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Large-scale generation certificate eligibility formula

31 October 2016

Under the Large-scale Renewable Energy Target, the large-scale generation certificate (LGC) eligibility formula is used to determine the amount of generated electricity eligible for large-scale generation certificates.

Each whole megawatt hour of eligible electricity generated above the ​power stations baseline is entitled to one lar​ge-scale generation certificate.

The large-scale generation certificate eligibility formula is:

TLEG – [(FSL + AUX) + DLEG x (1 – MLF)]

TLEG is the total amount of electricity, in megawatt hours (MWh), generated by the power station in the calendar year—measured at all generator terminals.

FSL is the total amount of electricity in MWh generated by the power station comprised of ineligible energy sources, such as fossil fuels. FSL will only apply to power stations that use a combination of fossil fuels and renewable energy sources to generate electricity. Where a mixture of renewable and fossil fuels is used, the fossil fuel component must be netted from the generation output, as it is not eligible for large-scale generation certificates.

AUX, or auxiliary loss is the electricity used in the process of generating electricity, and electricity used in the operation and maintenance of all components of the power station. Auxiliary loss is not eligible for large-scale generation certificates.

When available, metered data should be used to calculate auxiliary loss, and when metered data is not available, a proportion of the total output (which has been identified and agreed with the Clean Energy Regulator in advance) may be used.

DLEG is the net eligible electricity generated and exported to a distribution network, transmission network or a point of use.

MLF, or marginal loss factor, is applied to the amount of exported electricity to allow for electricity losses in transmission networks.

MLF is calculated for each power station by the Australian Energy Market Operator in the National Electricity Market (NEM) regions. Power stations not located in a NEM region should contact their State or Territory government for this information.

Note: if all of the electricity generated by a Renewable Energy Target power station is used within the power station and/or the local distribution network, the MLF value is taken to be 1.

When metered data of sufficient quality (refer to regulation 4 of the Renewable Energy (Electricity) Regulations 2001) is submitted to Clean Energy Regulator, large-scale generation certificates can be created for renewable electricity generation. In cases when meter quality is not of a sufficient standard, the number of large-scale generation certificates a power station is entitled to create may be reduced—to ensure that there are none created for ineligible electricity.


A Renewable Energy Target power station with a 'nil', or 0 megawatt hours (MWh) baseline generates 100 MWh of electricity. Of the 100 MWh generated:

  • 45 MWh are used internally to power machinery to manufacture product
  • 5 MWh are used within the power station to generate renewable electricity, and therefore are considered auxiliaries
  • 50 MWh are dispatched to national electricity grid, and
  • 5 MWh are lost in transmission—this means the MLF will be 0.9, representing a 10% loss factor.

Using the formula:

100 MWh – 0 – 5 MWh – [50 MWh x (1 – 0.9)]

= 95 MWh – 5MWh

= 90 MWh

As one large-scale generation certificate is equal to 1 MWh, this power station can create 90 large-scale generation certificates.

Tools and resources for calculating eligible electricity

The Clean Energy Regulator has created the following tools and resources to calculate eligible electricity entitled to large-scale generation certificates:

Municipal solid waste

A formula for determining the eligible renewable components of municipal and commercial wastes for use by electricity generation plants that use waste as a fuel source.

Co-firing renewable fuels with coal

A formula to calculate electrical output, in megawatt hours from a renewable energy source when co-fired with coal.

Wood waste guide and assessment sheets

A series of guides and assessment sheets to build and keep appropriate record sets to demonstrate the eligibility of wood waste as part of the accreditation process.

Read more information on wood waste guide and assessment sheets.  

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