To meet their compliance obligations under the Renewable Energy Target,
liable entities must surrender the required amount of certificates as determined by the
renewable power percentage and
small-scale technology percentage. Failure to surrender the right amount of certificates may result in renewable energy shortfall charges, including interest and penalty charges.
The Clean Energy Regulator recommends that liable entities purchase certificates at least two weeks prior to a surrender deadline to allow for processing time, especially if the liable entity wishes to purchase small-scale technology certificates (STCs) from the STC clearing house.
Liable entities must surrender large-scale generation certificates (LGCs) annually. They do this at the same time that they lodge their
energy acquisition statement and large-scale generation shortfall statement. This must be done by 14 February each year via their
REC Registry account.
To calculate large-scale generation certificate liability, entities must:
Liable entities may generate a surplus if they surrender LGCs above the calculated annual LGC liability. As shown below, liable entities have the option to carry forward any generated surplus to meet future large-scale generation certificate liability, or maintain and carry forward surplus for a future year. Surpluses cannot be sold of transferred to another liable entity, so it is important to ensure liable entities do not create too much carried forward surplus which can't be used.
Carried forward shortfalls occur where a liable entity does not fully meet their LGC liability but surrenders more than 90 per cent of the calculated LGC liability (refer to section 36 of the
Renewable Energy (Electricity) Act 2000).
Under the Small-scale Renewable Energy Scheme, a liable entity must surrender a set percentage of small-scale technology certificates (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. This amount is based off the previous year's reduced acquisitions lodged in the energy acquisition statement.
The final required amount for STC surrender is finalised in the fourth quarter when actual liable electricity acquisitions are reported.
Step 1: Determine the estimated or actual electricity acquisitions through using one of the following methods.
Step 2: Use the estimated or actual electricity acquisitions determined in Step 1 to calculate the quarterly required surrender amount.
Liable entities calculate their STC liabilities for quarters one to three of the assessment year by:
Liable entities cannot carry forward a STC shortfall. If a STC shortfall occurs, liable entities will be required to pay the small-scale technology shortfall charge, which is set at $65.00 per STC not surrendered.
Sections 38AA and 38AE of the
Renewable Energy (Electricity) Act 2000 set out how to calculate your STC liabilities for each quarter.
Liable entities surrender STCs for quarter four with the energy acquisition statement and small-scale technology shortfall statement through their REC Registry account.
Liable entities calculate their annual STC liability for quarter four for the assessment year based on their reduced acquisitions:
Surpluses may be carried forward when a liable entity surrenders STCs above the required surrender amount for the assessment quarter. As shown above, you have the option to use the surplus to acquit the quarter or create a surplus for a future quarter. You cannot sell surplus STCs to another entity.
You cannot carry forward a STC shortfall, if a STC shortfall occurs you will be required to pay the small-scale technology shortfall charge set at $65.00 per STC not surrendered.
Liable entities can calculate the amount of electricity acquired for all relevant acquisitions at the:
In most cases, liable entities calculate the amount worked out on the basis of metering data used for AEMO or AEMO WA settlement statements, where the electricity is acquired from AEMO or AEMO WA.
In other circumstances, the amount of acquired electricity is worked out by a method of calculation chosen by the Clean Energy Regulator after consultation with the liable entity, such as:
Acquisition of electricity may be exempt from liability purposes (that is, it is not a 'relevant acquisition') if:
Under the Renewable Energy Target, companies that conduct emissions-intensive trade-exposed activities may be eligible to
apply for exemption.
Activities eligible for exemption include but are not limited to production of glass containers and bulk flat glass, integrated production of lead and zinc, manufacture of newsprint and carton board and petroleum refining.
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