What is this?
The Large-scale Renewable Energy Target creates a financial incentive for new generation of renewable electricity, and is designed to deliver 33 000 gigawatt hours of additional electricity from renewable energy sources in 2020. This target will be met when 33 million large-scale generation certificates are surrendered in addition to any large-scale generation certificates that are voluntarily surrendered in that year.
As we approach 2020, the quantity, capacity and expected generation of power stations committed and accredited under the Renewable Energy Target will become increasingly important factors in the operation of the renewable energy certificate market, and our ability to achieve the target.
A project is considered 'committed' when it has received all development approvals and a final investment decision within the normal commercial understanding of that term.
In 2015, 15.2 million megawatt hours of electricity was generated from Renewable Energy power stations. To ensure sufficient generation in 2020, the amount of generation from renewables will need to more than double on 2015 figures.
The Clean Energy Regulator estimates that the majority of new renewable energy build must be committed in the next two years to ensure sufficient time for build to generate by 2020, and to mitigate certificate shortfall in the market in future years. There is currently over 9000 megawatt capacity of large-scale renewable energy projects with planning approval—which if built, is more than sufficient to meet the 2020 target. However, financing will be the key determinant of the pace of future construction.
For more information about performance to date, see the
2015 Renewable Energy Target Annual Statement.
In September 2016, EY released
Meeting the Renewable Energy Target: Innovative approaches to financing renewables in Australia, which assesses the current market conditions for investment in large-scale renewable energy projects in Australia.
The report was commissioned by the Clean Energy Regulator and presents an analysis of the existing constraints to financing large-scale renewable energy projects in Australia, and highlights innovative financial structures and instruments which may assist projects to achieve financial close.
documentasset:EY report-Meeting the Renewable Energy Target 2016
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.