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Chair's foreword

Chair's foreword

The Renewable Energy Target administrative report for 2017 documents a big year for renewable energy in Australia.

Key deliverables are outlined in the graphic on Significant outcomes.

More than 2000 megawatts of additional renewable energy capacity was installed in 2017, across both the Small-scale Renewable Energy Scheme (1052 megawatts) and Large-scale Renewable Energy Target (1088 megawatts). This is more new capacity than any prior year.

We expect 2018 to be twice as big and that new capacity will provide extra supply of electricity, which should put downward pressure on electricity prices. Investment in large-scale solar has grown significantly and trends, like single-axis tracking and pairing with energy storage, are enabling power to be delivered when demand for electricity is high.

The transformation of energy systems that we are seeing in Australia is part of a global phenomenon of increased penetration of renewable generation into the electricity system.

Investment trends

In 2017, there was more than $AUD10 billion1 invested in large-scale renewable energy in Australia.

The surge in investment in 2017 that has continued in early 2018 means there will be enough new capacity to meet, and likely exceed, the 2020 Large-scale Renewable Energy Target of 33,000 gigawatt hours.

By the end of March 2018, more than 7500 megawatts of projects were operating or firmly announced. This pipeline of projects is 1100 megawatts more than required to meet the target. As of the publication of this report there is sufficient capacity built or being built to meet the target by 2020.

The recent expansion of utility scale solar has driven a remarkable shift in the make-up of the large-scale renewable energy market. In the first 15 years of the Renewable Energy Target, solar accounted for only four per cent of accredited capacity under the Large-scale Renewable Energy Target. Solar now makes up 46 per cent of the new large-scale build capacity announced since 1 January 2016. This is good news for the stability of the electricity grid as large-scale solar usually generates at its highest capacity during hot, sunny days when electricity demand can be high.

Businesses are also responding to rising energy costs and declining technology costs by investing in commercial and industrial sized solar systems in the Large-scale Renewable Energy Target. Systems in the 100 kilowatts to one megawatt range increased by 29 per cent from 2016.

The capacity of these systems increased by 66 per cent. Large-scale energy users are also starting to supply their own energy through renewables. One example is the construction of the 126.5 megawatt solar farm at Sun Metals Zinc Refinery in North Queensland.

This past year has seen the large-scale renewables industry respond to the need for greater system reliability. The roll out of large-scale batteries, integrating wind and solar on the same site, single-axis tracking solar technology and innovations in frequency control by wind farms means generation from the current renewables build will be less variable than previously observed. It is also increasingly able to provide frequency control and other system support services.

This year also saw a big increase in investment in the Small-scale Renewable Energy Scheme, with 41 per cent more capacity installed by households and businesses compared with previous year. The growth resulted from both more systems installed and the size of systems increasing. In 2012, the last time there was comparable installed capacity, the average system size was three kilowatts. This year, the average system size has increased to more than six kilowatts.

We do expect the growth in small-scale investment to continue in 2018, however, small-scale solar is a consumer-driven market so such predictions are inherently uncertain.

While not incentivised under the Renewable Energy Target, there has also been an increase in the number of batteries reported to have been installed with solar systems by households and businesses.

Innovation in regulation

Working with an evolving sector, it is important for us to ensure our regulatory practices and systems continue to adapt and keep pace with industry. In 2017, we focused on innovation and collaboration, and improved our compliance monitoring and regulatory approaches.

To support our agency’s small-scale technology certificate processing, we partnered with the Australian Energy Market Operator to run algorithms over their data to verify whether a system has been installed (see Market integrity). A major innovation has been to work with industry to solve the shared problem of some substandard solar panels in the Australian market without needing more intensive regulation (see Market integrity). In collaboration with registered agents, we co-designed a competency and capability framework to be rolled out in 2018.

As we expect a significant increase in the volume of power station accreditations and large-scale generation certificate creations, we have begun a project to streamline application and validation processes. This will make it easier for our clients to apply for and receive their certificates in a more timely manner.

In line with advances in technology, we have reviewed our regulatory posture in applying legislation relating to Renewable Energy Target liability for grid-scale storage devices, including pumped hydro and chemical storage. This has improved the economics of investing in this technology and better aligns with the technical characteristics of storage.

This will be important for reliability as we see higher penetration of renewable electricity.

We published updated guidance for participants on our website.

Looking forward

The 2020 Large-scale Renewable Energy Target is in sight. We congratulate the industry and participants for their tenacity to get to this position. Recently, we have seen some softening in the large-scale generation certificate spot prices and this trend is likely to continue as more capacity comes online. We will be keeping the market informed as key build milestones are passed. We will also continue to focus on innovative ways to ensure compliance in line with our legislation.


  1. Source: Clean Energy Council

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