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Our role in the market

Our role in the market

We manage the Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme as part of our purpose of accelerating carbon abatement for Australia.

Specifically, we:

  • advise the Minister for the Environment about the amount of certificates liable entities must buy and surrender each year, determined through the:
    • small-scale technology percentage—for small-scale technology certificates under the Small-scale Renewable Energy Scheme, and
    • renewable power percentage—for large-scale generation certificates under the Large-scale Renewable Energy Target
  • issue exemption certificates for emissions-intensive trade-exposed activities
  • provide the secure online system that enables the market to operate
  • register market participants, and
  • oversee the operation of the market to ensure its integrity.

Exemption certificates

We issue exemption certificates for certain emissions-intensive trade-exposed activities. Each exemption certificate states the amount of electricity that is exempt from liability under the Renewable Energy Target. These certificates can then be transferred to the liable entity named on the certificate. That liable entity can use the certificate to reduce their liable acquisitions by the same amount.

Secure system

We provide the secure online REC Registry. Buyers and sellers use the REC Registry for all Renewable Energy Target transactions including creating, registering, selling, trading and surrendering certificates.

We also use the REC Registry to assess new account applications, validate certificates and report on certificate activity.

Public registers are also available through the REC Registry. They include information about the Renewable Energy Target, such as certificate data for analysts.

Market participants

To create certificates, individuals and companies must apply to become a 'registered person' or 'registered agent'. Registered persons can create large-scale generation certificates from renewable power stations (see the Large-scale Renewable Energy Target page for details). Registered agents create the majority of small-scale technology certificates and have the ability to create certificates assigned to them from system owners.

During 2015 we approved 159 registered persons, bringing the total to 7 585, and 72 registered agents, bringing the total to 1 575.

Operation of the market

We oversee both supply and demand to ensure the efficiency and integrity of the market. This involves:

  • validating certificates—scheme participants creating certificates must provide thorough supporting documentation before we validate certificates
  • engaging with clients and stakeholders—we work with a wide range of stakeholders and clients to communicate regulations, policy and procedures, provide information to facilitate market participation and educate liable entities about their obligations and how to comply
  • undertaking compliance activities—we monitor and enforce compliance if necessary, including working with other regulators and law enforcement bodies, and carrying out inspections of small-scale systems (see the Inspections of small-scale systems page), investigations into possible breaches of the Renewable Energy (Electricity) Act 2000 (see the Investigations page), and monitoring inspections of renewable power stations (see the Renewable power station monitoring inspections page), and
  • market monitoring and reporting—we track and report on key market trends. Further information about market trends is included in the Progress toward the Large-scale Renewable Energy Target (see the Progress toward the Large-scale Renewable Energy Target page).

We do not oversee certificate transfer or payment arrangements (buyers and sellers negotiate this directly) or regulate certificate prices (this is market-driven, determined by factors including supply and demand).

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