The build trajectory in our model is one possible pathway to meet the target with adequate market health on the journey. A number of other potential trajectories can result in the 2020 target being met. The combination of technologies, investors, project proponents and electricity retailers will determine how the target is delivered.
Each year the model used to assess this trajectory is recalibrated, updated with the most recent data and analysis available relating to supply and demand, including the forecasts we commission for the renewable power percentage.
On the supply side, the inputs for our trajectory include the supply of existing large-scale generation certificates held by market participants, the modelled future supply of certificates from existing large-scale renewable energy power stations, and the future supply of certificates from the committed and probable projects we know about.
On the demand side, inputs include the total statutory demand under the Renewable Energy Target and additional demand from a range of contracts for voluntary surrender including Greenpower and desalination plants. See Spotlight...Extra demand for renewable energy certificates for more information.
Updating elements of supply and demand each year provides a clear indication of progress based on:
Additional generation required—we contrast existing supply against expected total demand to estimate how much additional generation is required each year to meet the annual target. Table 9 shows our assumptions for wind and solar construction as well as capacity factors to determine their contribution to future build.
Additional demand—demand for certificates from GreenPower and desalination contracts is assumed to remain steady until 2020. Demand associated with various ACT auctions is based on information published by the ACT Government.
Existing supply—existing supply between 2017 and 2020 incorporates actual and expected generation above baseline, and the capacity that has been committed in 2016. This includes assumptions addressing potential variability in generation from hydro and other renewable sources.
Based on these inputs the model generates residual capacity that is required to balance supply and demand and maintain a modest level of liquidity. In round terms a total commitment of 3000 megawatts in 2017 and 1000 megawatts in 2018—in addition to the 2016 committed and probable—would enable the 2020 target to be met.
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.