Additional generation of electricity from renewable sources

The Renewable Energy Target assists the energy sector to meet the Australian Government’s commitment to the delivery of at least 20 per cent of Australia’s electricity supply from renewable sources by 2020.

The number of renewable energy power stations accredited under the Large-scale Renewable Energy Target has increased each year since 2001. As at 31 December 2013 there were 394 accredited power stations. The growth in the number of accredited power stations since the scheme commenced is illustrated in Graph 1.

Graph 1: Growth in the number of accredited renewable energy power stations since 2001

See following table for graph data

Power stations may generate electricity from multiple sources. The Clean Energy Regulator categorises accredited power stations according to the renewable energy source used to create the majority of large-scale generation certificates for that power station. The 394 accredited power stations fall into 10 categories and include 101 hydro, 78 wind, 68 solar, and 62 landfill gas power stations, while the remaining 85 use other renewable energy sources. Details are shown in Table 4 in Chapter 3.

The current capacity of accredited renewable energy power stations is approximately 18,600 megawatts. These power stations are able to generate around 16,000 gigawatt hours of renewable electricity in a typical year. This approximate annual generating capacity takes into consideration a number of variables, such as rainfall in catchments that feed into hydro power station storage dams and other weather events that may impact generating capacity.

To meet the annual targets specified in the Act, the supply of renewable electricity generated by accredited power stations is required to increase in line with the legislated demand imposed upon liable entities. The determination of annual targets is explained in Chapter 3.

Graph 2 shows large-scale renewable electricity generation increasing since the commencement of the schemes. The level of supply is the actual amount of renewable electricity generated above accredited power stations’ baselines. Baselines are discussed in Chapter 3.

Graph 2: Supply of large-scale renewable electricity generation, 2001 to 2013

Note: Data for 2013 is an estimate. Date for earlier years is actual.

Under the Small-scale Renewable Energy Scheme, there are over two million small-scale installations in Australia. Graph 3 illustrates the growth in small-scale installations since 2001.

Graph 3: Growth in the number of valid small-scale installations since 2001

Sugar cain harvesters with birds in the foreground

Case study: Powering industry with sugar mill residue

Each year, around 4,400 Australian farms supply an average of 31 million tonnes of sugar cane to 24 sugar mills.¹ Sugar cane is crushed to produce raw sugar, and bagasse, the fibrous residue of the milling process, is used as a fuel to produce steam for electricity generation. Sugar mills use the electricity to power their operations and supply the surplus to the electricity grid.

Bagasse is an ecologically sustainable energy source. All of the 24 sugar mills currently operating in Australia have been accredited as power stations under the Renewable Energy Target. This means they can create large-scale generation certificates for the electricity produced from bagasse. Certificates can be sold in the renewable energy certificate market, providing a financial benefit to sugar mills.

Since the commencement of the Renewable Energy Target, sugar mill power stations have registered 6.3 million large-scale generation certificates for renewable electricity produced from bagasse, with an estimated value of over $225 million.² That represents approximately 8 per cent of the additional renewable electricity generated since 2001. More than 955,000 certificates were registered in 2013.

Cane growing and sugar production are important industries in many regional communities in Queensland and New South Wales. By enabling sugar mills to participate in the renewable energy certificate market, the Renewable Energy Target contributes to the financial viability of the sugar industry.

The estimated generation and displacement capacities of small-scale system installations have increased steadily since the commencement of the Renewable Energy Target in 2001. ‘Displacement’ refers to the estimated reduction in demand for electricity from the grid that results from the installation of a solar water heater (a solar hot water system or an air source heat pump). Graph 4 illustrates the estimated increases in the two main contributors to overall small-scale capacity: generation from small-scale solar panel systems and displacement from solar water heaters.

Graph 4: Estimated generation by small-scale solar panel systems and displacement of otherwise required generation by solar hot water systems and air source heat pumps, 2001 to 2013

Generation from small-scale solar panel systems has increased significantly since 2009. The Clean Energy Regulator estimates that small-scale solar panel systems contributed 1,283 gigawatt hours of renewable electricity generation in 2011, 2,570 gigawatt hours in 2012, and 3,766 gigawatt hours in 2013. The 2020 target for small-scale generation is 4,000 gigawatt hours.

In total, small-scale installations have the capacity to generate or displace approximately 6,882 gigawatt hours of electricity annually. Of this, approximately 4,182 gigawatt hours is generated from small generation units (small-scale solar, wind or hydro installations), and a further 2,700 gigawatt hours of otherwise required generation is displaced by solar water heaters.