For a renewable energy source to be eligible for the creation of certificates it must meet several criteria, including that the source is ‘ecologically sustainable’. An ecologically sustainable source is one that is generated in a manner consistent with the principles of ecologically sustainable development. The National Strategy for Ecologically Sustainable Development summarises the principles as taking action in order to ‘meet the needs of Australians today, while conserving our ecosystems for the benefit of future generations’.⁹

Section 17 of the Act lists 19 renewable energy sources that are considered to be ecologically sustainable and therefore eligible for the creation of renewable energy certificates. The main types are:

• biomass sources that use vegetable and animal-derived organic material such as wood waste, agricultural waste, food processing waste or bagasse (a residue from sugar cane milling) to fuel engines or steam turbines, excluding fossilised biomass
• landfill gas sources that harness methane emitted from landfills (mainly solid wastes and industrial wastes) to fuel engines or steam turbines
• solar power sources that use sunlight to heat air, water or other fluids to drive turbines or convert solar radiation into electricity through photovoltaic cells
• wind sources that harness wind currents to drive turbines
• hydroelectric sources that harness kinetic energy from reservoirs, rivers, streams or waterfalls to drive turbines.

In addition, the Renewable Energy (Electricity) Regulations 2001 set out specific eligibility requirements for other sources, such as waste coal mine gas, which are considered ecologically sustainable under certain conditions.

When seeking accreditation of a power station under the Renewable Energy Target, applicants must provide evidence that the power station uses an ecologically sustainable power source and conforms to relevant planning and environmental laws.

Case study: Harvesting energy from landfill emissions

In 2009–10, the most recent year for which data are available, the Australian economy generated an estimated 53.7 million tonnes of waste, of which 24.9 million tonnes was disposed of in landfill.¹⁰ Decomposing waste generates landfill gas, which typically contains between 45 per cent and 60 per cent methane—a greenhouse gas with a global warming potential 21 times greater than that of carbon dioxide over a 100-year span.¹¹ The landfill gas power generation industry is now capturing much of these emissions and many landfill operators are converting the gas to electricity.

The landfill gas power generation industry has invested more than $500 million throughout Australia in generating capacity of more than 185 megawatts. Landfill gas power stations generate approximately 850 gigawatt hours of renewable electricity annually, enough to power more than 133,000 average Australian households.¹² The industry employs more than 300 people directly and a further several hundred indirectly, providing ‘green jobs’ in regional and urban Australia.¹³

Since 2001, 62 landfill gas power stations have been accredited under the Large-scale Renewable Energy Target, and the Clean Energy Regulator has accredited new landfill gas power stations every year. More than 6.9 million large-scale generation certificates, valued at approximately $250 million¹⁴, have been registered by landfill gas power stations.

The creation and sale of landfill gas large-scale generation certificates allows the power stations and their associated markets, such as local councils and landfill site operators, to offset operational costs.