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A way to reduce emissions from the electricity sector

Before considering how the Renewable Energy Target has operated in 2016, it is important to understand why Australia has a target, how it works and our role as scheme administrator.

A way to reduce emissions from the electricity sector

About one-third of Australia's greenhouse gas emissions are a result of using electricity to power homes and businesses12.

Almost 83 per cent of Australia's electricity comes from burning coal and gas13. The rest comes from other sources, including renewables such as wind, hydroelectric (hydro) and solar. Australia has used clean sources of energy for many decades, particularly hydro.

The Renewable Energy Target was introduced in 2001 as an incentive to further increase the amount of electricity generated from ecologically sustainable renewable sources (renewable source electricity). It is one of a number of policies that contribute to Australia's emissions reduction target.

The Large-scale Renewable Energy Target is to generate an additional 33 000 gigawatt hours of electricity from renewable sources in 2020, compared with 1997 levels14. This will be enough to power around five million houses per year15.

In 2011, the single scheme was split into two: the Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme. This creates stronger incentives for large-scale renewable energy, while still providing support for householders and businesses to install small-scale systems.

The Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme are set in law, through the Renewable Energy (Electricity) Act 2000 (see Appendix B: Relevant legislation).

The objectives of the Renewable Energy (Electricity) Act 2000 are to encourage additional generation of electricity from renewable sources, reduce emissions of greenhouse gases from the electricity sector and ensure that renewable energy sources are ecologically sustainable.

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