Renewable Energy Target: LRET 33,000 GWh and the small-scale STC scheme to 2030
Renewable Energy (Electricity) Act 2000 framework - the 33,000 GWh Large-scale Renewable Energy Target through 2030 and the SRES small-scale technology certificate scheme.
The Renewable Energy (Electricity) Act 2000
The Renewable Energy (Electricity) Act 2000 establishes Australia’s Renewable Energy Target (RET) and received Royal Assent on 21 December 2000. The Act provides the legislative framework for the creation and operation of the RET, which aims to increase the supply of electricity from renewable sources. The Act is administered alongside the NGER greenhouse and energy reporting Act 2007.
In 2011, the RET was split into the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). This division allows for separate management of large-scale renewable energy projects and smaller, distributed generation. The Clean Energy Regulator administers both schemes under the Act and the Renewable Energy (Electricity) Regulations 2001.
Liable entities, generally wholesale purchasers of electricity, must surrender certificates each year to meet their statutory liability. Failure to surrender the required certificates results in a shortfall charge of $65 per MWh (non-tax deductible).
Large-scale Renewable Energy Target (LRET)
The Renewable Energy (Electricity) Amendment Act 2015 established a fixed target for the Large-scale Renewable Energy Target (LRET). This target requires 33,000 GWh of new renewable electricity annually from 2021 through 2030. This amendment altered the previous trajectory of the scheme. Carbon Border Adjustment Mechanism (CBAM) Australia may impact future renewable energy projects.
Accredited large-scale generators produce one Large-scale Generation Certificate (LGC) for each megawatt-hour of eligible generation. Liable entities are required to surrender LGCs to fulfil their obligation in meeting the annual large-scale target.
The LRET will cease to operate on 31 December 2030. After this date, no further LGCs will be created. LGCs are traded within a private market, and their value fluctuates based on supply and the demand for surrender.
Small-scale Renewable Energy Scheme (SRES)
The Small-scale Renewable Energy Scheme (SRES) provides support for eligible small-scale renewable energy installations. These include rooftop solar PV, small-scale wind, small-scale hydro and solar water heaters / air-source heat pumps. GEMS Act energy labelling provides further information on eligible technologies.
Small-scale Technology Certificates (STCs) are generated by system owners. These certificates represent deemed MWh of generation or displacement and contribute to meeting the Large-scale Renewable Energy Target. The deeming periods used to calculate STC creation reduce by one year each calendar year as the scheme progresses towards its conclusion.
STCs are purchased by liable entities, either through the Clearing House at a fixed price or on the private market. The SRES is legislated to end on 31 December 2030. The scheme reduces the upfront cost of eligible installations by roughly 30% according to Clean Energy Regulator estimates.
Liability, compliance and reporting
Liability for compliance with the Large-scale Renewable Energy Target (LRET) and Small-scale Renewable Energy Scheme (SRES) rests with liable entities. These entities are required to lodge an energy acquisition statement and surrender certificates annually, by 14 February. The Renewable Power Percentage (RPP) for the LRET and Small-scale Technology Percentage (STP) for the SRES are set annually by regulation. GEMS Act energy labelling
Accreditation is a key requirement for participation. Large-scale power stations must be accredited under section 14 of the Renewable Energy (Electricity) Act before Large-scale generation certificates (LGCs) can be created. Similarly, solar retailers and installers must adhere to the Clean Energy Council's accreditation rules to ensure the creation of valid Small-scale technology certificates (STCs).
Creating certificates fraudulently is an offence under section 24 of the Renewable Energy (Electricity) Act. The Clean Energy Regulator (CER) has the power to apply civil penalties in cases of non-compliance or offences.
Frequently asked
Does the LRET target keep rising after 2021?
No. The LRET target is fixed at 33,000 GWh per year from 2021 through 2030 under the 2015 amendments. There is no further legislated escalation, and the scheme sunsets at the end of 2030.
What happens when the SRES ends in 2030?
Under the REE Act the SRES is legislated to end on 31 December 2030. After that date no new STCs can be created, although existing STCs may still be surrendered before the scheme's full close-out.