cost benefit of such a project.
Under the Australian Energy Regulator (AER) draft determination for Ergon Energy, to retire existing functioning streetlights outside the LED transition program an exit fee is payable. The proposed 2015/16 fees for Gifted and Ergon operated minor lights are $195. This would cost $1,365,000 for 7,000 lights.
The energy savings realised moving from MV to LED for 7,000 per year =$ 425,941 per year.
Cost to replace 7,000 MV to LED =$1,365,000
Energy savings $425,941 x 7yrs = $2,981,587
EMF revenue over 7 yrs. = $150,300
Approx. savings over 7 years = $1,766,887 however, as you can see, the revenue gained from the ERF while beneficial is not significant.
Note: assumptions are made based on 2013/14 tariffs, receiving $13.95 per credit and no additional charges.
Additional Notes of Interest
Should you have any queries, please do not hesitate to contact us for clarification or direction
For those who missed the ERF opportunities for public lighting webinar recently a link has been posted on the CER website. Other links to information on public lighting are on the link page as well.
More information about the fund and the auction process is on the Clean Energy Regulator website