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Renewable Energy Target

Deliverable

Support for increased investment in renewable electricity generation through administration of the Renewable Energy Target.

Maintenance of public registers of renewable energy certificates, registered persons, power stations and eligible solar water heaters.

Inspection of a statistically significant number of small generation units installed in a given year.

Snapshot

The Renewable Energy Target is designed to encourage investment in renewable energy systems and ensure that at least 20 per cent of Australia's electricity supply will come from renewable sources by 2020.

The Renewable Energy Target comprises two schemes, the Large-scale Renewable Energy Target and the Small-scale Renewable Energy Scheme. Together they provide a market-based financial incentive to increase the contribution of electricity generated from renewable sources to Australia's energy market. The Clean Energy Regulator is responsible for administering both schemes in accordance with the Renewable Energy (Electricity) Act 2000.

Registered persons and agents

In order to create large-scale generation certificates or small-scale technology certificates, an individual or company must apply to become a registered person or registered agent. Table 3.6 details the numbers of applications processed and timeliness for processing in 2013–14.

Table 3.6: Number of applications for registered persons and registered agents
 ProcessedProcessed within standard (%)Cumulative total to 30 June 2014a
Registered agents881001,469
Registered persons2041007,365

a Total from the commencement of the Renewable Energy Target to 30 June 2014.

Note: In the 2012–13 Annual Report, results for registered agents and registered persons were unintentionally reversed. The correct results were 507 applications processed, making a total of 7,161 registered persons, and 154 applications processed, making a total of 1,381 registered agents.

Large-scale Renewable Energy Target

Renewable energy power stations

Growth in numbers of renewable energy power stations was reflected in the 34 applications for accreditation as a renewable energy power station that the Clean Energy Regulator received and approved during 2013–14. These applications were all processed within the legislated six-week timeframe.

The addition of these power stations brought the total number of accredited renewable energy power stations to 413. The number of accredited power stations has grown steadily over the life of the scheme, as shown in Figure 3.2.

Figure 3.2: Cumulative number of accredited renewable energy power stations since 2001

see following table
Accreditation YearCumulative number of accredited power stations
2001138
2002174
2003189
2004200
2005225
2006237
2007255
2008270
2009291
2010315
2011336
2012368
2013394
2014413

Figure 3.3 shows the energy sources used by accredited power stations to generate electricity. In 2013–14, there was a significant increase in the number of renewable energy power stations using solar energy.

Figure 3.3: Accredited renewable energy power stations, by renewable energy source

see following table
Bagasse270
Biomass-Based Components of Municipal Solid Waste604
Hydro1044
Landfill gas621
Solar  8521
Wind754

a The biomass category includes multiple energy sources (agricultural waste, biomass-based components of municipal solid waste, black liquor, energy crops, food processing waste, food waste, sewage gas and biomass-based components of sewage, waste from processing of agricultural products and wood waste).

Note: Some power stations are accredited for multiple fuel sources.

Feature article - Wine industry investment in solar generation

Feature Wine industry investment in solar generation

Australia has high levels of solar radiation and over two million solar energy systems have been installed on Australian rooftops. Solar power stations contribute over 21 per cent of the renewable energy power stations accredited under the Renewable Energy Target.

The number of accredited power stations utilising solar energy increased significantly during 2013–14. There was an increase in the number of regional businesses contributing to emissions reduction and also realising benefits through improved electricity supply and lower power costs by installing large photovoltaic generators at their facilities.

The wine industry is one sector that is increasing its use of solar energy to meet its electricity needs. In 2013– 14, four medium-sized solar power stations were installed at wineries, in the Australian Capital Territory, South Australia, Queensland and Victoria. In addition, almost a dozen wineries and estates around Australia installed smaller generating units. The additional renewable generating capacity installed by the wine industry during the year was in excess of 1.7 megawatts.

One of the businesses accredited for a large power station in 2013–14 was the d'Arenberg winery in South Australia's McLaren Vale region. d'Arenberg's 200 kilowatt solar photovoltaic generator is the largest installed by a South Australian winery.

