​​Table 1 summarises the range of activities during the year for both large-scale generation certificates and small-scale technology certificates.

¹ Certificates validly created for previous generation years can be audited, registered and surrendered in 2014.

Transfer of certificates

From 2001 to 31 December 2014, an accumulated total of 76 736 successful certificate transfers had taken place in the REC Registry, representing a total of 709 248 514 certificates transferred.

Of this overall total, during 2014 there were:

• 13 752 accepted transfers, representing a volume of 156 226 998 certificates
• 289 transfers cancelled by sellers, representing a volume of 9 563 542 certificates, and
• 44 transfers rejected by buyers, representing a volume of 249 571 certificates.

Transfer trends

Graph 8 shows monthly trends in transfers over the past four years. The busiest transfer months are January and February, linked to the annual liability in the Large-scale Renewable Energy Target.

Graph 8: Number of certificate transfers by month in 2011, 2012, 2013 and 2014

Validation of certificates

The Clean Energy Regulator's certificate validation activities are an important component of maintaining the integrity of the Renewable Energy Target and the certificate market. Scheme participants creating small-scale technology certificates and large-scale generation certificates must provide thorough supporting documentation before the Clean Energy Regulator validates and registers certificates. As part of this process, accredited power stations must also confirm they are operating in accordance with all Commonwealth, state, territory and local government planning and approval requirements through a 'standing notice' to the Clean Energy Regulator.

As at 31 December 2014:

• A total of 37 657 827 certificates were created in the REC Registry in the 2014 calendar year. By comparison, 36 804 677 certificates were created in 2013 and 51 051 676 certificates were created in 2012.
• A total of 36 889 826 certificates were validated in the REC Registry in the 2014 calendar year. By comparison, 34 810 407 certificates were validated in 2013, and 49 288 322 certificates were validated in calendar year 2012.

A number of factors contributed to the decrease in certificate creations and validations between 2012 and 2014. The phasing out of the solar credits multiplier had an effect on the number of small-scale system installations, as did changes to state and territory government solar feed-in tariff schemes. Other factors included the change in price of solar photovoltaic due to foreign currency exchange rates and global production of solar photovoltaic systems. Overall, the number of certificates created in 2014 was similar to the number for 2013.

As shown in Graph 11 on page 41 and Graph 15 on page 46, a wide range of eligible renewable energy sources were used to create certificates in 2014. Not all accredited renewable energy power stations, agents or individuals created certificates in 2014.

Fixed price small-scale technology certificates (STC Clearing House)

The REC Registry includes the STC Clearing House. This facility allows liable entities to purchase small-scale technology certificates at a fixed price of $40 (GST exclusive) when the supply from the open market does not meet their demand. This provides certainty to liable entities by guaranteeing a supply of certificates to meet their liability and setting a maximum price, which allows them to protect their risk and pass through costs efficiently. Sellers can also use this facility and receive the fixed price. Large-scale generation certificates are not included in the STC Clearing House.

The STC Clearing House was expected to be used for a large number of trades that would set the market price. However, most small-scale technology certificates are traded outside the STC Clearing House in a thriving secondary market. The oversupply of small-scale technology certificates since 2011 has resulted in the secondary market trading lower than the fixed price. Approximately 137 million small-scale technology certificates have been created between 1 January 2011 and 1 January 2015, with only 145 519 traded in the STC Clearing House.

In 2014, there were three significant purchases in the STC Clearing House. The largest was for 5 019 small-scale technology certificates valued at $220 836 (including GST). Smaller but significant purchases included 990 small-scale technology certificates valued at $43 560 and 549 small-scale technology certificates valued at $24 156.

The total value of the 14 individual STC Clearing House transactions in 2014 was $309 452, representing a total of 7 033 small-scale technology certificates.

Graph 9: Small-scale technology certificates awaiting sale in the STC Clearing House

A clear trend throughout 2014 was the continuing decline in the number of small-scale technology certificates awaiting sale in the STC Clearing House, as shown in Graph 9. The Clean Energy Regulator attributes this decline to the market price for small-scale certificates, which trended toward the fixed price of $40 (GST exclusive). As the price increased, holders of certificates withdrew their holdings from the STC Clearing House for sale in the secondary market.

Graph 10: Small-scale technology certificate secondary market spot price (GST exclusive), 2011–2014

The price of small-scale technology certificates in the secondary market is shown in Graph 10. The Clean Energy Regulator sources wholesale market prices from NextGen.Net, Thomson Reuters and Mercari.

Estimated 2015 volume weighted average market price for large-scale generation certificates

Under regulation 22ZH of the Regulations, the Clean Energy Regulator was required to estimate and publish the volume weighted average market price for a large-scale generation certificate for 2015 by 31 October 2014.

The Clean Energy Regulator estimated the volume weighted average market price for a large-scale generation certificate for 2015 at $29.38 and published this, along with the methodology used to estimate the price, on its website on 22 October 2014.

The volume weighted average market price for a large-scale generation certificate for 2015 is factored into the calculation of the partial exemption assistance rate for the year. Details on partial exemptions are under Industry assistance .

Voluntary surrender of certificates

Individuals or companies that are registered owners of certificates can choose to surrender certificates to the Clean Energy Regulator for any reason. Reasons include supporting additional generation of electricity from renewable energy sources and meeting GreenPower obligations (a voluntary government accreditation program). Offers made for these reasons are considered 'voluntary surrender' offers. This is covered under section 28A of the Renewable Energy (Electricity) Act 2000.

Individuals or companies may also choose to offer certificates for voluntary surrender to offset the impacts of improper creation of certificates under the civil penalties and other remedies provisions of the legislation, or to meet enforceable undertaking obligations under section 154Q of the Act. If offers are made for these reasons they are considered to be 'non-compliance surrender' offers.

Certificates accepted for voluntary surrender are permanently removed from the market and cannot be transferred to another party or used to acquit a mandatory surrender liability under the Act.

The Clean Energy Regulator will refuse a voluntary surrender where it is determined that the offer has been made in error. One offer was refused in 2014.

As at 31 December 2014, a total of 1 580 213 certificates, representing 218 offers, had been accepted for voluntary surrender in the REC Registry.

Table 2 shows the number of certificates accepted for voluntary surrender.

LGC = large-scale generation certificate; STC = small-scale technology certificate

Note: 2007 is when the Act (and REC Registry) was amended to allow for voluntary surrender.

¹ On 28 June 2010, civil penalty and other remedies, including enforceable undertaking provisions, were introduced into the legislation.

Certificates are also surrendered to the Clean Energy Retailer to acquit liabilities under the Renewable Energy (Electricity) Act 2000. Details are in Liable Entities.