Contents

• Calculating large-scale generation certificate liability (LGC)
• Calculating small-scale technology certificate liability (STC)
• Calculating STC liability for quarters one to 3
• Calculating STC liability for quarter 4
  
• Renewable power percentage
  
• Small-scale technology percentage
  

Under the Renewable Energy Target (RET), liable entities are required to surrender certificates.

The liable entities’ reduced acquisitions are used to calculate the required surrender amount of large-scale generation certificates (LGCs) and small-scale technology certificates (STCs).

If a liable entity does not surrender the required number of certificates it may incur shortfall charges.

The Clean Energy Regulator (the agency) recommends that liable entities plan ahead to calculate their certificate liability and obtain certificates at least 2 weeks prior to a surrender deadline.

Calculating large-scale generation certificate liability

Under the Large-scale Renewable Energy Target, liable entities must surrender LGCs annually through the REC Registry. This is completed at the same time they lodge their energy acquisition statement.

LGC liability is automatically calculated in the energy acquisition statement on the REC Registry. A liable entity can manually calculate their LGC liability by multiplying their reduced acquisitions by the renewable power percentage, then including any carried forward surplus or carried forward shortfall from the previous year.

Calculating small-scale technology certificate liability

Under the Small-scale Renewable Energy Scheme, liable entities must surrender an amount of STCs each quarter.

An estimate is used to calculate the required surrender amount for the first 3 quarters of the assessment year. In most cases, the estimate is based on the previous year’s reduced acquisitions lodged in the energy acquisition statement.

In the fourth quarter, the reduced acquisitions for the current assessment year are used to finalise STC liability for the year.

A STC carried forward surplus can be created when a liable entity surrenders more STCs than the calculated STC liability for a quarter. The carried forward surplus will then acquit a portion of the STC liability in the following quarter.

Entities cannot sell or transfer surplus STCs to another entity.

Liable entities cannot carry forward a STC shortfall. If a STC shortfall occurs, the liable entity will be required to pay the non-refundable small-scale technology shortfall charge.

Calculating STC liability for quarters one to 3

Liable entities calculate their STC liability for quarters one to 3 of the assessment year based on their estimated or actual reduced acquisitions, determined through one of the following methods:

• Previous year’s reduced acquisitions – the amount lodged or assessed in the energy acquisition statement for the previous assessment year. This is the method used in most cases.
• documentasset:Variation amount – existing liable entities that vary the required surrender amount.
• documentasset:Proposed amount – new liable entities or liable entities that did not lodge an energy acquisition statement the previous year.
• Current assessment year’s reduced acquisitions:
• Default assessment - Under section 38AH of the Act, this occurs when a new liable entity did not lodge an energy acquisition statement for the previous year or propose a new amount under section 38AG.
• Under section 38AF(7) of the Act – this occurs when a variation amount under section 38AF has been accepted, but the amount reported in the energy acquisition statement exceeds the variation amount by more than 10%.

Once the estimated or actual reduced acquisitions are determined, liable entities can then calculate their STC liability for quarters one to three by using the calculations outlined below.

Liable entities can view their required surrender amounts and surrender STCs via their REC Registry account.

Calculating STC liability for quarter 4

STC liability for quarter 4 is calculated using a different method to the first 3 quarters of the assessment year. Liable entities surrender STCs for quarter 4 with the lodgement of their annual energy acquisition statement on the REC Registry.

Liable entities calculate the liability based on their current assessment year’s reduced acquisitions, multiplied by the STP, then subtract any STCs surrendered in the first 3 quarters.

Renewable power percentage

The number of LGCs a liable entity is required to surrender each year is calculated by multiplying the number of reduced acquisitions by the renewable power percentage (RPP) set for that assessment year. The RPP is published on the agency website each year by the 31 March.

The Minister for Energy and Emissions Reduction (the Minister) determines the RPP for each assessment year. The agency recommends a percentage to the Minister, considering the following matters:

• renewable electricity required for the year (the annual target)
• estimated relevant acquisitions of electricity for the year
• the cumulative adjustment (the difference between previous annual targets and liabilities), and
• estimated exemption from emissions-intensive trade-exposed activities.

The Minister may also consider other matters in determining the RPP. If the RPP is not set by 31 March of the assessment year, a default percentage is applied.

Small-scale technology percentage

The number of STCs a liable entity is required to surrender each quarter is partly calculated using the small-scale technology percentage (STP). The STP is published on the agency’s website each year by the 31 March.

The Minister determines the STP for each assessment year. The agency recommends a percentage to the Minister, considering the following matters:

• estimated STC creations for the year
• estimated relevant acquisitions of electricity for the year
• the cumulative adjustment (the difference between previous STC creations and surrenders), and
• estimated exemption from EITE activities.

The Minister may also consider other matters in determining the STP. The STP must be set by 31 March of the assessment year, otherwise a default percentage is applied.

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