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Increasing Australia's renewable electricity generation

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• Office of the Renewable Energy Regulator Annual Report 2005 (PDF - 354 KB)

About the document

Year five of the operation of the Renewable Energy (Electricity) Act 2000 (the Act) has been marked not only by frenetic activity by participants building new projects (wind capacity nearly doubled to 705 MW in 2005) but also a lot of behind the scenes activity within ORER developing new and more powerful software for the second five years of operation.

Over 14 million RECs were validly created by participants in MRET to the end of 2005, against a cumulative surrender target to the end of 2005 of 9.2 million. While this might at first sight imply a surplus of RECs, the measure still has a long way to go in its sequence of targets and by 2020 about ten times that number of RECs will need to be created to stay on track. Or to put it another way, we are only about 7% of the way to the 2020 cumulative target and about 93% of the required RECs have yet to be surrendered.

In terms of performance against the liability requirements of the Act, 99.8% of compliance was by REC surrender in 2004. For 2004 a total shortfall of about 2,827 RECs was recorded from 6 liable parties. This high level of REC surrender rather than payment of penalty charges is of course beneficial to the renewable energy industry market as it maximises demand for RECs and provides the greatest incentive to develop renewable energy projects.

Further liable parties continued to take advantage of the redeeming mechanism within the Act to redeem historic shortfalls by surrendering additional RECs to reduce the shortfalls for 2001, 2002 and 2003 to 373, 40 and 1638 RECs respectively. Opportunities still exist to further reduce the 2002, 2003 and 2004 REC shortfalls in 2006. After 2006 the three year redeeming period will end for 2002 compliance year REC shortfalls.