The Osborn family has owned and operated the d'Arenberg property for over 100 years. The winery has invested in a number of environmentally beneficial projects with a view to passing on a more sustainable business legacy.

The solar power station that d'Arenberg commissioned on 3 December 2013 will generate an estimated 290 megawatt hours of electricity per year, which is around 20 per cent to 30 per cent of the electricity used in the winery's manufacturing process.

The benefits to be realised by d'Arenberg from this power station include an estimated annual saving of $50,000 on electricity costs, and a reduction in greenhouse gas emissions of more than 181 tonnes of carbon dioxide.

Large-scale generation certificates

In 2013–14, the Clean Energy Regulator validated the equivalent of 15,585,858 megawatt hours of large-scale generation certificates for electricity produced by accredited renewable energy power stations. That is enough electricity to power over 2.4 million homes per year (the typical Australian household consumes 122.3 kilowatt hours of electricity per week).

Small-scale Renewable Energy Scheme

Installations

The Clean Energy Regulator validated certificates from 214,675 small-scale installations in 2013–14. Small-scale systems must be installed by an installer accredited by the Clean Energy Council and may be selected for further audit before their certificates can be validated.

Table 3.7 shows valid small-scale system installations for 2013–14, excluding installations that failed to pass audit or were pending audit at 30 June 2014.

Table 3.7: Valid small-scale system installations
 Solar water heaterAir source heat pumpSolar panel systemWind systemHydro systemTotal
2013–14 total41,1508,195165,32640214,675
Cumulative totala691,381178,2851,256,026381152,126,088

a Total from the commencement of the Renewable Energy Target to 30 June 2014.

Inspections programme

The Clean Energy Regulator must inspect a statistically significant selection of small generation units for their compliance with the eligibility criteria for claiming certificates. The objective of the inspection programme is to understand whether the increased installation demand resulting from Renewable Energy Target incentives is altering installation compliance with eligibility criteria, including relevant Australian standards related to electrical safety.

As the responsibility for electrical safety is a matter for state and territory electrical safety regulators, the Clean Energy Regulator works with these regulators in the design and implementation of the inspection programme.

The Clean Energy Regulator received 2,813 reports on inspections conducted in
2013–14. Inspection results were regularly published on the Clean Energy Regulator website.

The proportion of systems assessed as compliant relative to 2012–13 declined from 85.5 per cent to 82.9 per cent. The small decline in compliance was attributed to some installers being unaware of recent changes in Australian and New Zealand standards requirements.

The safety of systems improved, as shown by a decrease in the proportion of systems assessed as unsafe, from 3.7 per cent in 2012–13 to 3.1 per cent in 2013–14. All systems categorised as unsafe are referred to the relevant state or territory electrical regulators.

The results of the inspections programme are summarised in Table 3.8.

Table 3.8: Renewable Energy Target inspections programme results

Table 3.8: Renewable Energy Target inspections programme results
Inspections programmeCompliantSubstandardUnsafeTotal
2013–14 total2,337388882,813
Cumulative totala9,1661,65343811,257

a Total results since the inspections programme commenced in May 2011.

Registration of solar water heaters

Inclusion in the Register of Solar Water Heaters enables water heater models to be eligible for the Small-scale Renewable Energy Scheme.

The Clean Energy Regulator approved 2,422 applications for solar and heat pump water heater models to be included in the register during 2013–14. All applications were processed within the regulated 180-day timeframe.

Small-scale technology certificates

Registered persons and agents created 19,528,096 small-scale technology certificates in 2013–14.

All small-scale technology certificates are subject to a rigorous validation process before they are made available for sale or trade. In 2013–14, 100 per cent of small-scale technology certificates were subject to data analysis and review in the Renewable Energy Certificate Registry (REC Registry). Other validation activities included electronic matching of records, desktop audits, agent visits, the use of aerial photography, client engagement, investigations and enforcement action.

In 2013–14, the Clean Energy Regulator conducted a validation audit process for 19,348,881 certificates: 18,005,648 (93 per cent) passed and 1,343,233 failed, requiring remedial action and resubmission. The average validation time was 16 days, well within the agency's service benchmark. Figure 3.4 shows the time taken to complete validation audits.

