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Large-scale generation certificate general formula

18 October 2018
RET

Contents

Under the Large-scale Renewable Energy Target, the general formula, set out in Regulation 14 of the Renewable Energy (Electricity​) Regulations 2001 (REE Regulations), is used to work out the amount of eligible electricity generated by an accredited power station. It applies continuously over each calendar year from the date a power station is accredited.

One large-scale generation certificate may be created for each megawatt hour (MWh) of eligible renewable electricity generated by an accredited power station above its 1997 eligible renewable power baseline.

The general formula is:​

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

Learn more about the terms used in this formula​. See the Guide to adding power station generation data in the REC Registry for more information.

Definitions of the terms used in the general formula

TLEG​

TLEG is the total amount of electricity, in MWh, generated by the power station in the year, as measured at all generator terminals.

FSL

FSL is the total amount (if any) of electricity, in MWh, generated by the power station in the year using ineligible energy sources, such as fossil fuels. It may be worked out by converting the energy content of those energy sources into the equivalent MWh of electricity.

FSL may apply to power stations that use:

  • a mixture of fossil fuel and renewable energy sources in generating electricity – where this occurs, the fossil fuel component must be netted from the generation output, as it is not eligible for large-scale generation certificates, and
  • fossil fuel as an energy source for auxiliary electricity used in the operation of the power station.

​​​AUX

AUX, or auxiliary loss is the electricity, in MWh, used in the process of generating electricity, and electricity used in the operation and maintenance of all components of the power station for the year.

Auxiliary loss may be apportioned between eligible and ineligible energy sources if some of the electricity generated by the power station in the year was generated using ineligible energy sources. Regulation 16 of the REE Regulations contains further information in relation to working out the apportionment.

DLEG

DLEG is the amount of electricity, in MWh, transmitted or distributed by the power station in the year, measured:

  • if the power station is part of the national electricity market – at the point determined under the National Electricity Rules, or​
  • in any other case – at the point determined by an authority of the state or territory where the power station is.​

Additional information about DLEG 

Chapter 7 of the National Electricity Rules set out how electricity is measured by the metering installation at the connection point. The metering installation must be located as close as practical to the connection point.

MLF

The MLF is the marginal loss factor, to allow for electricity losses in transmission networks, as determined by:

  • if the power station is part of the national electricity market – the Australian Energy Market Operator (AEMO), or
  • in any other case – an authority of the state or territory where the power station is.

Additional information about MLF

If all the electricity generated by the accredited power station is used in the power station, or in the local distribution network, or in both the power station and the local distribution network, the MLF is taken to be one (1).

AEMO registers generators, those with a generating system connected to a transmission or distribution system, unless an exemption applies.

The Clean Energy Regulator applies generator MLFs calculated by AEMO, and equivalents calculated by other market operators, to electricity dispatched by market generators operated by accredited power stations.

Some registered generators may be classified as a non-market generators by AEMO. AEMO does not calculate an MLF in respect of these generators, in which case the Clean Energy Regulator applies the default MLF stated above of one (1) in determining their eligible electricity amount.

The National Electricity Rules set out the conditions under which a generating unit is classified as a non-market generating unit. Clause 2.2.5(a) stipulates that a generating unit whose sent-out generation is purchased in its entirety by the local retailer or by a customer located at the same connection point must be classified as a non-market generating unit.

There may be equivalents to MLFs in non-National Electricity Market jurisdictions. Loss factors apply to electricity supplied through the Wholesale Electricity Market (WEM) to the South West Interconnected System in Western Australia. The Clean Energy Regulator applies those loss factors as MLF in the general formula.

Example using the general formula

An accredited power station generates 100 MWh of electricity and has an MLF of 0.9. Of the 100 MWh generated:

  • 45 MWh are used internally to power machinery to manufacture products
  • 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 – due to the MLF of 0.9.

Using the formula:

TLEG – [(FSL + AUX) + DLEG x (1 – MLF)]
= 100 MWh –​ [(0 + 5 MWh) + 50 MWh x (1 – 0.9)]
= 100 MWh – [5 MWh + 50 MWh x 0.1]
= 100 MWh – [5 MWh + 5 MWh]
= 100 MWh – 10 MWh
= 90 MWh

If this power station has a 'nil', or 0 MWh baseline, this power station can create 90 large-scale generation certificates.

Similarly, a power station operating in the manner but having a baseline of 27 MWh, could create 63 large-scale generation certificates.​

Notes about​ rounding when calculating eligible electricity

A concession is made under section 18 of the Renewable Energy (Electricity) Act 2000 that allows for one LGC to be created for eligible electricity generation between 0.5 MWh and 1 MWh during a year.

If the amount calculated during a year using the general formula exceeds 1 MWh and results in an amount that is not a whole MWh, the amount must be rounded down to the nearest MWh​.

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