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Liable entities

14 September 2018
RET​ ​

The Renewable Energy Target creates demand for renewable energy by requiring liable entities to surrender an amount of renewable energy certificates in proportion to the electricity they acquire in an assessment year. This is referred to as liability.

What is a liable entity?

Liable entities are classified as an individual or company who make relevant acquisitions of electricity on a grid which has an installed capacity of 100 megawatts or more. They are usually electricity retailers.

Acquitting liability

To acquit liability each year, liable entities must surrender an amount of both large-scale generation certificates (LGCs) and small-scale technology certificates (STCs) and lodge an energy acquisition statement.

Certificate liability is determined by applying percentages (the renewable power percentage for LGCs and the small-scale technology percentage for STCs) to a liable entity's electricity acquisitions for that year. Liable entities acquit their liability by surrendering the required number of certificates to the Clean Energy Regulator for:

If a liable entity does not surrender the correct amount of certificates, it may be required to pay a shortfall charge. There are some instances where acquisitions are exempt from liability.

Liable entities should refer to the calculating certificate liability page for the steps they need to take. This is particularly important for new liable entities that:

  • did not lodge an energy acquisition statement for the previous year, and
  • have made their first acquisition of electricity.

Anyone unsure about their obligations should contact us.

Exemption fro​m liability

Companies that conduct eligible emissions-intensive trade exposed (EITE) activities are issued with exemption certificates which they can trade with their electricity retailer. This reduces the certificate liability that a liable entity has for an assessment year.

EITE activities are specified in the Renewable Energy (Electricity) Regulations 2001. They include aluminium smelting, zinc smelting, petroleum refining and newsprint manufacturing. A complete list of EITE activities is available on our website.

There are other circumstances that result in exemption from liability, which need to be taken into account by liable entities when reporting their acquisitions and calculating liability. These include:

  • acquisitions on networks that are less than 100 MW capacity, and
  • acquisitions that meet the 'self-generation' or 'direct line' exemption rules.​

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