Under the Renewable Energy Target, liable entities are required to surrender
large-scale generation certificates and
small-scale technology certificates in proportion to their share of the liable electricity market.
The Clean Energy Regulator expects liable entities to comply with their obligations by fully acquitting their liability through the surrender of large-scale generation certificates and small-scale technology certificates.
Liable entities that do not fully meet their surrender obligations will be in shortfall. For large-scale generation certificates, liable entities may carry forward less than 10 per cent of their liability for a particular year without incurring a shortfall charge. In all other circumstances where a liable entity does not surrender sufficient certificates, a
non-tax deductible renewable energy shortfall charge of $65 per certificate not surrendered is applied.
Liable entities that acquit 90 per cent or less of their total large-scale generation certificate surrender liability for an assessment year, or acquit less than the required surrender amount of small-scale technology certificates for any quarter, will incur a renewable energy shortfall charge. A non-tax deductible renewable energy shortfall charge is applied to a liable entity’s shortfall at the rate of $65 per certificate not surrendered.
A list of liable entities that have incurred large-scale generation or small-scale technology shortfalls is published on the
Scheme compliance page.
Liable entities will incur further charges and may be subject to debt recovery action if they do not pay a renewable energy shortfall charge by the due date.
While every effort should be made to obtain sufficient large-scale generation certificates to meet liability each year, the carry forward rule allows a liable entity to carry forward
up to (but not including) 10 per cent of its required large-scale renewable energy for a particular year. An entity’s ‘required large-scale renewable energy’ for a year is:
(the total amount of its relevant acquisitions for the year - acquisitions covered by exemption) x the renewable power percentage + any carried forward shortfall – any carried forward surplus
Any shortfall that is less than 10 per cent of a liable entity’s required large-scale renewable energy is added to its liability for the following year. The large-scale generation shortfall charge
does not apply in these circumstances. Carried forward shortfalls can accumulate over multiple assessment years, but once a liable entity has a large-scale generation certificate shortfall of 10 per cent or more of their total required large-scale renewable energy for an assessment year, the shortfall charge becomes payable.
In these circumstances, even though a large-scale generation shortfall charge is not applied, the liable entity is still in shortfall and the amount of shortfall in certificates and percentage of liability is published on the
Scheme compliance page.
Where a liable entity has paid a large-scale generation shortfall charge, it can utilise the refund provisions in certain circumstances.
Further details on the operation of the refund provisions is available at the
refunds of large-scale generation shortfall charges page.
small-scale technology certificate scheme, liable entities have quarterly surrender obligations. Liable entities that do not fully meet their small-scale technology required surrender amount for any quarter will have a small-scale technology shortfall in relation to that year.
The small-scale technology shortfall charge is $65 x the amount of small-scale technology certificates not surrendered for each quarter of the year.
The carry forward rule and refund provisions outlined above in relation to large-scale generation shortfall and shortfall charges are not available for small-scale technology certificate shortfall charges.
Invoices for small-scale technology shortfall charges are available in the
Shortfall charges for an assessment year become payable by a liable entity:
Liable entities will be refunded any shortfall charge paid that has been subsequently reduced by an amendment to an assessment, for example, to revise the liable entity’s reduced acquisitions for an assessment year. The amount to be refunded will be paid to the liable entity or applied to any existing liability of the liable entity to the Commonwealth. The amount of refund includes the shortfall charge and any associated penalty or interest charges.
Penalty charge becomes due and payable on the day specified by the Clean Energy Regulator in the notice of assessment for the charge given to the liable entity.
In certain circumstances, the Clean Energy Regulator may remit all or part of a penalty charge.
Penalty interest is charged on the whole of any amount that an entity is liable to pay that is not paid by the time it is due. This means that interest is automatically charged on any large-scale generation shortfall charge, small-scale technology shortfall charge or penalty charge that is not paid by a liable entity by the due date for the charge. Interest continues to be charged until the whole of the principal amount owing and any interest charged is paid.
Interest is calculated daily by multiplying the unpaid amount by the
general interest charge rate for the day (calculated under section 8AAD of the Taxation Administration Act 1953 and set out on the Australian Taxation Office’s
Interest charges may be incurred or refunded when assessments are amended. Any interest charges incurred or refunds payable are calculated through the REC Registry. The Clean Energy Regulator will refund amounts to the liable entity’s nominated bank account.
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