{"data":{"id":"sbm36b2454cc284bb9bc6be6","short_id":24,"created":"2025-07-18T06:15:52.770Z","space_id":"spc35f39a68c3255bca82dcb","project_id":"prj35f39a54b2b946a3ebba7","org_id":"org20ee740c8b3c21feb3566","content":{"8q21898g":["09399e"],"zovp5q48":"Tesla","skip-to-end-of-s_bb8651":"yes","upload-a-submiss_9dbd27":"fil374185ed008534aeec23a"},"is_topic":false,"title":null,"count_replies":0,"closed":false,"reply_to_id":null,"last_activity":null,"reactions":{},"_files":{"fil374185ed008534aeec23a":{"id":"fil374185ed008534aeec23a","bucket":"files-au-climate","remote_path":"climate-au/p/prj35f39a54b2b946a3ebba7/submission/spc35f39a68c3255bca82dcb/DCCEEW_REGO_for_storage_systems_Redacted.65dbcb76.pdf","url":"https://storage.googleapis.com/files-au-climate/climate-au/p/prj35f39a54b2b946a3ebba7/submission/spc35f39a68c3255bca82dcb/DCCEEW_REGO_for_storage_systems_Redacted.65dbcb76.pdf","filename":"DCCEEW - REGO for storage systems_Redacted.pdf","transcribed":"Tesla Motors Australia, Pty. Ltd.\n546 Gardeners Rd\nAlexandria NSW 2015\n\nDirector, Renewable Energy Guarantee of Origin Section\nDepartment of Climate Change, Energy, the Environment and Water\nGPO Box 3090\nCanberra ACT 2601\n\n15 July 2025\n\nDear ,\n\nRE: Tesla’s Response to the Exposure Drafts of legislative instruments that will support the Guarantee of Origin (GO) scheme\n\nTesla Motors Australia, Pty Ltd (Tesla) welcomes the opportunity to provide the\nDepartment of Climate Change, Energy, the Environment and Water (DCCEEW) with feedback on the Exposure Drafts of legislative instruments that will support the\nGuarantee of Origin (GO) scheme. Our feedback below is specifically related to the\nConcept Paper – Energy Storage Systems.\nTesla’s mission is to accelerate the transition to sustainable energy. A core element of this mission is building the foundation for a distributed, resilient, and renewables-powered grid. Tesla is at the forefront of this transformation, having deployed more than 22 GWh of utility-scale batteries globally, a further 2.8 GWh through Tesla VPPs, in addition to the sophisticated software and control systems that enable their effective participation in the market. Tesla believes a well-designed GO framework is essential to properly recognise the capabilities of Battery Energy Storage System (BESS) technologies and to create efficient market signals for future investment in a sustainable grid.\nIn this submission we note several key issues compromising the viability of the proposed scheme for BESS operators, stemming from a misalignment between the scheme's rules and the commercial realities of operating a BESS. If these barriers remain unresolved,\nBESS operators will likely opt out of this voluntary scheme, undermining its objective to accelerate the transition to a net-zero grid.\nTesla looks forward to continued engagement with DCCEEW and actively participating in ongoing discussions on the design of the REGO scheme, including through any further technical workshops for Energy Storage Systems.\nKind regards,\nTesla Energy Policy Team energypolicyau@tesla.com\nThe Case for Hourly Time-Matching\n\nWhile the proposed framework allows for GOs to be created on an hourly, daily, or monthly basis, this flexibility presents a significant risk to the scheme's efficacy in reducing emissions.\nWe acknowledge the intention to provide flexibility as the scheme is established, however, it is highly probable that many buyers and sellers will default to the least granular options, such as monthly or daily timestamping, to minimise administrative overhead. This tendency was noted in stakeholder feedback during the 2023 consultation on the Renewable Guarantee of Origin\nApproach Paper.\n\nThis outcome would significantly undermine the scheme’s potential to drive meaningful grid decarbonisation. A consumer purchasing a daily or monthly GO may appear to be matching their consumption on average, but they are still drawing power from a grid that relies on fossil fuels during periods of low renewable output, typically in the mornings and evenings. In contrast, hourly matching provides a true, concurrent signal that empowers consumers to align their demand with actual renewable generation.