Renewable energy has an important role to play in reducing Australia's greenhouse gas emissions and reaching the goal of 20 per cent renewable energy by 2020.
Known previously as the Mandatory Renewable Energy Target, the Renewable Energy Target has been in operation since 2001, with the initial aim to source two per cent of the nation's electricity generation from renewable sources. In 2009, this was increased to ensure renewable energy made up the equivalent of 20 per cent of Australia's electricity (41 000 GWh).
In January 2011 the Renewable Energy Target was split into two parts:
- The Large-scale Renewable Energy Target — this scheme creates a financial incentive to establish and expand renewable power stations such as solar farms, wind farms and hydro-electric power stations and deliver the majority of the 2020 target.
- The Small-scale Renewable Energy Scheme — this scheme creates a financial incentive to install solar panels, wind, hydro systems, solar water heaters and air source heat pumps.
In June 2015, the Australian Parliament passed the Renewable Energy (Electricity) Amendment Bill 2015. As part of the amendment bill, the Large-scale Renewable Energy Target was reduced from
41 000 GWh to 33 000 GWh in 2020 with interim and post-2020 targets adjusted accordingly.
Since its beginning in 2001, the Renewable Energy Target has increased the number of installations of small-scale renewable energy systems, and successfully stimulated investment in renewable energy power stations.