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How it works

The schemes

The Renewable Energy Target is a government initiative designed to increase the overall amount of Australia's electricity generated from renewable sources. It does this through two schemes:

  • the Large-scale Renewable Energy Target, which encourages new investment in large-scale renewable energy such as solar farms, wind farms, hydro-electric and waste power stations, and
  • the Small-scale Renewable Energy Scheme, which encourages small-scale renewable energy system installations, such as household solar panels and solar water heaters.
How are we tracking?

Since the Renewable Energy Target was established in 2001:

  • 482 renewable power stations have been accredited—capable of generating more than 16.7 million megawatt hours10 of electricity a year, and
  • 2.5 million small-scale systems have been installed—capable of generating or displacing around 8.9 million megawatt hours of electricity a year.

The 2020 target

Around one-third of Australia's greenhouse gas emissions are related to electricity generation.11 The Renewable Energy Target recognises the important role of renewable energy in reducing emissions in this sector.

The Large-scale Renewable Energy Target is for 33 million megawatt hours of additional renewable electricity to come from renewable sources by 2020, delivered through renewable power stations.

Additional electricity will come from the installation of small-scale systems.

Legislation

The Renewable Energy Target is underpinned by the:

  • Renewable Energy (Electricity) Act 2000, which sets out the aims of the scheme including the annual targets, creates liabilities, provides for registration of persons and accreditation of renewable power stations, and establishes the market for renewable energy certificates
  • Renewable Energy (Electricity) Amendment Act 2015, which changed the 2020 target from 41 million megawatt hours to 33 million megawatt hours, and increased the exemption for emissions-intensive trade-exposed industries to 100 per cent
  • Renewable Energy (Electricity) (Large-scale Generation Shortfall Charge) Act 2000, which provides the rate of charge for the applicable renewable energy shortfall charge for the Large-scale Renewable Energy Target
  • Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010, which provides the rate of charge for the applicable renewable energy shortfall charge for the Small-scale Renewable Energy Scheme, and
  • Renewable Energy (Electricity) Regulations 2001, which provide details on issues including eligibility criteria for renewable energy sources, set the rate of liability and therefore demand for certificates, and provide criteria for accreditation of renewable power stations and eligibility requirements for small-scale systems.
How are we tracking?

In 2015:

  • 15.2 million megawatt hours were generated from large-scale renewable sources
  • 8.9 million megawatt hours were generated or displaced from small-scale renewable systems, and
  • 12 different ecologically sustainable sources of renewable electricity were used.

Objectives

The objectives of the Renewable Energy (Electricity) Act 2000 are to:

  • encourage additional generation of electricity from renewable sources
  • reduce emissions of greenhouse gases in the electricity sector, and
  • ensure that renewable energy sources are ecologically sustainable.

Photo acknowledgement: Clean Energy Regulator, Alice Springs NT 

Photo acknowledgement: Clean Energy Regulator, Alice Springs NT

Footnotes

10 The estimation of megawatt hours of renewable electricity considers variable such as capacity factors for each renewable energy technology and other factors that may affect capacity to generate electricity.

11 Electricity generation emissions projections 2014–15, Department of the Environment.

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