Under the Renewable Energy Target, liable entities are required to
surrender certificates. If a liable entity does not surrender the right amount of certificates it may incur
The Clean Energy Regulator recommends that liable entities plan ahead to calculate their certificate liability and obtain certificates at least two weeks prior to a surrender deadline.
Reduced acquisitions are used to calculate the required amount of
large-scale generation certificates(LGCs) and
small-scale technology certificates (STCs) a liable entity has to surrender for the year or quarter.
A liable entity's reduced acquisitions are calculated based on relevant
acquisitions and networks exemption and
exemption certificates as outlined below.
For information about determining and calculating relevant acquisitions, see
acquisitions and networks exemption.
Large-scale Renewable Energy Target, liable entities must surrender LGCs annually through the REC Registry, when they lodge their energy acquisition statement.
LGC surplus may be created when a liable entity surrenders LGCs above the calculated LGC liability for a year. As shown above, a liable entity can use carried forward surplus to acquit their LGC liability or maintain a carried forward surplus for a future year. Liable entities cannot sell or transfer carried forward surplus to another liable entity, so it is recommended that liable entities do not create too much carried forward surplus that is unlikely to be used.
Carried forward shortfall occurs where a liable entity does not fully acquit its LGC liability, but surrenders more than 90 percent of the calculated LGC liability – refer to section 36 of the
Renewable Energy (Electricity) Act 2000 (the Act).
Small-scale Renewable Energy Scheme, a liable entity must surrender an amount of STCs each quarter. As the actual electricity acquisitions for the assessment year are not known in the first three quarters, an estimate is used to determine how many STCs must be surrendered for those quarters. In most cases, this amount is based on the previous year's reduced acquisitions lodged in the energy acquisition statement. In the fourth quarter, the actual reduced acquisitions for the assessment year are used to finalise STC liability for the year.
Liable entities calculate their STC liability for quarters one to three of the assessment year based on their estimated or actual reduced acquisitions, determined through one of the methods described below.
Once the estimated or actual reduced acquisitions are determined, liable entities can then calculate their STC liability for quarters one to three by using the calculations outlined below.
Liable entities can view their required surrender amounts and surrender STCs via their REC Registry account.
Liable entities calculate their annual STC liability for quarter four of the assessment year based on their reduced acquisitions and the factors outlined below - refer section 38AA and 38AE of the Act. Liable entities surrender STCs for quarter four with the lodgement of their annual energy acquisition statement and
STC shortfall statement through their REC Registry account.
Carried forward surplus may be created when a liable entity surrenders STCs above the required surrender amount for a quarter. Liable entities have the option to use carried forward surplus to acquit a future quarterly required surrender amount. Entities cannot sell or transfer surplus STCs to another entity.
Liable entities cannot carry forward a STC shortfall. If a STC shortfall occurs, the liable entity will be required to pay the non-refundable
small-scale technology shortfall charge.
Liable entities that did not lodge an energy acquisition statement before 1 April in the assessment year should apply to set a required surrender amount for quarters one to three of the assessment year under section 38AG of the Act. This could apply to a new liable entity or an existing liable entity that failed to lodge an energy acquisition statement or is a liable entity intermittently.
A company or individual is a liable entity if they make a relevant acquisition of electricity.
If you are a new liable entity complete the following steps:
If you are an intermittent liable entity complete the following steps:
If a liable entity fails to lodge an application, the agency will complete a default assessment of the required surrender amount for quarters one to three under section 38AH of the Act. A default assessment may result in STC shortfalls and small-scale technology shortfall charges, as well as interest charges.
Liable entities that lodged an energy acquisition statement for the previous year before 1 April in the assessment year may apply to the agency to vary their required surrender amount for the first three quarters of the assessment year. This would be necessary if the entity's reduced acquisitions in the assessment year were substantially different to the previous year's reduced acquisitions. A decrease in reduced acquisitions could be due to a variety of reasons including:
Liable entities should carefully consider their variation amount. If the assessment year's reduced acquisitions exceed the variation amount by more than 10 per cent, the assessment year's reduced acquisitions (amount lodged in the energy acquisition statement) will be used to recalculate the required surrender amounts for the first three quarters – refer to Section 38AF(7) of the Act. Contact the agency for techniques on mitigating the effects of exceeding the variation amount.
Liable entities may apply to vary a previous determination under section 38AF of the Act in an assessment year if their circumstances change. However, if a liable entity makes an application to vary a determination previously made under section 38AF, it will not give the liable entity the ability to surrender additional certificates for a previous quarter. Nor will it revive STCs previously surrendered pursuant to the previous determination. Such STCs will become a carried forward surplus that can be used to acquit future quarters.
Therefore, liable entities should carefully consider when STCs are surrendered if an application is lodged.
An application under subsection 38AF(1) of the Act or a variation to a previous determination application in relation to an assessment year must be made
before 1 October in the assessment year. If 30 September falls on a weekend or a public holiday, the application must be made before the end of the next business day.
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