New South Wales government considers mandatory emissions cuts

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The New South Wales (NSW) government is proposing that its voluntary emissions reduction plan, introduced three years ago, become mandatory after only two electricity retailers met their targets. If adopted in July 2002 as expected, it will become the first state government policy initiative in Australia to enforce reduction requirements for electricity retailers. The proposal requires that by 2007 all NSW electricity retailers reduce by 5% below 1990 emission levels the greenhouse gas emissions associated with supplying NSW customers with electricity. The target in 2007 is for per capita emissions to step down from current levels to 7.27 tonnes of CO2 per head, representing a drop of 14%. Retailers will pay a penalty if greenhouse gas emissions exceed their annual benchmarks, with the penalty rate to be set at least as high as the cost of complying with the target. Electricity bought to meet green power obligations and those of the national Mandatory Renewable Energy Target (MRET) can also be used to meet the benchmarks. Ric Brazzale of the Australian Ecogeneration Association says that although the measure is not expected to stimulate additional renewable capacity above the MRET, it will enhance long term investment certainty since it is an additional incentive for NSW retailers to enter into long term agreements with wind developers. "It does provide another revenue opportunity, but because of the cap on the MRET, there is no extra renewable capacity expected." To meet their targets, retailers are expected to invest in planting trees as carbon sinks, energy efficiency, cogeneration, gas fired generators and coal-seam methane. In its current form the proposal does not rule out electricity bought from generators outside of NSW, but local embedded generators were favoured under the proposal. The policy is currently in draft format.

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