\n\nThis discrepancy is widely recognised: as an ENTSO taskforce noted, “A GO buyer may theoretically match its consumption with certified production on an annual average basis while still being dependent on production from fossil fuel in practice.”1 The practical importance of this distinction is demonstrated by Google's extensive analysis of its own energy use. Despite matching 100% of its global annual electricity consumption with renewable energy purchases since 2017, the company found that in 2019, only 61% of its consumption was matched with carbon-free energy on an hourly basis.2 This real-world experience from a market leader highlights that annual or monthly accounting can obscure a significant, ongoing reliance on fossil-fuel generation.\n\nThis finding is consistent with a growing body of research concluding that low-resolution matching does not meaningfully reduce system-wide emissions. Academic studies confirm that while annual matching often fails to deliver significant additional emission reductions compared to a baseline, hourly matching drives substantial cuts.3 Furthermore, hourly signals create incentives for a \"more system-friendly technology mix,\" 3 encouraging investment in firming technologies like battery storage that are needed to support the grid around the clock. 4 In contrast, annual matching tends to favour investment in only the cheapest available resources, such as solar, without regard for when that energy is most needed.3\n\n1\nEuropean Network of Transmission System Operators (2022), Views on a Future Proof Market Design for Guarantees of\nOrigin. https://eepublicdownloads.blob.core.windows.net/public-cdn-container/clean- documents/Publications/Position%20papers%20and%20reports/2022/entso- e_pp_guarantees_of_origin_220715%20for%20publication.pdf\n2\nGoogle (2020), 24/7 Carbon-Free Energy: A new approach for a carbon-free grid. https://www.gstatic.com/gumdrop/sustainability/247-carbon-free-energy.pdf\n3\nLanger et al. (2024), Does the purchase of voluntary renewable energy certificates lead to emission reductions? A review of studies quantifying the impact. https://www.sciencedirect.com/science/article/pii/S0959652624032402\n4\nRiepin et al. (2024), 24/7 carbon-free electricity matching accelerates adoption of advanced clean energy technologies.\nhttps://www.sciencedirect.com/science/article/abs/pii/S2542435124005440\nAccordingly, Tesla provides the following recommendations as a phased approach\n\n1. DCCEEW mandate granular timestamping: Hourly timestamping should be the\nmandatory standard for all REGOs from the scheme's inception. At a minimum, a\ndefinitive and near-term date should be committed for this to become the required\nlevel of granularity.\n\n2. REGO scheme to enable greater granularity: The framework should support even more\nprecise time-matching, specifically 15-minute intervals, to align with the physical\noperations of the National Electricity Market. This approach would mirror international\nbest practice, such as the EU's Renewable Energy Directive (RED III), which mandates\ngranular certificates reflecting actual production times.5 The technical capability for this\nis readily available, as assets like BESS already manage data at sub-second intervals.\n\nTesla recognises the scheme's objective to rapidly increase renewable generation, particularly in its early stages. However, we believe there is a significant downside in delaying the transition from broad net-zero targets towards a more accurate \"true zero\" emissions. As a recent analysis warns, ignoring the granular temporal attributes of renewable energy could create \"a situation with an abundance of cheap solar and wind, lacking the commensurate green firming and storage needed to address temporal gaps, thereby increasing the total costs of achieving true zero.”6\n\nBy building these precise market signals into the GO scheme from the beginning, DCCEEW can guide investment efficiently towards the balanced mix of generation and storage needed for a reliable, fully decarbonised grid, ultimately avoiding higher costs and integration challenges in the future.\n\nA Further Argument: The Critical Role of Granularity for Energy Storage\n\nEnergy storage assets occupy a unique position within the energy market, acting as both consumers and producers of electricity. Consequently, within the REGO scheme, they will be the only asset class that must operate on both sides of the ledger: buying certificates to cover charging activity and selling certificates when discharging. The financial viability of their participation hinges on a temporal arbitrage model, purchasing lower priced certificates (e.g.