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Refunds of large-scale generation shortfall charges under the Renewable Energy Target

21 November 2019

If you are considering claiming a Large-scale Generation Shortfall Charge (LGSC) refund (in part or in full) during 2019, or early 2020 please read the information below and contact the Clean Energy Regulator to discuss the process for lodging a claim.

Overview

Under the Renewable Energy (Electricity) Act 2000 (the REE Act), liable entities that have paid a LGSC may be eligible to claim a refund on the LGSC (less an administration fee).

Claims lodged before 31 December 2019

A refund may be claimed during the 2019 calendar year if:

  • the refund claim is lodged during the allowable refund period (see below)
  • the liable entity did not have a large-scale generation shortfall for the 2018 assessment year, and
  • large-scale generation certificates (LGCs) are surrendered to cover all or part of the original LGSC.

Please Note: refunds are not available for Small-scale Technology Certificate shortfall charges.

The Clean Energy Regulator’s standard processing time for validating section 95 refund claims can be up to 6 weeks. Claims lodged after 15 December 2019 will not be processed until January 2020. Additional time may be required for more complex claims or where additional information is required.

Claims lodged from 1 January 2020

A refund may be claimed during the 2020 calendar year if the:

  • refund claim is lodged during the allowable refund period (see below)
  • liable entity did not have a large-scale generation shortfall for the 2019 assessment year, and
  • large-scale generation certificates (LGCs) are surrendered to cover all or part of the original LGSC.

Please Note: refunds are not available for Small-scale Technology Certificate shortfall charges.

It is important to note that refund claims lodged during January and February 2020 will not be validated or paid until after the validation of the 2019 EAS has occurred. Assuming no information is required during the validation process, and the eligibility criteria is satisfied refunds should be processed by 9 April 2020.

The allowable refund period

Refunds are only eligible during the ‘allowable refund period’. The allowable refund period:

  • starts the day after the liable entity lodges its large-scale generation shortfall statement (including a zero shortfall statement) for a year following the year for which the LGSC was incurred, and
  • ends three years after the liable entity paid the LGSC.

For example, if the liable entity paid its 2016 LGSC on 9 February 2017 the allowable refund period ends on 10 February 2020.

Vintage rules

Vintage rules do not apply when surrendering LGCs under section 95 of the Act which means if you are lodging a refund claim in January or February 2020 you are able to use certificates created in 2020. As you may be aware certificates created in 2020 cannot be used to acquit 2019 certificate liability therefore it may be beneficial to utilise these certificates for refund purposes.

Certificate tagging

If you intend on using specific certificates for surrender for a refund claim e.g certificates created in 2020, ensure the certificates are tagged and you use the filters available in the surrender screen to surrender the correct certificates.

For instructions on taging certificates refer to the REC Registry guideline under heading ‘Accepting certificate transfers’.

If you do not use the filters it will select certificates at random which may affect the availability of certificates for your 2019 certificate liability.

How to make a claim

Refund claims are made using the REC Registry. Before making a claim, ensure you are eligible and you have sufficient LGCs in your registered holdings account.

To lodge a claim:

  1. Log into the REC Registry
  2. Go to the assessment year for which you are making a refund claim
  3. Click on the ‘Claim LGSC Refund’ button
  4. Enter the required information, including the number of LGCs you are surrendering
  5. Finalise and lodge the claim.

If you are intending on paying shortfall charges please ensure you seek tax advice from a tax accountant on the treatment of claiming refunds.

Please email the Clean Energy Regulator at RETliability@cleanenergyregulator.gov.au prior to commencing the claim process.

Further information

See the refunds of large-scale generation shortfall charges page on our website or contact us for more information.


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