Office of the Renewable Energy Regulator Annual Report 2003
Office of the Renewable Energy Regulator, 2003
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About the document
The Office of the Renewable Energy Regulator (ORER) has been operating for nearly three years and the Renewable Energy Certificate (REC) internet based registry for a slightly shorter period since April 2001.
In a remarkably busy 2003 the renewable energy industry significantly increased generation activity, liable parties demonstrated even tighter compliance with over 99% of compliance by REC surrender and the review panel reported on the operation of the Act.
On the generation side the office has seen increased REC creation activity, more eligible generator participants and a renewable energy industry that is rising to the challenge of the legislated targets. The 2003 calendar year saw creation of valid RECs increase by over 90% relative to 2002, with more RECs being created in the month of December than had been created in both of the previous years of operation.
Yet despite the high level of activity this year the total of all the valid certificates created to date only represents under 5% of the total of about 138 million certificates needed over the twenty year life of the Mandatory Renewable Energy Target. Or to put it another way over 95% of RECs required to meet the current target period to 2020 have still to be produced.
While 2003 was the third year of operation of the Act, it was only the second year of surrender of RECs under the Act when certificates were offered for calendar year 2002 on 14 February 2003. During 2003 approximately 1.19 million RECs were accepted against 2002 liabilities and for redeeming outstanding liabilities remaining from 2001.
For 2002 a total shortfall of under 3000 RECs occurred which is about one quarter of one percent of the 2002 target of 1.1 million RECs, demonstrating the strong commitment from liable parties to surrender RECs rather than pay shortfall charges.
Liable parties are to be congratulated on this 2002 result—an improvement on the 2001 figure of over 25,000 RECs shortfall. Further in 2002 liable parties took advantage of the flexibility mechanism within the Act to redeem historic shortfalls and reduced the 2001 shortfall by additional surrenders to leave only slightly over 11,000 RECs in shortfall for 2001. More opportunities still exist to further reduce both the 2002 and 2001 shortfalls in 2004 and 2005. After 2005 the three year shortfall redeeming period will end for 2001. Early indications for 2003 compliance, nominally commenced on 14 February 2004, are that the outstanding REC shortfall for 2001 has again plummeted through use of the redeeming mechanism.
This strong behaviour towards REC surrender being displayed by the liable parties should increase the confidence of investors in eligible renewable energy projects, show that a vibrant market for RECs is here to stay and ensure the foundations of renewable energy industry development are secure.
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