\nwhen solar is abundant in the middle of the day) for electricity imports.\n\nHowever, a market dominated by low-granularity certificates, e.g. monthly to yearly, erodes this business case. By averaging the value of renewable generation over long periods, such certificates mask the crucial price signals between peak and off-peak hours, creating a flat,\n\n5\nEuropean Union (2023), Directive (EU) 2023/2413 of the European Parliament and of the Council. Official\nJournal of the European Union. https://eur-lex.europa.eu/eli/dir/2023/2413/oj\n6\nSamarakoon et al. (2025), The right time for real-time? Stakeholder perspectives on the role of temporal matching in renewable energy procurement in Australia. https://www.sciencedirect.com/science/article/pii/S2214629625001409\nhomogenous market. This eliminates the arbitrage opportunity that would otherwise attract\nBESS operators to the scheme.\n\nGiven that the REGO scheme is voluntary, this presents a critical risk. If the certificate market is not structured to be commercially attractive, BESS operators are unlikely to participate. This would be a significant weakness of the scheme, as it would fail to engage and incentivise the very technology class that is essential for firming intermittent renewables and enabling a stable transition to a net-zero grid.\n\nThis point further reinforces Tesla’s first recommendation to mandate granular timestamping.\n\nRefining Storage Liability with Emissions Factors\n\nOffering an additional, or alternative, solution to better reflect the operational reality of energy storage, Tesla proposes adjusting the \"electricity in\" calculation for BESS. Rather than assuming all grid imports are 100% non-renewable, the MWh liability for storage assets should be modified by an hourly residual mixed emissions factor. This approach will avoid the current model’s inadvertent penalisation of grid-stabilising arbitrage.\n\nUnder the proposed solution, the quantity of certificates a storage asset must surrender would be based on the non-renewable portion of its grid charge. For example, if a battery charges 100\nMWh when the residual emissions factor is 0.4 tCO2e/MWh, it would only be required to surrender certificates equivalent to 40 MWh. The remaining 60% is correctly assumed to be from renewable sources not otherwise creating certificates.\n\nThis solution is both pragmatic and effective for several key reasons:\n\n• Aligns incentives: It rewards storage for charging during periods of renewable\nabundance, directly supporting the scheme's goal of time-shifting green energy.\n\n• Prevents double counting: Using a residual factor rather than a total grid factor\ncorrectly accounts for uncertified renewable energy (e.g. rooftop solar)\n\n• Administratively feasible: The proposal leverages the existing residual mixed\nemissions factor in the National Greenhouse Accounts (NGA).\n\nWhile not a perfect real-time accounting, this approach is a significant improvement. It offers a far more accurate and equitable model than assuming 100% of grid imports are non- renewable, and it better aligns the commercial incentives for storage with Australia's decarbonisation objectives.\n\nTesla’s recommendation:\n\n3. Include a residual mixed emissions factor for “electricity in” calculations for BESS, to\nensure charging costs are not unfairly inflated by emissions already accounted for by\nothers.\nCalculation for Auxiliary Losses\n\nThe concept paper’s proposed formula for calculating maximum eligible amounts, which appears adapted from the LGC methodology for generators, is less than ideal for energy storage assets because it includes a separate calculation for auxiliary losses.\n\nThe operational efficiency of a storage asset is most accurately determined by a simple \"energy out over energy in\" formula. This method inherently accounts for all system losses, including auxiliary loads, and aligns with established precedents like the NGER reporting framework.\n\nThe current proposal inaccurately penalises the asset by creating an efficiency factor that is lower than the BESS's true operational performance.\n\nTesla’s recommendation:\n\n4. DCCEEW to remove the additional auxiliary loss calculation for energy storage systems.","size":193594,"redacted":[],"meta":{"name":"DCCEEW_REGO_for_storage_systems_Redacted.65dbcb76.pdf","local_path":"files/YSSc2Q8Ek1KwjDL0rofrP2Nf.pdf"},"config":{}}}}}