For liable entities that need to surrender certificates, use the methods on this page to calculate your surrender amount.
This will help you work out how many to surrender of:
- large-scale generation certificates (LGC)
- small-scale technology certificates (STC).
Calculating LGC liability
When you lodge your energy acquisition statement (EAS) it calculates your LGC liability.
You can also calculate your liability in advance by using the formula
(RA × RPP) – surplus + shortfall = LGC liability
where RA is your reduced acquisitions and RPP is the renewable power percentage.
The surplus is the amount carried forward from the previous year. This applies if you surrendered more LGCs than required in the previous year.
The shortfall is the amount carried forward from the previous year if it was under 10% of total liability.
Refer to the legislation for full definitions for this method.
Relevant legislation: section 36–38 of the Renewable Energy (Electricity) Act 2000.
A liable entity acquired 10,000 MWh of electricity in 2023. The RPP for that year was 18.96%.
They have a shortfall of 100 LGCs carried forward from the previous year.
Using the formula, their total liability is 1,996 LGCs. The calculation is (10,000 x 18.96%) + 100 = 1,996 LGCs
The entity may choose to surrender less than this total liability amount and take a shortfall. If the shortfall amount is under 10% of this total liability it can be carried forward into the next year without paying a shortfall charge. If it is over 10%, a shortfall charge of $65 per certificate not surrendered will apply.
Calculating STC liability
You must surrender STCs each quarter of the assessment year (calendar year).
You can carry forward a surplus from the previous quarter. This applies if you surrendered more STCs than required for that quarter.
You can’t carry forward an STC shortfall. If you're in shortfall, you must pay a non-refundable small-scale technology shortfall charge.
There are different methods for working out STC liability for Q1 to Q3 compared to Q4.
The methods for calculating the Q1 to Q3 STC liability, and Q4 required surrender amounts are below. Additional requirements may apply if the company is a new liable entity, or an existing liable entity has had a change in circumstances.
Formula Q1-3
(RA x STP) x QP = STC liability
where RA is your reduced acquisitions, STP is the small-scale technology percentage and QP is the quarterly percentage:
- 35% for Q1
- 25% for Q2 and 3.
A liable entity acquired 10,000 MWh of electricity in 2022. They report this amount as their reduced acquisitions in their 2022 EAS. The STP for 2023 was 16.29%.
Using the formula, they must surrender 570 STCs for Q1 of the 2023 assessment year. The calculation is:
(10,000 MWh × 16.29%) × 35% = 570 STCs.
Once you work out your required surrender amount for Q1, calculate your STC liability for Q2 to Q3 using the formula:
(10,000 MWh x 16.29%) x 25% = 407 STCs
Formula Q4
(RA x STP) - SA = STC liability
Where RA is reduced acquisitions as reported in your annual EAS, STP is the small-scale technology percentage and SA is the total required surrender amount (STC liability) for Q1–3.
Refer to the legislation for full details about these methods.
Relevant legislation: section 38AA–38AE of the Act.
In the liable entity's 2023 EAS they report acquiring 15,000 MWh of electricity in the year.
Based on the 2023 STP of 16.29% and the total surrender amounts for Q1 to Q3 of 1,384 STCs, they must surrender 1060 STCs for Q4 of the 2023 assessment year. The calculation is:
(15,000 MWh × 16.29%) – 1,384 = 1,060 STCs
Which reduced acquisitions to use
You should use the reduced acquisitions as reported in the previous year's EAS to calculate your liability for Q1 to Q3 if you are:
- an existing liable entity
- have been reporting for at least one year
- have lodged an EAS for the previous year.
If you've lodged an EAS for the previous year but your circumstances have changed, you can apply to vary the required surrender amount. This allows you to propose a new amount instead of using the previous years' reduced acquisitions to calculate the Q1–3 surrender amounts.
If you are a new liable entity that didn’t lodge an EAS for the previous year, you can apply to set the required surrender amount for each quarter.
For more details, go to certificate surrender.
Refer to the legislation for full details about these methods.
Relevant legislation: section 38AF–38AG of the Act.