Figure 3.4: Average days between creation and audit of small-scale technology certificates

see following table
Row LabelsAverage days between creation and auditCertificates created
Grand Total1619,520,537
Jul to Sep 2013155,150,079
Oct to Dec 2013154,928,095
Jan to Mar 2014 174,705,038
Apr to Jun 2014174,737,325

Partial exemptions

The Clean Energy Regulator issues partial exemption certificates to provide partial exemption from Renewable Energy Target liability in respect of electricity used in defined emissions-intensive trade-exposed activities.

Applications for partial exemption may be made for a specific compliance year (1 January to 31 December). During 2013–14, the Clean Energy Regulator received and assessed applications for partial exemptions for 2013 and 2014.

The Renewable Energy (Electricity) Act 2000 requires that certain applications must be accompanied by independent audit reports prepared by qualified assurance providers. All applicable applications were accompanied by audit reports.

Table 3.9 shows the partial exemption applications received and certificates issued during 2013–14.

Table 3.9: Number of partial exemptions processed in 2013–14
Compliance yearApplications submittedCertificates issuedApproximate partial exemption (GWh)Processed within standard (%)Outstanding at 30 June 2014
201316251201001
201416214626,1409016

GWh = gigawatt hours

Surrender of certificates

Under the Renewable Energy Target, liable entities, usually electricity retailers, have legal obligations to surrender renewable energy certificates to the Clean Energy Regulator.

Renewable Energy Target liable entities are required to acquit their liability by 14 February each year. Large-scale generation certificates must be surrendered on an annual basis and small-scale technology certificates must be surrendered quarterly.

If a liable entity fails to surrender the correct number of renewable energy certificates by the due date, it is required to pay a shortfall charge of $65 (exclusive of GST) per certificate. In the case of large-scale certificate shortfalls, before paying a shortfall charge of $65 (exclusive of GST), a liable entity may be able to have a carried forward large-scale certificate liability within ten per cent of its assessed large-scale certificate liability for the year.

Liable entities may acquire certificates at any time and hold them in their REC Registry accounts. The spot market cost of renewable energy certificates ranged between $20 and $40 (exclusive of GST) during 2013–14.

Liable entities offered a total of 18,942,330 large-scale generation certificates and a total of 34,990,257 small-scale technology certificates to acquit 2013 assessment (calendar) year obligations.

Any information relating to energy acquisition statements lodged by Renewable Energy Target liable entities may be audited by the Clean Energy Regulator. During 2013–14, the Clean Energy Regulator made a total of 19 site visits to liable entities, ten in Melbourne and nine in Perth, to educate them on the preparation of their annual energy acquisition statements.

Liable entities maintained a compliance level of over 99 per cent for the Renewable Energy Target during the 2013 assessment year. Table 3.10 summarises the compliance rate for the past two assessment years.

Table 3.10: Renewable Energy Target liabilities discharged for 2012 and 2013
Description20122013
Number of liable entities86.098.0
Percentage of large-scale generation certificate liability discharged99.099.7
Percentage of small-scale technology certificate liability discharged99.599.6

REC Registry

The REC Registry is a secure online application that facilitates the creation, sale, trade and surrender of large-scale generation certificates and small-scale technology certificates. It also maintains public registers as set out under the Renewable Energy (Electricity) Act 2000.

The Small-scale Technology Certificate Clearing House (STC Clearing House) is a facility within the REC Registry that allows for the sale of small-scale technology certificates at a price of $40 (exclusive of GST) per certificate. This is not a government guaranteed price but rather is the fixed price for the sale of small-scale technology certificates within the STC Clearing House.

The REC Registry and STC Clearing House are regularly tested and audited to maintain security certification.

The Clean Energy Regulator is working to redesign the REC Registry to improve the user interface, reduce the administrative burden for both clients and the Clean Energy Regulator, and provide a flexible framework that can adapt to peak workloads and changes in legislative requirements. The redesign project commenced in 2013 and was substantially complete by 30 June 2014. The new system was implemented on 15 September 2014.

Our risk-based approach to improving efficiency in our operations will continue to pay dividends to our clients and ourselves.

– Chloe Munro

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