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Shortfall and shortfall charges

10 November 2022
RET

Contents

Large-scale generation shortfall

Under the Large-scale Renewable Energy Target (LRET), liable entities are required to surrender several large-scale generation certificates (LGCs) in proportion to the electricity they acquire in a year.

Liable entities that surrender fewer LGCs than their ‘required surrender amount’ will be in shortfall. For LGC shortfall larger than 10% of the total LGC liability, a non-tax-deductible renewable energy shortfall charge of $65 certificate not surrendered is applied.

Shortfall charge invoices are issued in the REC Registry, following the LGC surrender deadline on 14 February each year. Shortfall charges must be paid on time. Unpaid shortfall charges attract interest charges and are managed in accordance with the Clean Energy Regulator’s (the agency’s) debt recovery policies and procedures.

The agency publishes the details of all entities in shortfall. A complete list of liable entities that have incurred LGC or STC shortfall in all assessment years is published on the certificate shortfall register.

Where a liable entity has paid a large-scale generation shortfall charge, it may be eligible to apply for a refund. Eligibility and further details are available on the refunds of large-scale generation shortfall charges page.

Carrying forward large-scale generation shortfall

A liable entity may carry forward a shortfall up to 10% of its required LGC surrender amount for a particular year. The carried forward shortfall is then added to the following year’s LGC liability.

The large-scale generation shortfall charge is not incurred in these circumstances. However, the amount of shortfall in certificates and percentage of liability is published, and the shortfall amount is added to its liability for the following year.

Carried forward shortfalls can accumulate over multiple assessment years, but once a liable entity has an LGC shortfall of 10% or more of their total LGC liability for an assessment year, the shortfall charge becomes payable.

Small-scale technology shortfall

Under the Small-scale Renewable Energy Scheme, liable entities are required to surrender small-scale technology certificates each quarter of the calendar year. Liable entities that do not fully acquit their STC liability for a quarter will have a small-scale technology shortfall.

The small-scale technology shortfall charge is $65 per STC not surrendered for each quarter of the year.

Small-scale technology shortfall cannot be carried forward to the next quarter or year, and no refund provisions are available for small-scale technology shortfall charges.

Default assessment of shortfall charges

The agency will complete a default assessment of shortfall charges if a liable entity does not complete an energy acquisition statement for the assessment year, or the liable entity does not surrender additional certificates following an amendment to their energy acquisition statement.

A default assessment of an energy acquisition statement may result in LGC and STC liability, and the liable entity will not have the option to surrender LGCs and STCs to acquit the liability. Shortfall charges will automatically be generated in the REC Registry. If this occurs, large-scale generation shortfall charges are not refundable under Part 8 of the Act.

Sections 48 and 48B of the Renewable Energy (Electricity) Act 2000 (the Act) outline default assessments of large-scale generation shortfall charges and small-scale technology shortfall charges.

When shortfall charges become payable

Shortfall charges for an assessment year become payable by a liable entity under the Renewable Energy (Electricity) Act 2000 when:

ScenarioWhen shortfall charges become payable
The liable entity lodges a renewable energy shortfall statement for the assessment year

Either:

  • On 14 February, or
  • On the day the statement is lodged (if the liable entity has been granted an extension of time by the agency to lodge the statement)
The agency makes a default assessment of a liable entity’s shortfall for an assessment yearOn the day the shortfall charges related to the original assessment became payable
The agency amends an energy acquisition statementOn the day the shortfall charges related to the original assessment became payable
The agency amends a notice of assessment

Either:

  • On the day the shortfall charges related to the original assessment became payable, or
  • On the day the amended assessment is made (if the amendment is wholly or partly as a result of an error of the agency).

Refunds for overpayment

If a liable entity’s reduced acquisitions decrease following an amendment to their energy acquisition statement, any shortfall charges that have been paid can be refunded.

Liable entities will be refunded any shortfall charge that has been paid and subsequently reduced by an amendment to an assessment. For example, to revise the liable entity’s reduced acquisitions for an assessment year.

The amount to be refunded will be paid to the liable entity or applied to any existing unpaid fees of the liable entity to the Commonwealth. Refunds for overpayment include the shortfall charge and any associated penalty or interest charges.

Section 50 of the Renewable Energy (Electricity) Act 2000 (the Act) outlines refunds for overpaid shortfall charge amounts.


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