The Clean Energy Regulator has today published the 2018 certificate shortfall list and large scale generation certificate market update - February 2019 following final surrender by liable entities for the 2018 assessment year.
Across both the Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme, 93.3 per cent of certificates were surrendered on time by Renewable Energy Target liable entities (usually electricity retailers).
Surrender rates for small-scale technology certificates was 99.9 per cent. Surrender rates for large-scale generation certificates was 86.1 per cent, with a shortfall of 3.9 million large-scale generation certificates or 13.9 per cent of total liability.
In October 2018, the agency released an industry position on shortfall. This position stated that as the Renewable Energy Target will be exceeded, the agency has no objections to the use of shortfall in the expectation that clients will true up their position by surrendering sufficient LGCs in a subsequent year, as allowed for under the law.
The use of shortfall by liable entities has substantially shifted demand for large-scale generation certificates from the current year into future years, leaving a surplus of 7.1 million large-scale generation certificates after final surrender. As large-scale generation certificate spot prices fell from above $71.90 to $39, the impact of the Large-scale Renewable Energy Target on household electricity prices will also decrease. Find out more in the large scale generation certificate market update - February 2019.
The Renewable Energy Target is an Australian Government scheme designed to encourage the additional generation of electricity from sustainable and renewable sources and reduce emissions of greenhouse gases in the electricity sector.
The Renewable Energy Target works by allowing both large-scale power stations and the owners of small-scale systems to create certificates for every megawatt hour of power they generate. Certificates are then purchased by electricity retailers who sell the electricity to householders and businesses. These electricity retailers have legal obligations under the Renewable Energy Target to surrender certificates to the Clean Energy Regulator, in percentages set by regulation each year. This creates a market which provides financial incentives to both large-scale renewable energy power stations and the owners of small-scale renewable energy systems.
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